Results

The economic impact of the Mediterranean Sulfur Emission Control Area

Journal: Marine Policy

Abstract:

The sulfur content of marine fuel is limited by regulation when ships sail inside designated Sulfur Emission Control Areas (SECAs). This policy has clear environmental and health benefits, but it also increases the cost of maritime transport and can potentially affect trade. We develop a specific modelling framework to measure the impact of the future Mediterranean SECA in 2025, considering its effects at the trade level and country level. Our framework leads to the estimation of 30 augmented gravity models for 445,506 bilateral maritime flows and for 15 different products. Our estimates show a potential reduction in the value of trade estimated at −1.0 % with a reduction of −1.1 % for imports and −0.8 % for exports. The sectors the most affected in percentage terms are foodstuffs, animal products and vegetable products. Our estimations also show that the countries that will be the most affected could be Syria (-1.5 %), Lebanon (-1.4 %) and Spain (-1.0 %).