Overview of first study

Relation to Ph.D. main objective: The first study focuses on ship owners having to comply with the mandatory EEDI regulation, which prescribes minimum performance standards for newly built vessels. For ship owners seeking to improve the environmental performance of their vessels, technology and operational drivers are key levers they can utilize to reach this goal. Therefore, the focal point of the first study is the complex relationship between technology and operational levers and environmental performance in the context of the EEDI regulation. Figure (1.4) illustrates the relation of the first study to the overarching objective of the Ph.D. thesis.

Figure 1.4: Relation of first study to the main objective

Purpose and research questions: From a bounded rationality perspective, ship owners seek

“good enough” solutions in the context of the regulation and do not utilize all levers that could improve a vessel’s environmental performance. Therefore, many different ship design solutions yield similar levels of environmental performance, and the levers can explain observed differences in performance. In line with the empirical setting, we examine two facets of vessels’ environmen-tal performance, namely, their technical energy efficiency and regulatory compliance. We seek to examine the impact of available technology and operational levers by asking:

RQ 1: “What is the impact of technology and operational levers on environmental performance?”

We utilize a design science perspective to establish a link between technology and operational levers and environmental performance for existing vessels. Further, based on previous work and empir-ical observations, we identify the adoption of alternative fuels, a vessel’s lifetime, and emission prevention related to the main machinery technology as three key levers for ship owners. In our setting, the vessels with relatively poor environmental performance are of special interest for two reasons: first, they are the main targets of the minimum performance standards stipulated by the EEDI regulation and, second, they have a relatively higher impact on the carbon footprint of ship owners than vessels with good performance. In addition, what explains performance variations for vessels likely differs from what explains performance differences for poor vessels. Thus, we posit that important additional insights can be gained by examining the impact of technology and operational levers across the range of environmental performance. This conjecture is summarized in our second research questions:

RQ 2: “How does the impact of technology and operational levers vary across the range of envi-ronmental performance?”

Methodology: To answer our two research questions, we develop a set of hypotheses for the three aforementioned technology and operational levers and empirically test them with quantita-tive, statistical methods. For this purpose, we combine three secondary data sources to obtain a novel data set: the European Maritime Safety Agency’s database incorporated in the EU-MRV regulation; the Clarkson World Fleet Register (CWFR); and the Thomson Reuters Eikon Shipping (TRES) database. The resulting data set contains detailed information about the environmental performance and ship-specific design features for 2,058 vessels across multiple shipping sectors.

Because we are interested in examining the effects across the range of environmental performance, we utilize quantile regression (QR) methods to examine the relationship between technology and operational levers and environmental performance. It is well established that QR is particularly useful to analyze the potential heterogeneity of effects across the conditional distribution of the

dependent variable, which complements methods focusing on a single point-wise measure, like lin-ear regressions (Fitzenberger & Wilke, 2015).

Findings: Due to the outlined approach, the results present a granular appraisal of the impacts of technology and operational levers on environmental performance. A key result is that the estimated effects are indeed heterogeneous across the range of energy efficiency and regulatory compliance, which is not adequately captured by a single point-wise estimate. Our results provide preliminary empirical evidence that the adoption of alternative fuels is a strong lever to improve vessels’ energy efficiency, as indicated by the EEDI rating, and to comply with the EEDI regulation. The results suggest that emission prevention related to the main engine features, is, at best, a moderate lever to improve the environmental performance of vessels, which is a surprising result. Lastly, the key covariate in our sample related to the managerial decision to adapt an existing vessel to prolong its operational use is a vessel’s lifetime. We find that the later vessels are in their lifetime, the lower their environmental performance. In addition, the effect is most pronounced for vessels with poor performance, where improvements would be the most desirable. In summary, our results show that the relationship between technology and operational levers and environmental performance is complex.

Contribution: The derived empirical results have important implications for theory and prac-tice. From a theoretical perspective, examining the drivers of performance and their performance implications has always been at the heart of operations management (Ketokivi, 2016). Further, explaining differences in performance at varying levels of performance is of high relevance in many settings (Bromiley & Rau, 2016). Our results show that the impacts of performance drivers can significantly vary across the range of observed performances. Therefore, we suggest that the un-derstanding of and insights into drivers of performance can be advanced by considering the hetero-geneity of their impacts. The research also connects previous analytical research focusing on clean technology adoption in the transportation sector with the highly relevant topic of alternative fuel adoption for the maritime industry. From a practical perspective, the results provide a granular analysis for decision makers in the maritime industry about the capabilities and limitations of the considered levers for improving environmental performance. To illustrate, main engine adjustments

to reduce fuel consumption are often considered easy and effective measures to improve technical energy efficiency and comply with the EEDI regulation. However, our results overall highlight the limits of this technology lever, and we would advise ship owners to see measures like design speed reductions as complements to other levers, instead of mainly relying on them.