Decarbonising Ro-Ro Shipping in Europe’s Motorways of the Sea: A Total Cost of Ownership Analysis of Alternative Marine Fuels

Abstract

The maritime industry, which accounts for around 90% of trade by volume, is fundamental to international trade. However, because of its role in global greenhouse gas (GHG) emissions it is coming under growing pressure to decarbonize. Stakeholders are exploring alternative fuel options as a means of achieving sustainability in response to global agreements and changing regulatory frameworks including the IMO targets, EU Emissions Trading System (EU ETS), and the upcoming EU Fuel Maritime project. This study uses a Total Cost of Ownership (TCO) analysis applied to the Roll-on/Roll-off (Ro- Ro) shipping market in Europe to examine the economic feasibility of several alternative fuels, including hydrogen, methanol, ammonia, biodiesel, and LNG for Shipowners to identify the optimal fuel option. Fuel expenses, environmental compliance costs, capital & financial expenditure (CAPEX), operational expenditure (OPEX), and the effect of carbon certificate pricing schemes are all included in the analysis. As per the analysis, Biodiesel emerged as the most optimal solution due to its costeffectiveness, compatibility with existing infrastructure and environmental performance. LNG is pursued as the second best alternative but is not compatible with the environmental goals in the long run. Thus, strong policy support and regulatory incentives are crucial to improve the competitiveness of low-emission fuels like methanol, ammonia, and hydrogen in the long run. By providing a comparative cost-based framework for assessing decarbonization pathways in short-sea shipping (SSS) in Europe, this thesis adds to the expanding body of research. It highlights the importance of TCO analysis in directing investment choices in the face of fluctuating fuel prices, unclear regulations, and rapid technological advancements.