The relationship between EU's public procurement policies and energy efficiency of ferries in the EU

The European ferry sector is the largest ferry sector globally and one of the key environmental issues facing the sector is the mitigation of greenhouse gas emissions. This paper provides an analysis of how the EU ferry procurement policies lead to lack of implementation of energy efficiency measures, contrary to the EU's key objective of reducing CO2 emissions in ferries within the EU region. This paper is the first analysis to examine the public-private sector interaction in transport and how this leads to a lack of implementation of energy efficiency measures. Analysing the sector using agency theory suggests that split incentives are pervasive and can stymie attempts to improve the energy efficiency of ferry services in the procurement of ferries. The findings suggest that there is a need to review current ferry procurement policies with a view to devising procurement policies that can address the split incentives, as well as other policies, that are outside the scope of procurement policies, which can be used to minimise the split incentives.