Total Cost of Ownership-Driven Fuel Transition Under the IMO Net-Zero Framework: Evidence from the Shanghai–Los Angeles Green Shipping Corridor

The IMO Net-Zero Framework and its carbon regulations impose binding constraints on fuel selection and fleet evolution. A techno-economic optimization model is developed to quantify this interaction along the Shanghai–Los Angeles green shipping corridor. The framework integrates vessel-level Mixed-Integer Non-Linear Programming (MINLP) with a Multinomial Logit formulation to simulate fleet diffusion, minimizing Total Cost of Ownership (TCO) over 2026–2050. The results identify a persistent marginal compliance regime driven by the tiered carbon penalty structure. Rather than achieving full compliance, fleets systematically position their Greenhouse Gas Fuel Intensity (GFI) near the penalty threshold, where limited penalties remain economically preferable to high-cost zero-carbon fuels. This behavior sustains fossil LNG as the dominant transitional option and delays the TCO crossover with ammonia until 2043. Under intensified penalties, the crossover advances to approximately 2030, triggering rapid cost escalation for LNG and eliminating the economic viability of drop-in biofuel strategies. Across all scenarios, absolute zero GHG emissions are not achieved due to residual fossil dependence and upstream Well-to-Wake (WTW) emissions. The transition is therefore bounded by the interaction between penalty avoidance behavior and the pace of Power-to-X fuel deployment. These findings indicate that carbon penalty levels determine the timing of decarbonization, while relative fuel prices govern technology selection, with direct implications for corridor-specific fuel infrastructure and investment decisions.