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The Big Fuel Switch


8 September 2010


A directive to use low-sulphur fuel while docked was a long time coming. Now operators are getting to see what it means in practice. Orla O'Sullivan investigates.


As 2010 got underway cruise operators got a better idea of how a 2005 European directive limiting the sulphur content of ships in port would affect them. The practicalities of directive 2005 / 33 / EC became especially clear as the Mediterranean cruise season kicked in. As Holland America readied vessels to relocate to the Mediterranean, for example, it knew from experience to change the gaskets before the ships left North America.

Robert Diaz, deputy director of environmental management systems with Holland America Line, explains that among the problems caused to ship engines from running two very different kinds of fuel, regular and low sulphur, is that gaskets and fuel pumps wear out faster.

"Heavy fuel oil has higher viscosity so you have to heat it to use it," he says. "Low sulphur marine gas doesn't have to be heated. There is a temperature difference of 200°C, and some gaskets are not taking that very well. We've modified our maintenance a lot."

"Low sulphur fuel costs 30-40% more than heavy fuel oil."

Whatever it takes, cruise lines that dock in European ports will have to do it.

Greece is the exception to the mandate that Diaz paraphrases as: "Ships going into 27 EU states are required to change to marine gas oil with 0.1% sulphur, maximum, as soon as possible after they have safely docked."

On departure they can change back to regular fuel at a safe opportunity. According to Diaz, for Holland America this has been translated to mean switching within one hour after anchoring and within one hour of departure.

Demand for low sulphur fuel

Most major cruise operators already have experience complying with other low-sulphur fuel regulations. Typically, that would have been in broad bodies of water in specific spots that are designated as Sulphur Emission Control Areas, known both as SECA and ECA. There are ECAs in Europe's North Sea and the Baltic region, as well as in parts of North America, such as California and Hawaii. The EU directive covers just the port but it spans the whole EU jurisdiction.

The exception made for Greek ports may be because of difficulty obtaining the right fuel there. Supply of low sulphur fuel can be a challenge, some market observers say. That has not been the case in Holland America's bunker ports, Barcelona, Spain, and Cittavecchia, Italy.

"Low sulphur fuel costs about 30-40% more than heavy fuel oil, fluctuating pretty much in lockstep with the underlying fuel price," Diaz says. "But it may change as demand for low sulphur fuel rises in Europe."

Scrubbing: a viable alternative?

Instead of buying the more expensive fuel some operators are exploring the option of using scrubbing technology onboard to remove sulphur from engine emissions, although that is a nascent technology with complications of its own.

In April, 2007, Holland America announced that its ms Zaandam would be the first cruise ship using such a system. Supplier Krystallon was acquired by another UK firm, Dorset-based Hamworthy, in late 2009, and as of late spring 2010, scrubbing was not in use on ms Zaandam.

Whether scrubbing can work on a commercial basis still seems to be in question. Environmental groups such as Friends of The Earth have noted that running scrubbing machines to remove water-based pollutants causes airborne pollutants that contribute to sludge.

Adam Goldstein, president and chief executive of Royal Caribbean Cruises, also noted this issue in conversation with World Cruise Industry Review at the Cruise Shipping Miami conference in March. The removal of some pollutants works at cross purposes with the removal of others, he said.

"The removal of some pollutants works at cross purposes with the removal of others."

Worse, Goldstein said: "In one area, the EU focuses on sulphur and in another on nitrous oxide."

RCCL announced in mid-June that it would test on Independence of the Seas the first system said to scrub sulphur dioxide (SOx), oxides of nitrogen (NOx) and carbon dioxide (CO2) from engine emissions in one process. The company expects the results of its test with technology provider Ecospec, Singapore, by next spring.

Clean fuel may be worth the cost

Helsinki-based Wärtsilä was the first provider to have its scrubbing system certified as SECA-compliant by the classification societies Germanisher Lloyd and Det Norske Veritas. It got the designation last September and its test on a Finnish tanker also scrubs fuel to the new EU port standard.

One might expect Fred Danska, director of the company's cruise business, to advocate scrubbing for all. On the contrary, he emphasises that it's an individual decision whether to buy regular diesel and clean it or to buy low-sulphur fuel at the outset.

"The only thing that matters is the cost of ownership and operation [of scrubbing technology] and the cost difference between high and low sulphur fuel," Danska says. The hard part to factor into that cost equation: "predicting the future price of oil."

Differences in firms' itineraries will also determine whether it makes sense to simply buy the required fuel. "One part of the formula is how many days you spend in the SECA. The longer you spend in a SECA the more demand you'll have for low-sulphur fuel, the more sense it makes to consider scrubbing."

"The only thing that matters is the cost of ownership and operation, and the cost difference between high and low sulphur fuel."

Danska's not doing the 'hard sell', because, he says, "If we push a scrubber on a client and the price of low-sulphur fuel falls, he's going to lose money. Do you think he's going to come back for electrical automation, a bridge, etc?"

Those who buy can expect certain operational hiccups from running two fuel types, potentially extending to fires. As mentioned above, Holland America has to change its gaskets more when using low sulphur fuel.

"If you didn't change them, you could get fuel leaks from which you could get fires," says Robert Diaz. Beyond that, he notes, they had experienced a fuel pump seize when just one of five engines cut out; not a problem in port, though all engines might be in use at sea.

Regulatory threat

There is bound to be more environmental regulation on the horizon. Interestingly, RCCL's Goldstein was in a minority among cruise line chief executives in a panel discussion at Cruise Shipping Miami in that he did not rate regulation as the biggest threat facing the cruise industry. Nonetheless, he said of the EU port directive: "This could be very onerous for us. We don't know yet because there's so much uncertainty."

Goldstein's fellow panelist Gerry Cahill, Carnival president and CEO, by contrast, said: "The biggest threat today is clearly over-regulation. Some days you feel there are new regulations coming from almost every agency in the world. We want to work with the authorities and we are committed to constant improvement to reduce sulphur, nitrous oxide and particulate matter, but we would like to see harmonised regulation and one major point of contact regarding regulation."