Specific environmental charges to boost Cold Ironing use in the European Short Sea Shipping

Abstract

Through Directive 2014/94/EU, European Union (EU) has required European ports to provide facilities to enable Cold Ironing (CI) use by 2025. This new reality advances a stricter normative in terms of port emissions. This paper introduces a calculation method to estimate a specific environmental charge in ports to incentivize CI use in Short Sea Shipping. The impact of this charge on the economic performance of the vessel's operators is assessed through Internal Rate of Return of the CI retrofitting investment in vessels. The calculation method assumes a pollutant differentiation system by considering kinds of vessel, technical features, port localization and hinterlands populations. Results show that, only when the generation of on-shore electricity is dominated by sustainable sources, the environmental charge is effective to stimulate the CI retrofitting of vessels in adverse scenarios. Sensitivity analyses determine that low gross tonnages’ vessels with longer berthing times take greater advantage from CI use.