Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios
The accelerated melting of Arctic sea ice has established the Northern Sea Route (NSR) as an emerging alternative for international shipping. However, increased maritime activities pose significant environmental risks to this sensitive region. This study evaluates the economic implications of the In...
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Frontiers Media S.A.
2025-05-01
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| Series: | Frontiers in Marine Science |
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| Online Access: | https://www.frontiersin.org/articles/10.3389/fmars.2025.1575551/full |
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| author | Hongzhi Miao Xinyuan Feng Xinwei Li |
| author_facet | Hongzhi Miao Xinyuan Feng Xinwei Li |
| author_sort | Hongzhi Miao |
| collection | DOAJ |
| description | The accelerated melting of Arctic sea ice has established the Northern Sea Route (NSR) as an emerging alternative for international shipping. However, increased maritime activities pose significant environmental risks to this sensitive region. This study evaluates the economic implications of the International Maritime Organization (IMO) environmental regulations on Arctic shipping through a well-to-wake assessment framework. Using a multi-scenario economic analysis model, we compare transportation costs between the NSR and the traditional Suez Canal Route (SCR) under various IMO environmental policy scenarios. Our findings reveal: (1) Without carbon taxation, the NSR generally offers lower unit transportation costs than the SCR. However, the IMO’s prohibition of heavy fuel oil (HFO) in Arctic waters creates a 12-15% cost advantage for vessels using HFO on the SCR compared to those using clean fuels on the NSR. (2) However, the IMO’s prohibition of heavy fuel oil (HFO) in Arctic waters creates a 12-15% cost advantage for vessels using HFO on the SCR compared to those using clean fuels on the NSR. (3) In unilateral carbon tax scenarios, the NSR consistently remains less economically viable than the SCR using HFO, primarily due to mandatory clean fuel requirements in Arctic waters. (4) The environmental benefits of LNG propulsion demonstrate considerable technological sensitivity, with life-cycle emission reduction efficiency heavily dependent on engine selection and methane slip mitigation. Our analysis indicates that current Arctic environmental regulations lack policy coordination. To simultaneously achieve ecological protection and economic viability, we recommend implementing a dynamic carbon tax threshold mechanism linked to clean fuel technology standards. |
| format | Article |
| id | doaj-art-addf20bb76e64275a0bf79c0a4cba210 |
| institution | Kabale University |
| issn | 2296-7745 |
| language | English |
| publishDate | 2025-05-01 |
| publisher | Frontiers Media S.A. |
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| series | Frontiers in Marine Science |
| spelling | doaj-art-addf20bb76e64275a0bf79c0a4cba2102025-08-20T03:53:51ZengFrontiers Media S.A.Frontiers in Marine Science2296-77452025-05-011210.3389/fmars.2025.15755511575551Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenariosHongzhi Miao0Xinyuan Feng1Xinwei Li2College of Transportation Engineering, Dalian Maritime University, Dalian, ChinaCollege of Transportation Engineering, Dalian Maritime University, Dalian, ChinaSchool of Law, Dalian Maritime University, Dalian, ChinaThe accelerated melting of Arctic sea ice has established the Northern Sea Route (NSR) as an emerging alternative for international shipping. However, increased maritime activities pose significant environmental risks to this sensitive region. This study evaluates the economic implications of the International Maritime Organization (IMO) environmental regulations on Arctic shipping through a well-to-wake assessment framework. Using a multi-scenario economic analysis model, we compare transportation costs between the NSR and the traditional Suez Canal Route (SCR) under various IMO environmental policy scenarios. Our findings reveal: (1) Without carbon taxation, the NSR generally offers lower unit transportation costs than the SCR. However, the IMO’s prohibition of heavy fuel oil (HFO) in Arctic waters creates a 12-15% cost advantage for vessels using HFO on the SCR compared to those using clean fuels on the NSR. (2) However, the IMO’s prohibition of heavy fuel oil (HFO) in Arctic waters creates a 12-15% cost advantage for vessels using HFO on the SCR compared to those using clean fuels on the NSR. (3) In unilateral carbon tax scenarios, the NSR consistently remains less economically viable than the SCR using HFO, primarily due to mandatory clean fuel requirements in Arctic waters. (4) The environmental benefits of LNG propulsion demonstrate considerable technological sensitivity, with life-cycle emission reduction efficiency heavily dependent on engine selection and methane slip mitigation. Our analysis indicates that current Arctic environmental regulations lack policy coordination. To simultaneously achieve ecological protection and economic viability, we recommend implementing a dynamic carbon tax threshold mechanism linked to clean fuel technology standards.https://www.frontiersin.org/articles/10.3389/fmars.2025.1575551/fullNorthern Sea RouteIMO environmental regulationseconomic viabilitycarbon taxwell-to-wake |
| spellingShingle | Hongzhi Miao Xinyuan Feng Xinwei Li Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios Frontiers in Marine Science Northern Sea Route IMO environmental regulations economic viability carbon tax well-to-wake |
| title | Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios |
| title_full | Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios |
| title_fullStr | Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios |
| title_full_unstemmed | Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios |
| title_short | Economic viability of arctic shipping under IMO environmental regulations: a well-to-wake assessment of different carbon tax scenarios |
| title_sort | economic viability of arctic shipping under imo environmental regulations a well to wake assessment of different carbon tax scenarios |
| topic | Northern Sea Route IMO environmental regulations economic viability carbon tax well-to-wake |
| url | https://www.frontiersin.org/articles/10.3389/fmars.2025.1575551/full |
| work_keys_str_mv | AT hongzhimiao economicviabilityofarcticshippingunderimoenvironmentalregulationsawelltowakeassessmentofdifferentcarbontaxscenarios AT xinyuanfeng economicviabilityofarcticshippingunderimoenvironmentalregulationsawelltowakeassessmentofdifferentcarbontaxscenarios AT xinweili economicviabilityofarcticshippingunderimoenvironmentalregulationsawelltowakeassessmentofdifferentcarbontaxscenarios |