Innovation in product and services in the shipping retrofit industry: A case study of ballast water treatment systems

Eco-innovation research pays increasing attention to business models and their contribution to the diffusion of environmental technology into socio-technological systems. The extent to which a business model hampers or promotes certain types of eco-innovations remains an open question. In order to shed light on this issue, the authors develop a conceptual framework to show how a specific type of business model (Product-Service Systems) could be applied to the context of the maritime industry. With a focus on the Danish maritime industry, the case study addresses two questions: Which business models are being used to develop, install and service the ballast water treatment technology? And, How can these business models add value to the ballast water treatment systems in the market? The case shows that different business models are applied depending on whether the installation is on new or retrofitted vessels. Both installation and operation stages of ballast water treatment systems provide opportunities for collaboration among stakeholders. Based on the Eco-costs/Value Ratio model, the authors perform an analysis of on-board and port-based ballast water treatment systems with the aim to propose a possible product-service system. These results suggest that port-based systems have the highest potential for eco-efficient value creation and a possible product-service system can be designed for this kind of technology. The article highlights the point that authorities need to improve regulations to stimulate port-based ballast water treatment systems rather than on-board ballast management systems.