Improved air emissions won’t come without higher costs.
"Fuel is the largest single cost of vessel operations today,” explains Chris Koch, president of the World Shipping Council. “A typical mid-size, 5,000-container ship might have a capacity of 6,500 tonnes of fuel. At today’s price of roughly US$680 per tonne of bunker fuel, filling it would cost roughly US$4 million.”
But with the changes coming as the new North American Emission Control Area (ECA) comes into effect from August 1, 2012, that cost is going to get a lot higher – even though it will help to improve the quality of air for millions of people living in the region.
“Beginning on that date,” Koch explains, “the maximum sulphur content in fuel burned within 200 nautical miles of North American shores will be 10,000 parts per million (ppm), or one percent. From January 1, 2015, however, the maximum sulphur content allowed will decrease to 1,000 ppm, or 0.1 percent.
“That low-sulphur fuel may cost up to twice as much as existing fuel, and the extra costs will have to be passed on,” he says. “Improved air emissions won’t come without higher costs.”
Transport by modern ship is the most carbon-efficient way to move goods; moving a tonne of goods over the ocean is more environmentally friendly than by rail, truck, or, certainly, by air. But most ships are driven by great big engines fueled by bunker oil, a material which, unfortunately, contains a lot of sulphur. Current standards allow for sulphur content of up to 4.5 percent (although WWL led the industry by adopting a 1.5-percent standard for its fuel in 2004). Burn bunker oil, and you produce emissions, including SOx – sulphates, a family of gases that are a significant pollution concern, not least in port areas where there are also a lot of people.
This was the reason why the International Maritime Organization (IMO) accepted a proposal establishing the new ECA, which covers Canada and the US. Part of the International Convention for the Prevention of Pollution from Ships (MARPOL), the new ECA agreement also includes new engine designs intended to reduce NOx emissions. The positive impact will be significant.
“NOx, SOx and particulate matter (PM) emissions from ships contribute significantly to air quality issues in both the US and Canada,” Koch says. “The two countries see almost 100,000 vessel calls at their ports per year. They estimated that by 2020 the ECA would reduce sulphur emissions by 834,000 tonnes or by 86 percent; NOx emissions by 294,000 tonnes or 23 percent; and PM by 85,000 tonnes or 74 percent – substantial reductions.”
The US and Canada initially estimated the costs of compliance at approximately US$3.2 billion in 2020; however, increasing fuel prices mean this figure will almost certainly grow.
The industry is already making the changes needed. Some, like WWL, have already moved to low-sulphur fuel; others will need to use different lubrication oils and take other measures for proper engine operation and power. Emission-cleaning technologies such as scrubbers (which remove harmful materials from exhaust gases) may also be used, although there are some questions remaining on how to handle the resulting effluent. “The industry is interested in this option because it could allow the use of cheaper bunker fuel while still meeting emission objectives,” Koch says.
Of course, it’s not just a matter of switching to low-sulphur fuels; the refining industry has to produce them. “We don’t expect significant supply problems for the one-percent sulfur requirement,” Koch says. “The 0.1-percent sulphur requirement applicable in 2015 presents greater demands, and we may encounter difficulty procuring compliant fuel in some areas.” Accordingly, there are provisions in the regulations for consideration when ships cannot obtain compliant fuel.
Koch concludes that the ECA and other changes under MARPOL are a necessity. “Ship operators will see higher fuel costs and more expensive engines, and freight bills will be higher. But the liner shipping industry understands its obligation to address the environmental and health issues that can arise from ship emissions. Finding solutions to these challenges is what we focus on; environmental sustainability is a long-term strategy, not a single event. With the support of environmentally-conscious members of the industry like WWL, we can achieve continued progress on meeting other environmental challenges facing the maritime transportation industry.”
Chris Koch is President and CEO of the World Shipping Council, a trade association of the world’s leading liner shipping companies. Born and raised in Berkeley, California, he is a graduate of the University of California, Santa Barbara, and the University of Washington School of Law. He and his wife, landscape designer Lynn, have been married for 35 years. They have three children.