Effects and effectiveness of maritime environmental legislation for commercial freight shipping on the North and Baltic Sea

Newspaper reports have claimed that cleaning up maritime shipping could lead to modal 
backshift to land-based transport and therefore to increased levels of environmental pollution. 
However, the mutual influence of different factors and effects is unclear today. Thus, this study
explores effects and the effectiveness of maritime environmental legislation for commercial 
freight shipping in the North and Baltic Sea areas. The effectiveness of legislation was to be 
scrutinised by studying compliance with the laws, as well as comparing legal impacts on 
different types of shipping companies.
Employing sequential mixed methods research and triangulating empirical data with findings 
from prior studies and economic theory, this work studies how legislation affects company 
costs, freight rates and modal choice for the Northern European shipping industry. The study is
situated in the research field of environmental law and economics and is based on legal and 
economic theoretical foundations. Empirical data stems from in-depth qualitative interviews 
with twelve experts in and around the shipping industry, as well as questionnaire data from 121 
shipping companies active in the North and Baltic Sea areas. Qualitative content analysis was 
chosen to systematically extract knowledge from translated interview transcripts and build a 
theoretical framework to inform the subsequent quantitative data collection. Questionnaires 
were analysed statistically, for example with sum of squares analysis and structural equation 
modelling, specifically partial least squares analysis (PLS-SEM). Findings were triangulated 
with insights from prior studies and knowledge drawn from economic theories.
Key findings include significant effects of maritime environmental legislation on both 
investment and operational costs of shipping companies, while freight rates are only affected to 
a limited extent by laws. Consequently, the danger of immediate modal shift is found to be 
negligible, although changes both in freight rates and in modal choice may in future be 
witnessed with a time lag of several years. Noncompliance is found to be statistically significant 
in the range of 10-15% of shipping companies, influencing the economic effects of legal 
policies. An economic impact assessment differentiated by company characteristics showed 
that though companies are differently affected by legislation, no statistical correlation may be 
found between legislation and company type, size, or any other of the ten characteristics 
identified. Policy recommendations include a more economic approach to environmental laws, 
improved enforcement of legislation, and a longer-term perspective to account for time lags in 
economic effects.