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Feasibility of the Northern Sea Route for oil shipping from the economic and environmental perspective and its influence on China’s oil imports

Feasibility of the Northern Sea Route for oil shipping from the economic and environmental perspective and its influence on China’s oil imports
Feasibility of the Northern Sea Route for oil shipping from the economic and environmental perspective and its influence on China’s oil imports
The Northern Sea Route (NSR) has the potential to become a key oil shipping route due to its shorter distance and abundant oil resources in the Arctic. This paper puts forward a model to calculate the Required Freight Rate of the NSR and China’s other oil import shipping routes, which includes both the shipping cost and the environmental cost. The calculation is undertaken in the context of IMO Sulfur 2020 limit, and the Very Low Sulfur Fuel oil (VLSFO) is chosen as marine oil. The vessel speed in this study varies with ice thickness in different route segments; the environmental cost in the model has considered emissions from all main air pollutants in addition to CO2. The results show that the NSR has the potential to carry some of China’s oil import volume; internalizing the environmental cost has improved the competitiveness of NSR; ice breaking fee and VLSFO price have a significant influence on the attractiveness of NSR, but the price (tax) of CO2 has no obvious impact.
Environmental cost, Global warming potential, Northern sea route, Oil shipping, Required freight rate
0308-597X
Wang, Dan
4d9ffd7e-39b3-4a27-9d71-fd8a2fff5338
Ding, Renke
a51794ee-a880-433d-af21-df5c2db0e2f3
Gong, Yu
86c8d37a-744d-46ab-8b43-18447ccaf39c
Wang, Rui
5671b2a0-cc17-4f2a-9016-8a1a27e271ea
Wang, Jie
a587eaa9-08ef-4b53-886f-bfa7b0a555f1
Huang, Xiaoling
547e6d83-d7a7-4c2f-b245-75449f621adb
Wang, Dan
4d9ffd7e-39b3-4a27-9d71-fd8a2fff5338
Ding, Renke
a51794ee-a880-433d-af21-df5c2db0e2f3
Gong, Yu
86c8d37a-744d-46ab-8b43-18447ccaf39c
Wang, Rui
5671b2a0-cc17-4f2a-9016-8a1a27e271ea
Wang, Jie
a587eaa9-08ef-4b53-886f-bfa7b0a555f1
Huang, Xiaoling
547e6d83-d7a7-4c2f-b245-75449f621adb

Wang, Dan, Ding, Renke, Gong, Yu, Wang, Rui, Wang, Jie and Huang, Xiaoling (2020) Feasibility of the Northern Sea Route for oil shipping from the economic and environmental perspective and its influence on China’s oil imports. Marine Policy, 118, [104006]. (doi:10.1016/j.marpol.2020.104006).

Record type: Article

Abstract

The Northern Sea Route (NSR) has the potential to become a key oil shipping route due to its shorter distance and abundant oil resources in the Arctic. This paper puts forward a model to calculate the Required Freight Rate of the NSR and China’s other oil import shipping routes, which includes both the shipping cost and the environmental cost. The calculation is undertaken in the context of IMO Sulfur 2020 limit, and the Very Low Sulfur Fuel oil (VLSFO) is chosen as marine oil. The vessel speed in this study varies with ice thickness in different route segments; the environmental cost in the model has considered emissions from all main air pollutants in addition to CO2. The results show that the NSR has the potential to carry some of China’s oil import volume; internalizing the environmental cost has improved the competitiveness of NSR; ice breaking fee and VLSFO price have a significant influence on the attractiveness of NSR, but the price (tax) of CO2 has no obvious impact.

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More information

Accepted/In Press date: 27 April 2020
e-pub ahead of print date: 3 May 2020
Keywords: Environmental cost, Global warming potential, Northern sea route, Oil shipping, Required freight rate

Identifiers

Local EPrints ID: 440802
URI: http://eprints.soton.ac.uk/id/eprint/440802
ISSN: 0308-597X
PURE UUID: bb1cd807-68d2-4414-96bd-7e3896064d06
ORCID for Yu Gong: ORCID iD orcid.org/0000-0002-5411-376X

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Date deposited: 19 May 2020 16:30
Last modified: 18 Jun 2022 01:47

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Contributors

Author: Dan Wang
Author: Renke Ding
Author: Yu Gong ORCID iD
Author: Rui Wang
Author: Jie Wang
Author: Xiaoling Huang

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