Regulatory and Business Innovation in Uncharted Waters: Mandatory Cold-Ironing

This paper examines the economic and regulatory challenges of implementing onshore power supply for ships at berth, commonly known as cold ironing (CI), across the EU. Although CI can significantly reduce port emissions, its deployment is constrained by high upfront capital costs, fragmented stakeholder incentives, and the lack of effective cost recovery mechanisms. Drawing on evidence from 11 major European ports, we discuss concerns around market power, inefficient cost allocation, and risks to grid stability, particularly in smaller markets where ports operate as de facto monopolies. To address these problems, we propose a new “Extension-to-Grid” business model, in which the electricity grid operator assumes responsibility for the CI infrastructure. Our model improves transparency, reduces information asymmetries, mitigates monopolistic pricing, and, facilitates technical coordination. Our study contributes to the energy economics literature by linking regulatory enforcement to business model innovation, and, illustrates how market design, regulatory clarity, and institutional flexibility can improve the implementation of capital-intensive climate policies.