A COMPUTATIONAL DECISION-MAKING TOOL BASED ON LIFE CYCLE COST ANALYSIS FOR REDUCED AIR EMISSIONS FROM SHIPS

A computational tool is presented that performs a comparison among the alternative technologies that are available for vessels, when operating inside Emission Control Areas (ECA), to comply with the limits of emissions of Sulphur Oxides that are set by the International Maritime Organization. These alternatives include the currently available Exhaust Gas Treatment Systems (EGCS) and the "do nothing" solution that involves the operation of vessels with Low Sulphur Fuel Oil. The required input data are selected based on a literature survey. The tool employs the Stanford Life Cycle Cost Analysis (LCCA) and all calculations are performed in EXCEL environment; the equations employed and the relevant required data and information are obtained mainly from the Stanford LCCA and the US Department of Transportation. Alternatives are compared on the basis of the calculated Life Cycle Cost, Internal Rate of Return and Payback Time. Initially, a Base Case vessel was selected with certain simplified characteristics for which the tool was applied. Then, calculations were repeated for various types of ECGS, various values of distances covered in ECA and various values of Fuel Price Differential to derive the following conclusions: (1) From the available EGCS only the wet open loop system is economically more effective than the "do nothing" solution involving the operation of the vessel with Low Sulphur Fuel Oil; for this EGCS the Life Cycle Cost is equal to 7.7 million USD, the Internal Rate of Return is equal to 12 % and the Payback Time is equal to 9 years. (2) The open loop system is economically more effective than the "do nothing" solution, only when the distances covered by the vessel in ECA are greater than approximately 9500 NM. (3) The open loop system is economically more effective than the "do nothing" solution, only when the Fuel Price Differential is greater than approximately 238 USD. These conclusions are valid for the Base Case vessel. For other types of vessels, it is recommended to use directly the calculation tool. The accuracy of the calculations with the proposed tool can be increased, when the quality of the input data, especially these referring to the capital and operational cost of the EGCS, is improved; this can be achieved via a more detailed analysis of the available EGCS cost data, that is suggested to be performed in the near future.