With environmental deadlines looming, the cruise industry is racing to meet clean fuel targets. Selwyn Parker talks to Martin Tallett, Navigistics Consulting, and Francesco Balbi, MSC Cruises, about how achievable these green goals really are.
The cruise ship industry is working on all fronts to comply with tough and looming deadlines for greener fuel regulations that, operators warn, will increase their costs and passengers' prices.
Operators are hastily installing low-emission engines designed for low-sulphur fuel, or adapting old ones to meet the stringent standards, while engine-builders are trialling new technologies. But the big question mark, say consultants, is whether the refining industry will be able to meet the coming demand for low-sulphur fuel, especially as nobody knows exactly what the level of demand may be.
Indeed, nobody knows whether the ports will be ready. Experts point out that the port authorities will have to invest heavily in distribution infrastructure between now and 2020. And there's still uncertainty about whether the final deadline for compliance of 2020 is achievable.
The current position is that the industry has less than a decade to meet these regulations. Globally, the sulphur content of fuel oil must be down to 3.5% by early 2012 and it's already much lower in current and imminent environmentally controlled areas (ECAs) established under EU law. By 2020, the maximum in all the world's oceans will be 0.5%.
An update on progress is due in 2018 but, insists Martin Tallett of Navigistics Consulting, that's "far too late" given the considerable uncertainties. At present, the main worry is whether enough low-sulphur fuel will be available to meet the rapid rate of demand.
"The oil industry will have to considerably increase its refining capacity to meet the rise in demand for light fuel grades," one source pointed out.
But what is that capacity? As Tallett told the International Chamber of Shipping shipping conference in London in 2010, "The world does not have a clear picture of marine fuel demand and outlook."
Navigistics' research shows that demand could be twice as high as current estimates.
Counting the cost
Then there's the question of costs. The one certainty is that they will rise, but nobody knows by how much. Although it's early days, current assumptions are for low-sulphur fuel to be priced at $20-$50 a ton above normal fuel oil, a 150% variation in estimates. As such, it's a pricing headache for operators.
More importantly, will the refining industry be able, or willing, to bear the burden? A study by EnSys Energy estimates Big Oil will have to spend $150bn over ten to 15 years to get up to speed on the production of low-sulphur distillates.
"The main challenge in burning cleaner fuels is the increase in fuel price, mainly due to the fact that low-sulphur fuel is a distillate product, and the costs involved in the desulphurisation process," says Francesco Balbi, environmental coordinator of MSC Cruise's technical department. "In turn, that means extra costs for shipping. It is hard to predict the availability of low-sulphur fuel by the time the global level of 0.5% comes into force, probably by 2020."
Balbi also believes the official deadlines are too tight. Pressure is mounting on the industry, despite its relatively low contribution to global SOx and NOx emissions.
For example, even on the heaviest routes, SOx pollution is below 5% of that created by land-based transport. However, the EU, which is unhappy with what it regards as the International Maritime Organisation's (IMO) 'foot-dragging', has drawn up its own timetable, by establishing ECAs in the Baltic, North Sea and English Channel, where sulphur content must be below 0.5%, or between five and eight times lower than current levels. Moreover, new ECAs are coming onstream all the time.
Sweden was the first country, 12 years ago, to offer discounts on port and fairway dues to ship-owners that could prove their ships used bunkers with less than 1% sulphur. But, as operators point out, the achievement of a greener wake is a much larger issue than just low-sulphur fuel.
"Energy-efficient design covers the optimisation of the hull and appendices, engines, propellers and motors," says MSC's Balbi. "Our research is not limited to alternative green fuels. We're extending it to ship design, propulsion, machinery, operation and fuel. MSC Cruises tries to work on all five categories."
Engine-builders such as Wärtsilä agree on the importance of taking a wider approach. As two of the Helsinki-based firm's engineers, Heinrich Schmidt and German Weisser, point out in a research paper: "The exhaust emissions from ships are best controlled through optimisation of ship design and operation. In other words, by consideration of the ship as part of a whole transportation system."
In the pursuit of a whole transportation solution, even the paint matters. For example, new compounds are being applied to hulls to reduce friction and, consequently, fuel consumption and dioxide emissions. The first ship to use the 'four-release' coating - the non-toxic Intersleek 900 - was MSC's Poesia, which launched in early 2008. The latest is MSC's 133,500t Splendida, with its diesel-electric hybrid engines.
The first to receive Bureau Veritas' Six Golden Pearls, the blue-ribbon award for energy-efficient design, Splendida claims the lowest emissions of any cruise ship afloat. And virtue goes straight to the bottom line - Splendida will consume 12% less energy compared with earlier-generation vessels, but without compromising on speed.
Diesel-electrics are becoming the engine of choice on waterways too. Viking River Cruises' latest ship Viking Legend is equipped with them.
Engine-builders are fast developing solutions for earlier-generation power units. Engineers say the most common and effective technologies involve increased compression ratios, adapted fuel injection, valve timing and different nozzles. Do it all right and it's possible to lower NOx emissions by 30%-40%, they say.
Engine-builders did not wait for the new standards before taking action. For the past ten years, they've been working to reduce nitrogen and sulphur oxide emissions. The result is a 25%-30% fall in NOx emissions compared with previous generations of vessels.
Some see the interim technology of scrubbers as a saviour. Until recently, scrubbing the exhausts of harmful oxides has been regarded as a third-rate technology, but in January, Wärtsilä released a fresh-water scrubber that meets the coming sulphur emission standards in ECAs - and it does so, the firm says, "in an economic way".
The technology has shown sufficient promise to be awarded the IMO certificate by two classification societies - Det Norske Veritas and Germanischer Lloyd.
"Scrubbers efficiently reduce exhaust gas emissions, such as sulphur oxides and particulates, and nitrogen oxides slightly," the firm claims.
Wärtsilä will retrofit the technology to a container ship in August as part of an important trial project.
Others see the installation of scrubbers as little more than a temporary solution.
"An 800lb gorilla," says Navigistics' Tallett, only half-joking.
But there's no doubt the cruise ship industry is doing all it can against tight deadlines. Right now, the ball seems to be in the court of Big Oil.