World leaders walked away from the COP15 summit in Denmark last December deflated. The hoped for sequel to the Kyoto agreement failed to materialise, having been squashed between the squabbling giants of the US and China.

But while the headlines focused on the lack of any significant progress, behind the scenes the meeting was a chance for international organisations and corporations to re-examine the question of greenhouse gas emissions.

Cruise and global warming

“A study of greenhouse gas output concluded that international shipping was responsible for 2.7% of global CO2 emissions in 2007.”

The International Maritime Organization (IMO), which regulates shipping around the world, spent 2009 gearing up for the event and its Marine Environmental Protection Committee (MEPC) produced voluminous materials looking at the sector’s impact on global warming and what strategies could be employed to reduce it.

A study of the greenhouse gas output of the industry first conducted in 2000 was thoroughly updated last year and concluded that international shipping was responsible for 2.7% of global CO2 emissions in 2007. While the cruise industry will account for only a small fraction of this output, its vessels are more energy intensive than other ships such as bulk carriers and as a discretionary form of shipping is an easier target for criticism.

In 2008, the most recent year for which figures are available, Royal Caribbean’s lines emitted 0.9t of CO2 per passenger carried and the figure for Carnival Corporation was slightly higher at 1.25t. CLIA is leading the industry in its approach to reducing greenhouse gas emissions.

“It’s a priority,” says Terry Dale, chief executive of the association. “It’s the right thing to do and as we see a greater emphasis on being greener, the industry has taken proactive steps and made investments. It also makes good business sense because our ships are more efficient, consume less fuel and hopefully more profitable as a result.”

Operators are aware of the risks posed by climate change. Carnival Corporation participates in the Carbon Disclosure Project, a worldwide organisation that logs the emissions of participating companies. In its disclosure statement the corporation noted regulatory and brand-related risks, but added it could not place a timescale on their impact.

The reason for this is that while the IMO is looking at introducing tighter regulations on the design and operation of ships and the implementation of market-based incentive schemes, it is making heavy work of moving forward. The 60th session of the MEPC reported good progress on moves towards finalising a greenhouse gas reduction regime but concluded that much remains to be done.

Ruling the waves

A critical aspect of the regulations will be the establishment of an energy efficiency design index (EEDI) and ship energy efficiency management plan, which will determine baselines against which different types of vessels will be measured. Unlike cargo vessels, Royal Caribbean Cruises estimates that 29% of energy consumption onboard is linked to hotel activities and heating, with 60% on propulsion.

“Royal Caribbean estimates that 29% of energy consumption onboard is linked to hotel activities and heating, with 60% on propulsion.”

This demand, combined with the stringent requirements for cruise ships to have auxiliary power and redundant systems, meant there was some wrangling over how those requirements would be applied but the questions have largely been settled. When the next session of the MEPC meets in September, it is expected to publish the final EEDI.

While these measures will create the framework within which the industry has to operate, these reductions can only be realised through investment in new technology. CLIA is working to support individual lines in developing and piloting methods of improving the energy efficiency of vessels.

The suspension of competition and oversight by CLIA means the industry can share the cost of research and development while using the most effective technology.

“When it comes to environment, safety and security, we don’t compete as an industry,” Dale says. “One of things I’m so impressed with is the variety of sharing that goes on in our various committees. The shipping sector as a whole recognises the importance of environmental issues and regards it as a priority but our industry has really stepped forward in the millions of dollars we’re investing in these pilot programmes. We always have been and we will continue to be a leader in the shipping community.”

Line action

Despite this atmosphere of cooperation there is evidence of disagreement over certain methods. For example, Carnival is investing heavily in shore power systems but Royal Caribbean has raised concerns that they might not lead to net co2 reductions if the source of the power is not clean.

Royal Caribbean prefers to trumpet its investment in design concepts, claiming that its Oasis-class ships will use 50% less energy per passenger than liners built a decade ago.

While no regulation has been finalised, the expectation is that cruise vessels will be required to comply with stricter environmental standards. The revision of MARPOL Annex VI to impose stricter limits on the emission of NOx and SOx demonstrate the kind of steps the IMO could take. The new rules will be phased in incrementally but, by 2016 when their full force is felt, they could have significant effects on deployment decisions.

Emission levels in emission control areas (ECA), including the coast of North America and the Baltic and North Seas, will be severely curtailed. Liners operating in those areas will be required to use more expensive low sulphur fuels or have exhaust ‘scrubbers’ installed.

“The designation of North America as an ECA will definitely have a significant impact,” Dale says. “That’s where we will see deployments altered because of the increase in cost of low sulphur fuel.”

Early savings for a green future

“Lines are looking at ways to capitalise on green credentials as a source of competitive advantage.”

The next few years will be important for the industry as it develops its approach to reducing emissions. However, although there is a risk that mandatory limits will be harsher than expected, there is also scope for lines to make early savings.

There are also signs that lines are looking at ways to capitalise on the green credentials as a source of competitive advantage.

Similarly, there is a widespread expectation that passenger interest in eco-destinations such as Alaska and Antarctica will increase.

The cruise industry is challenged when it comes to environmental performance. Passengers have high expectations that lines demonstrate their green credentials, but the energy-intensive nature of cruise shipping can make this hard to achieve. Through collaboration under the auspices of CLIA, operators will have to continue examining how vessel design and operational measures can help in reaching their goals.