- After treatment, Benefit, Cost
This analysis shows as a first calculation of the costs and benefits of the application some figures about the economic feasibility of the application of after-treatment. As already concluded in Deliverable 1.2, with the application of SCR and DPF it is possible to achieve a major reduction of air pollutant emissions. However, this reduction comes with a price, as there are no benefits covering the entire costs of the application.
Annual costs SCR and SCR+DPF: Highly dependent on vessel type and engine type
In this analysis the annual costs were calculated for 22 different vessel types, these absolute costs are influenced by a number of factors, such as the fuel consumption, the number and size of the engines (in installed power), the power used in normal conditions and the engine hours. This results in annual costs of applying SCR of maximum around 30,000 euro for the regular motor cargo vessels with CCNR Stage-I engines, which mostly depends on the size of the vessel (e.g. for a 38.5 metre motor vessel, the annual costs amount € 4,521). At the other side, for the coupled convoys and especially the larger pushed convoys, these costs can range from around € 47,000 to around € 117,000. For vessels with CCNR Stage-II approved engines, the annual costs of applying SCR can be 5-22% lower than with CCNR Stage-I or non-type approved engines.
For the application of SCR and DPF, the annual costs can be 45% to 91% higher for high-speed engines than the annual costs for the application of only SCR. Due to the higher investment costs for the filter, this is even higher for the medium-speed engines (between 64% and 129%). The annual costs can go up to € 219,000 for a pusher with 6 barges and medium-speed CCNR Stage-I engines, which is according to the report of D1.1 the most common engine used in this fleet family.
Relative cost increase of applying SCR and SCR+DPF compared to base line costs
There are major differences between vessel types and engine types in absolute annual costs for the application. To show the business case in relation with the general costs a ship-owning company has in operating a vessel, the relative cost increase of the application of SCR and SCR+DPF has also been calculated. For application of SCR this cost increase is on average around 2.4% (for CCNR Stage-II engines) and 2.8% (for CCNR Stage-I engines).
For SCR+DPF this is on average around 3.9% (for CCNR Stage-II, high speed) to 4.9% (for CCNR Stage-I, medium speed). For some vessel types, like passenger vessels, this is even much lower (1.3% for applying SCR+DPF on a CCNR Stage-I high speed engine, the most common engine). The cost increase for the larger motor tank vessels is also relatively low, especially taking into account that many of these vessels have CCNR Stage-II engines. At the other side, for the Danube push boats with four barges, this can be around 6.3% for SCR-DPF on the most common engine (CCNR Stage-I high speed engine). In lesser extent, this counts also for the coupled convoys, the other push boats with high installed power, but also for some smaller vessel types (e.g. motor vessel 38.5m).
The same conclusions can be seen in the outcomes for the representative journeys. Because of the high relative costs for the Danube push boats, this is also relatively high for the Danube journeys. On the Rhine journeys most of the ship-owning companies can benefit from the discount on the port dues, which covers in the most positive situation (journey 13, motor vessel 110 m with containers, between Rotterdam and Duisburg) for 15% (SCR+DPF) and 24% (SCR-only) of the extra annual costs, resulting in a net annual cost increase of 2% (SCR+DPF) and 3.5% (SCR-only). For journey 9 (motor tank vessel, 135m, between Amsterdam and Rotterdam with oil) this cost increase is the lowest with respectively 1.7% and 3.1%.
Relative costs SCR and SCR+DPF per tonne cargo transported
Journey 9 of the Rhine journeys has also the most positive business case, if expressed as costs per tonne cargo transported, € 0.03 and € 0.05 for respectively SCR-only and SCR+DPF. Although the annual costs for applying it on a push boat, the costs per tonne cargo transported is also relatively low for journey 1 of the Rhine journeys (push boat Rotterdam-Duisburg). Due to the high payload carried, this is respectively € 0.07 and € 0.13. Although the discount on the port dues reduces the net annual costs of applying SCR and SCR+DPF for the Rhine journeys, there is not a big difference between the average costs per tonne cargo transported for the Rhine and Danube journeys. For the Danube journeys these costs are between € 0.07 and € 0.29 for SCR and between € 0.11 and € 0.44 for SCR+DPF. For the journeys on the other waterways these costs are higher (between € 0.23 and € 0.32 for SCR and between € 0.35 and € 0.48 for SCR+DPF), because of the low average payload.
Relative costs SCR and SCR+DPF compared to environmental benefits
As SCR and DPF is effective in reducing NOx and PM emissions, making it possible to achieve emission levels proposed for new emission standards (EU NRMM Stage-V). For that reason, the choice have been made to express the annual costs of applying SCR and – in combination with – DPF as costs per kg NOx and PM reduction. This shows that although the annual costs of applying SCR on a CCNR Stage-I engine is higher than on a CCNR Stage-II engine, the costs per kg NOx-reduction are lower. For the CCNR Stage-I engines these costs range from € 1.12 (a Danube push boat with 4 barges) to € 5.04 (MVS 38.5m) and respectively € 1.68 to € 9.23 for the same vessel types with CCNR Stage-II engines. These costs are lower for some of the Rhine/ARA journeys, because of the discount on the port dues, ranging from € 0.99 to € 1.87 for SCR-only. For the Danube journeys these costs are between € 1.16 and € 1.41 per kg NOx reduction, for the journeys on the other waterways between € 1.44 and € 1.90 and relatively high for the passenger journeys (€ 2,97 and € 3.82).
For the additional costs for applying a DPF on an SCR system, the costs are calculated per kg PM emissions. This ranges from € 33.36 (Danube push boat with 8/9 barges) to € 122.50 (MVS 38.5m) for high-speed engines and € 43.72 to € 177.43 for the same vessel types with medium-speed engines. The costs compared to the emission reduction are relatively high for the smaller motor cargo vessels (38.5m and 50m) and the push boats with 500-2,000kW installed power. The most positive case compared to the emission reduction is for the Danube push boats, the medium large motor cargo vessels (105m and 110m) and motor tank vessels (86m and 110m) and the passenger vessels.
Recommendation: Comparing costs per units of emission reduction with external cost reduction
Before drawing conclusions on the application of only SCR or also DPF based on the costs per kilogram NOx and PM emission, it is important to notice that one kilogram of NOx and one kilogram of PM are not equal in external costs. To get a good insight into the effects of SCR and SCR+DPF, the costs of SCR/SCR+DPF per kg NOx or PM reduction could be compared with the external costs of a kg NOx or PM. There are several methodologies for calculating the external costs of transport, for example Handbook on estimation of external costs in the transport sector (CE Delft et al., 2008) and its update for 2008 (CE Delft et al., 2011). Taking 2008 as base year the external costs per tonnes are given in Table 37 for the countries of the representative journeys.
This shows that it is possible in many cases to achieve higher environmental benefits – measured in the reduction of external costs – than the costs for the application of SCR. Depending on the regular operating area mainly of the vessel (more densely populated regions or non-urban regions), this is also possible in some cases for the application DPF. Thus implying that the measure could be feasible from a societal perspective.
Recommendation: Validation of these calculations needed during the pilots
As this analysis shows a first calculation for the costs, benefit and effects of applying after-treatment on inland waterway vessel, the data should be validated during the activities in the PROMINENT project. The pilots will provide a valuable insight into not only the technical, but also the economic feasibility of applying after-treatment. In the pilots also the operational profile of the different vessel types and during the different journeys will be validated. The pilots and the validation among suppliers, end-users and other experts will be the basis of updating these data for the ex-post cost benefit analysis, which will be performed in WP6.
Possible fuel reduction by fuel optimisation of CCNR Stage-II engines
One potential benefit is not taken into consideration in this analysis, which is the possibility to improve the fuel consumption and PM emissions of a CCNR Stage-II and EU NRMM Stage III-a approved engines by allowing higher engine out NOx emissions. This is referred to as NOx-BSFC and NOx-PM trade-offs. The urea consumption for the CCNR II engine will usually increase up to the level of a CCNR I engine. But the fuel consumption reduction can be more or less equal to the urea consumption. This could mean a substantial annual benefit. However, this cannot be done without obstacles, as the engine setting then needs to be changed and the original type approval is not valid any more.
Focus on the stimulation of environmental benefits in the policy recommendations
As this ex-ante cost effectiveness analysis shows that there is currently not yet a positive business case for the application of after-treatment, and that for assessing the effectiveness in reducing NOx and PM emissions, it is important to also take the external cost reduction into account. It will be an interesting focal point for the policy recommendations, if there is a possibility to monetise this environmental benefit of the application of SCR and SCR+DPF. One of the options is a discount on the port dues, which is already provided in some of the ports and included in this analysis under the representative journeys in the Rhine/ARA region.
The full analysis can be found under downloads