The IMO has agreed to start working on the development of a ban on the use and carriage of heavy fuel oil (HFO) as fuel by ships in Arctic waters. Such a ban would not prohibit the carriage of heavy grade oil in bulk as cargo, but would require ships sailing in the Arctic waters to use and carry non-HFO bunker fuels only. This would lead to a reduction of black carbon emissions and reduce costs and damages in case of an oil spill, but also impose additional costs on ship owners/operators that otherwise would have used and/or carried HFO bunkers or blends thereof for on-board combustion purposes.
Concerns have been raised regarding the potential impact of the ban on maritime trade, in particular on Arctic communities and economies. In this context, the objective of the study is to assess costs and benefits of a ban on the use and carriage of HFO as fuel by ships in Arctic waters. The study does however not constitute a comprehensive cost-benefit analysis.
More specifically, the study assesses (1) the ban-related additional costs for ship owners/operators on the IMO Arctic fleet level and (2) at individual ship level, differentiated by ship type, (3) the potential impact on consumer prices by means of two case studies, and (4) assesses the clean-up costs that could be saved in case of an oil spill.
The main findings of the study are as follows: