GREEN INVESTMENT OPTIONS IN FERRY, RO-RO AND RO-PAX INDUSTRY - From theory to practice

An increased focus on sustainability issues and climate change from customers as well as the whole society, jointly with more restrictive regulatory requirements, are triggering shipping lines to progressively adopt green strategies, aiming at reducing emissions and pursuing higher (energy) efficiency standards (Pallis and Vaggelas, 2019). In the shipping sector, the Ferry segment expresses global fleet of about 15,400 ships with a total gross tonnage (GT) exceeding 31 million, and globally transports about 4.27 billion passengers per year and 373 million vehicles; furthermore, it has a contribution on world GDP of 60 billion dollars and allows the employment of more than 1 million people (Interferry, 2019). Because of the importance of the traffic volumes handled both in terms of passengers and cargoes, as well as due to the related impacts originating from business operations, the Ferry, Ro-Ro and Ro-Pax industry is challenged to implement green strategies (Chang and Danao, 2007). Corporate Social Responsibility (CSR) paradigms and related theoretical constructs are expected to reshape future goals, strategies and implantation trajectories of major Ferry, Ro-Ro and Ro-Pax companies and improve firm performance (Lun et al., 2015). This PhD thesis scrutinizes green strategies and related investment options which are expected to allow Ferry, Ro-Ro and Ro-Pax group owners, operating European-flagged vessels, to reach sustainability goals without negatively affecting their economic/financial performance. The document proposes a conceptual framework that addresses the most promising green investment options which Ferry, Ro-Ro and Ro-Pax companies can exploit for making the business more sustainable, reducing environmental impacts and improving energy and material efficiency during day-by-day operations. Using insights from a systematic literature review conducted in the first sections of this PhD thesis, the most relevant green solutions widely investigated at academic level are examined and discussed for the purpose of this PhD thesis. After an exhaustive description of the state of the art and the state of the play regarding green investment options in Ferry, Ro-Ro and Ro-Pax industry, this PhD thesis proposes an analysis of the most effective green strategies and practices concretely developed and planned in the industry. Empirical evidence shows that the most promising investment options relate to ship propulsion systems, such as the adoption of hydrogen and fuel cells (Trillos et al., 2021), alternative fuels (Very Low Sulphur Fuel Oil, Ultra Low Sulphur Fuel Oil and Liquefied Natural Gas), efficiency systems for auxiliary engines and ship design solutions. As confirmed by outcomes gathered in our final empirical dataset, i.e., the “green” sample, among the different solutions analysed, the most adopted green investment options by European companies operating in Ferry, Ro-Ro and Ro-Pax industry are: a) the refitting of bulbous bow, aimed at the implementation of the current design of the hull to increase the overall hydrodynamics of the ship; b) the installation of onboard batteries as a source of energy for ship propulsion; c) the use of Liquefied Natural Gas (LNG) as alternative fuel for the ship propulsion, that contributes to a 100% reduction in sulphur oxides emissions, 80-85% of nitrogen oxides emissions, 95% of particular matter emissions and 20-30% of carbon dioxide emissions compared to HFO/MDO (Burel et al., 2013). The empirical analysis above mentioned is performed on 1,680 Ferry, Ro-Ro and Ro-Pax ships with flag from European Countries, with data gathered through IHS Maritime & Trade that holds the largest maritime ships database in the world, further integrated with data and information collected from several technical sources (e.g., news press, sustainability report and press release of European companies). Variables investigates within IHS Maritime & Trade regard the type of main and auxiliary engines and fuel type, hull materials, bulbous bow and other technologies and equipment aimed at mitigating the pollution and reducing harmful emissions. The outcomes shed light on the viability and feasibility of some green investments options by shipping companies operating in Ferry, Ro-Ro and Ro-Pax industry at European level. To deal with this limited result, due to the lack of comprehensive dataset capable to scrutinize the diverse green solutions implemented on board European-flagged vessels, it was decided to develop an original and detailed dataset, capable to provide additional information concerning the approaches, decisions and strategies adopted by each group owners and related future trends about the adoption of green strategies in the sector. Through the examination of different sources (e.g., news press, specialised journals, communications by the companies on their corporate website, academic papers, etc.), information related to innovative technical solutions and cutting-edge technologies for mitigating the pollution and reducing harmful emissions have been extracted for each ship of the database, i.e., the “overall” or “extended” sample. In this way, it has been possible to provide an exhaustive overview of the heterogeneous green solutions, equipment and components installed on board of ships that are part of the “green” sample and the related source, to allow the evaluation and examination from the point of view of the institutionalism of the source. In this way it was possible to focus on top ten best performer group owners of the “green” sample, to analyse the managerial and governance behaviours and attitudes implemented by them and to deepen in brief case histories the main strategies adopted by them.