What is it about?

We introduce intuitive and easy-to-use fuzzy real options (RO) into the decision-making process of assessing maritime greening technologies. The considered RO valuation techniques take into account both benefits and risks associated with a greening technology. Furthermore, the results can be expressed visually, which makes the models even more intuitive. In the numerical example section, we compare the ‘plain vanilla’ purchase of a technology against a newly developed shared savings financing scheme. The results highlight the applicability of fuzzy RO models for shipping purposes and the relevance of alternative financing schemes for the greening of maritime operations.

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Why is it important?

1. Enhances the decision-making on the selection of maritime greening technologies 2. It is an intuitive and easy-to-use technique 3. Benefits and risks can be visualized and graphically compared 4. Highlights the benefits of shared savings financing schemes 5. The model is generic and, therefore, can be applied for any technology and any vessel type

Perspectives

It is important to have tools that appraise technologies for greening; such tools make assessment and comparisons as fair and as direct as possible. Moreover it is important to foster shared savings schemes, i.e. schemes where owners and suppliers of technology split risks and benefits. Such schemes motivate both owners and supplies to increase savings, i.e. to use less energy and therefore to decarbonise operations, as well as support further financial engineering that can further boost the attractiveness of green ships.

Prof. Orestis Schinas
Hamburg School of Business Administration (HSBA)

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This page is a summary of: Fuzzy real options and shared savings: Investment appraisal for green shipping technologies, Transportation Research Part D Transport and Environment, December 2019, Elsevier, DOI: 10.1016/j.trd.2019.09.016.
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