Suggested Citation:
Mishra, Gouri Shankar and Sonia Yeh (2011) Inclusion of Marine Bunker Fuels in a National LCFS Scheme. Institute of Transportation Studies, University of California, Davis, Research Report UCD-ITS-RR-11-16

The report examines the feasibility of regulating the carbon content of bunker fuels used for shipping by including the industry in a national LCFS framework. As generally expected, the industry's structure lends itself to  leakage in face of any regulation that is not global in nature.  Bunker suppliers can provide bunkering services in international waters to avoid regional or national regulatory constraints; while ship operators, especially those involved in international trade, have considerable flexibility in deciding bunkering location and supplier.

However, if LCFS is applied to the shipping industry and assuming no leakage, which is highly unlikely, we estimate the total abatement costs will be US$ 0.7−4 billion to reduce the well-toâ€wheel (WTW) CO2e intensity of bunkers sold in the US by 10%. This is roughly US$33-330/tonne CO2e for 19 million tonne CO2e reduction.