Make a Clean Start: New Fuel Regulations
10 May 2011 Don Gregory
IMO regulations requiring operators to switch to cleaner fuel by 2015 are proving a headache for the cruise industry. Don Gregory, director of the Exhaust Gas Cleaning Systems Association, tells Andrea Ashfield how lines could benefit by using scrubbing technology instead.
From 2015, regulations introduced by the International Maritime Organisation (IMO) will impose a strict limit on the sulphur content of fuel used by the cruise industry.
The rules dictate that ships visiting specific emission control areas such as the Baltic Sea, English Channel and US waters must switch to fuel with a sulphur content of no more than 0.1%. In addition, by 2020, ships operating anywhere in the world will be required to burn fuel with a sulphur limit of no more than 0.5%, with a potential delay until 2025. The new legislation has met with criticism from within the cruise community amid concerns over the practicalities of compliance.
David Dingle, CEO for Carnival UK, described it as a "badly researched" piece of legislation, which poses the "biggest single threat to the cruise industry". Many operators fear that the change to low sulphur fuel will lead to a huge rise in costs, with consequences on a global scale.
As a result of the 2015 deadline, many operators are now looking at alternative solutions, such as scrubbing technology, which is used to clean exhaust gases and remove sulphur. In June 2010, Royal Caribbean announced that it would be installing the technology on Independence of the Seas, while Holland America is continuing to experiment with scrubbing onboard Zaandam.
Don Gregory, director of the Exhaust Gas Cleaning Systems Association (EGCSA), thinks the installation of scrubbers could prove crucial for operators seeking to comply with the new rules.
"The industry is facing a challenging time," he explains. "To comply with the 0.1% limit in 2015, operators need to use diesel, which at the moment is more expensive than regular marine fuel. This would result in an increase in demand, followed by shortages, with all the road transport fuel used in cars across Europe being demanded by the marine industry. Unsurprisingly, cruise operators are very concerned."
The EGCSA supports the use of scrubbing technology and works alongside the cruise industry to promote the interests of designers, installers and suppliers of exhaust gas cleaning systems. While there are several different types of scrubber, the majority feature three key elements: a vessel that enables the exhaust stream from the engine or boiler room to be mixed with fresh or sea water; a treatment plant to remove pollutants; and a sludge-handling facility. Supporters of the technology believe it will enable cruise operators to benefit from lower operating costs while reducing the industry's impact on the environment.
"We run workshops and provide information about how these systems work and how much they cost to operate," says Gregory. "It is frustrating that there is still a lot of incorrect information out there."
Efficiency vs luxury
According to Gregory, the progress made by the cruise industry so far has largely been as a result of regulatory requirements, and for operators who are focused on cost, it can be difficult to determine the point at which to begin investing in scrubbing technology.
"A cruise ship is a mobile hotel, and there is a lot of cost and energy required to provide basic requirements like air conditioning, heating and lighting," he says. "This is a pretty competitive business."
When it comes to complying with the 2015 regulations, he predicts that it will be a matter of strategy.
"Should operators do nothing and wait for 2015, or should they start to look at cleaning technology now?" he asks. "Those who invest today won't see much immediate benefit in terms of saving as the fuel price difference isn't that great, but if they delay, the price of scrubbers will go up and by 2015 operators could still be waiting for installation. It's a case of financial forecasting."
Operators could also prepare to meet the cost by making efficiencies in other areas. "We may see more attention paid to the speed between ports," says Gregory. "It could mean that the industry has to be less flexible, perhaps rescheduling things so that the customer has more time at sea and the vessel is slower."
But such measures can only go so far.
"At the end of the day, the cruise industry is in the entertainment business and people like to be spoilt," says Gregory. "It's one thing to look at efficiency measures and scheduling, but these companies mustn't forget what business they're in."