Onboard Carbon Capture and Storage (OCCS) and Global Carbon Markets: A Financial Economics Perspective on Technology-Market Co-evolution

DOI

10.2991/978-94-6239-642-5_87How to use a DOI?

Keywords

Maritime Carbon Markets; Onboard Carbon Capture and Storage; Technology-Market Interaction; Real Options; Carbon Price Dynamics

Abstract

Maritime shipping faces IMO 2050 mandates and carbon prices of $15-120/ton. This paper analyzes OCCS-carbon market interactions, proposing three corrections to real options theory. First, regulatory ambiguity aversion creates political risk premiums that delay investment beyond standard volatility thresholds. Second, oligopsonistic market structure—where 20 carriers control 70% of tonnage—enables strategic OCCS withholding to extract credit rents. Third, liquidity constraints impose 15-20% transaction costs on early OCCS credits. These modifications reveal that price-based incentives alone may require 40 – 60% public co-investment to achieve optima. Political economy analysis further shows that linked ETS face sovereignty-tradeoff dilemmas, static offset quotas suppress maritime abatement by 70%, and voluntary markets fail due to non-additive baselines. We propose tiered quotas tied to MRV compliance and charter party reforms to resolve shipowner-charterer principal-agent misalignments. Regulators should harmonize monitoring standards (±5% accuracy) and fund price collars through auction revenues; investors should prioritize high-compliance flag portfolios and sovereign-backed liquidity guarantees.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Zhe Zheng
AU  - Jiangying Niu
AU  - Junjie Zong
AU  - Zhekai Zhang
AU  - Yang Zhou
AU  - Kaifan Xue
AU  - Zhiqiang Huang
AU  - Yujia Pang
PY  - 2026
DA  - 2026/04/29
TI  - Onboard Carbon Capture and Storage (OCCS) and Global Carbon Markets: A Financial Economics Perspective on Technology-Market Co-evolution
BT  - Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
PB  - Atlantis Press
SP  - 843
EP  - 848
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-642-5_87
DO  - 10.2991/978-94-6239-642-5_87
ID  - Zheng2026
ER  -