Research on the low-carbon transition of the shipping industry

Abstract

Following the ratification of the Paris Agreement, the reduction of carbon emissions has evolved into a global consensus across nations and major industrial sectors. As a cornerstone of international trade, the global shipping industry accounts for approximately 3% of total greenhouse gas emissions. In 2018, the International Maritime Organization (IMO) established definitive strategic decarbonization targets, marking the commencement of the industry's low-carbon transition. However, this transformation faces multifaceted challenges, including economic costs, technological uncertainties, and operational complexities. Leveraging micro-level datasets specific to dry bulk carriers, this dissertation conducts empirical examinations of three critical dimensions within the maritime decarbonization process: vessel pricing mechanisms, route selection behaviors, and new energy vessel procurement strategies. First, the study investigates the impact of carbon emissions on the transaction prices of dry bulk carriers in secondary markets. The empirical results demonstrate a statistically significant negative correlation between vessel-specific carbon emissions and transaction prices after rigorously controlling for vessel characteristics (e.g., age, deadweight tonnage, engine specifications). Time-series analyses further reveal that fluctuations in carbon allowance prices under the EU Emissions Trading System (EU ETS) and the implementation of post-2018 decarbonization policies systematically explain the observed discount rates for high-carbon emission vessels. These findings substantiate that implicit carbon costs and policy transition risks constitute critical determinants in the asset pricing of carbon-intensive maritime assets. Second, the study examines how international sanctions influence route selection patterns for vessels with elevated carbon emissions and advanced operational ages. The results indicate that vessels characterized by higher emission levels and older vintages exhibit disproportionately higher probabilities of operating and docking in sanctioned jurisdictions following the imposition of sanctions. Utilizing the exogenous shock of the Russia-Ukraine conflict, we observe a marked increase in docking frequencies of high-carbon emission and aging vessels within the Russia-Belarus-Ukraine region post-conflict, highlighting the unintended consequences of geopolitical disruptions on environmental governance. Third, the dissertation evaluates determinants influencing shipping companies' adoption of alternative energy propulsion systems in newbuilding orders. The analysis identifies that firms with larger fleet sizes and those publicly listed on stock exchanges exhibit significantly higher adoption rates of new energy systems. In contrast, shipping enterprises based in China and Japan demonstrate comparatively lower adoption propensities. Furthermore, companies exhibit strategic prioritization by concentrating energy transition efforts within their core operational vessel categories, reflecting risk-averse preferences when undertaking uncertain technological shifts. This research contributes to multiple academic domains including carbon risk pricing, corporate strategic response to climate policies, maritime economics, and sanction mechanisms. The findings provide empirical foundations for formulating effective decarbonization policies and offer operational insights for green transformation practices in the shipping industry. The findings of this research yield multifaceted contributions: 1) Enriches the academic literature on carbon risk pricing in physical assets, corporate decarbonization strategies under institutional pressures, and the maritime economics of sanction-induced market distortions. 2) Provides empirical evidence to optimize decarbonization policy frameworks, including carbon pricing mechanisms, vessel scrappage incentives, and green technology subsidies. 3) Offers actionable guidance for maritime stakeholders in aligning fleet management practices with evolving regulatory landscapes and market preferences. By bridging critical gaps between carbon risk theory and maritime operational realities, this study establishes a robust foundation for advancing the shipping industry's transition toward sustainable and resilient low-carbon ecosystems.