The importance of economies of scale for reductions in greenhouse gas emissions from shipping

CO2 emissions from maritime transport represent 3.3% of the worldʹs total CO2 emissions and are forecast to increase by 150%–250% by 2050, due to increased freight volumes (Second IMO GHG study, 2009). Fulfilling anticipated climate requirements (IPCC, 2007) could require the sector to reduce emissions per freight unit by a factor of five or six. The International Maritime Organization (IMO) is currently debating technical, operational and market-based measures for reducing greenhouse gas emissions from shipping. This paper also investigates the effects of economies of scale on the direct emissions and costs of maritime transport. We compared emissions from the current fleet (2007), with what can be achieved by increasing average vessel size. The comparison is based on the 2007 levels of trade and predictions for 2050. The results show that emissions can be reduced by up to 30% at a negative abatement cost per ton of CO2 by replacing the existing fleet with larger vessels. Replacing the whole fleet might take as long as 25 years, so the reduction in emissions will be achieved gradually as the current fleet is renewed.