Of all the issues facing the cruise industry today, rising fuel prices and the need to become more environmentally friendly are perhaps the most pressing. For operators, increasingly expensive fuel has had a negative impact on operating costs, with some companies reporting a noticeable effect on their bottom line profits.

Coupled with this, increasingly strict environmental regulations have made the need to start using cleaner forms of fuel an urgent matter, but making the switch can be a costly business that could send fuel prices soaring. With prices going up, bunker fuel continues to represent a huge financial outlay for operators.

“Fuel is generally considered to be at least 50% of the operating cost of a ship,” says Ian Adams, CEO of the International Bunker Industry Association (IBIA). “For cruise lines in particular, this percentage may be slightly less as there will be other cost factors, such as catering, air conditioning and running the engines; however, it is still a significant expense.”

“For operators, increasingly expensive fuel has had a negative impact on operating costs.”

New rules

In addition to soaring costs, cruise lines have also been affected by tough new environmental regulations. By 2015, operators will be forced to change to fuel with a sulphur content of no more than 0.1% in emission control areas. With this in mind, it’s no surprise that switching to cleaner fuel is fast becoming the industry’s top priority.

“Finding eco-friendly fuels is a challenge for everyone,” says Adams. “They do exist, but at an added cost. For operators, it is a case of looking at the various alternatives, which may be technology or fuel-based, and this depends on cost and where the cruise line is operating.”

Created to represent the bunker industry, the IBIA seeks to provide an international forum on fuel issues, and speaks on behalf of the sector in discussions with policymakers. The organisation is a consultative member of the International Maritime Organisation (IMO) and also negotiates between buyers and suppliers.

“We discuss how to go forward between the separate sections of the association,” explains Adams. “It is often a case of educating both sides on the issues and coming to a united decision, which may be a compromise but is also a sensible outcome for the whole of the cruise industry.”

The IBIA also plays an educational role. “We teach members and non-members alike about industry issues from a technological and operational point of view,” adds Adams.

In recent years, the organisation has become vital for fuel suppliers and the cruise sector, and has given the bunker industry an identity in its own right.

Eco-friendly alternatives

When it comes to environmentally friendly fuel alternatives, a number of options are available, but inevitably each of them comes with its own merits and potential difficulties.

“There are different types being considered, but whether they will be used is another matter,” continues Adams. One such option is liquefied natural gas, which is already in use in other sections of the shipping industry and is considered by many to be a clean and sustainable choice.

“In addition to soaring costs, cruise lines have also been affected by tough new environmental regulations.”

However, the huge investment costs required to roll out the use of LNG across an entire fleet poses a significant challenge for operators. Other alternatives could prove impractical, too.

“Biofuels have been suggested, but there are issues surrounding the absorption of water,” says Adams. “Fuel cells are another option, but the technology hasn’t developed enough to make this a viable choice. The same goes for more exotic solutions like nuclear power.” Some operators have experimented with these alternative choices. In 2008 Fred Olsen launched a biofuel experiment using waste cooking oil. Nuclear power is also being investigated for use within the commercial shipping sector.

Despite the practical difficulties that may arise from the introduction of new fuel types, Adams believes the industry is largely doing a good job in rising to the environmental challenge.

He also thinks greater efficiency measures can be used to reduce operating costs still further, for example, by sailing at lower speeds and paying more attention to better engine maintenance practices.

“The cruise industry understands that it can save fuel in a number of ways, and this is something it is always keen to do,” he says. “I think cruise operators are taking the issue on board. There are various options that are available to look at, and plenty of smaller measures to be implemented that can make a really big difference.”