Evaluation of a Low-Sulfur Marine Fuel Requirement in Virginia

 ABSTRACT

This report evaluates the economic, operational, environmental, and policy implications of a proposed Virginia requirement for certain ocean-going vessels to temporarily use 0.10 percent sulfur Low Sulfur Marine Gas Oil (LSMGO) while operating within Virginia waters. Using representative vessel characteristics, engineering assumptions, fuel-price data, and shipping economics, the analysis finds that incremental compliance costs are generally modest relative to voyage and fleet operating earnings. The requirement would primarily affect vessels currently using high-sulfur fuels with exhaust gas cleaning systems, while vessels already using compliant or alternative fuels would generally incur no additional costs. The report also considers fuel-switching feasibility, environmental and public-health benefits, implementation issues, and relevant legal and regulatory frameworks. Overall, the analysis concludes that the proposed requirement would impose measurable but limited (< 1%) economic costs while reducing localized sulfur and particulate emissions and eliminating scrubber washwater discharges within Virginia waters.