Optimal Replacement, Retrofit, and Management of a Fleet of Assets under Regulations of an Emissions Trading System

Abstract

This paper presents a model for parallel replacement and improvement for a fleet of assets to minimize both the economic costs and greenhouse gas (GHG) emissions where the emissions are limited by an emissions trading system also known as cap-and-trade. The firm which owns the assets has the options of using, storing, improving, or salvaging them. Different technological types and their performances have been considered for the assets. The firm has the option of purchasing new assets from varying technologies and/or improving its existing assets to a higher-performance type. The model considers the possibility of both banking the emission allowances or trading them in the market. The model was applied to data from a fleet of excavators in Ontario, Canada. The model and the findings of this case study could help emitter firms to simultaneously manage the emissions and costs of their assets in a jurisdiction regulated by cap-and-trade.

Additional information

Funding

The authors acknowledge the financial support from the Natural Sciences and Engineering Research Council (NSERC) of Canada for this research.

Notes on contributors

Amir Rajabian

Amir Rajabian received his M.A.Sc. in Mechanical and Industrial Engineering from Ryerson University and his B.Sc. in Industrial Engineering from Iran University of Science and Technology. He is currently working as a Continuous Improvement Manager in construction industry. His main research interests include optimization, asset management, and Lean manufacturing.

Mageed Ghaleb

Mageed Ghaleb is currently a Ph.D. candidate at the Department of Mechanical & Industrial Engineering at Ryerson University. He obtained his M.Sc. in Industrial Engineering from King Saud University with a Major in Industrial Systems and his B.Sc. in Industrial and Manufacturing Systems Engineering from Taiz University. His main interests include engineering optimization, production scheduling, and maintenance planning.

Sharareh Taghipour

Dr. Sharareh Taghipour is an Associate Professor and the Director of the RRMR Lab at the Department of Mechanical and Industrial Engineering at Ryerson University. She is a Tier 2 Canada Research Chair in Physical Asset Management. She obtained her Ph.D. in Industrial Engineering from the University of Toronto and received her B.Sc. in Mathematics and Computer Science and her M.Sc. in Industrial Engineering, both from Sharif University of Technology, Iran.