New IMO low-sulfur fuel regs creating challenges for vessel operatorsNov 8, 2012 11:29 AM
Courtesy Totem Ocean Trailer Express
Liquefied natural gas may emerge as an alternative fuel. Midnight Sun, a ro/ro vessel built in 2003 for Totem Ocean Trailer Express, will begin using LNG for propulsion by 2016. A sister vessel will also be converted to LNG.
As of Aug. 1, 2012, stricter rules took effect for sulfur emissions from ships sailing off the coasts of Canada and the United States. These requirements are part of the International Maritime Organization’s (IMO) effort to reduce the incidence of sulfur emissions in the North American Emission Control Area (ECA).
Sulfur emissions contribute to atmospheric levels of sulfur dioxide, a major pollutant long known to be harmful to the environment.
The IMO was responsible for drafting Marpol: the International Convention for the Prevention of Pollution from Ships. Under Marpol’s Annex VI, sulfur emissions limits for the Sulfur Emission Control Areas (SECAs) are designated as 1 percent by weight until Dec. 31, 2014. The limit will then decline to 0.1 percent on Jan. 1, 2015.
For shipping companies, this means finding suitable low-sulfur fuel or treating their vessels’ marine diesel emissions with scrubber technology or other technologies to bring the emissions in line with the new requirements.
Certain parts of the ECA-designated areas off the United States and Canada are specified in Annex VI. The U.S. Coast Guard will enforce compliance both for U.S. and foreign flag vessels. Smaller vessels under 400 gross tonnage are likely already in compliance with the standard, as the majority of these vessels use distillate fuel oil that meets the sulfur limit.
According to the Coast Guard, ship operators must document their fuel use with bunker delivery notes — for those over 400 gross tonnage, as well as take fuel oil samples at the time of delivery, and have discrete written fuel oil changeover procedures, showing how and when the fuel oil changeover is to be done to ensure that only compliant fuel oil is burned within a designated ECA. In addition, a fuel oil changeover logbook must document the volume of compliant fuel oil in each tank as well as the date, time and position of the ship when any fuel oil changeover operation is completed before entry into or commenced after exit of a designated ECA.
Jeffrey W. Aldrich, chief instructor at the Marine Mechanics Institute in Orlando, Fla., says that enforcement of the standard at foreign ports, however, may be more difficult. “It is lot harder to implement any of the Marpol annexes in any of the large shipping fleets because I believe they leave it up to the local law enforcement of the country where the ship is registered or flagged to enforce the same,” he said.
But Aldrich says that while the sulfur content of fuel does create emissions that pollute, it also has a lubricating property that is beneficial to engines. Removal of it tends to lead to abrasive wear, he said. “Sounds simple until you compare higher component cost due to the loss of lubricity. So most people just add some form of additive to the fuel, which unless checked periodically by the authority, really defeats taking the sulfur out in the first place.”
Cost concern and alternatives
Total fuel bunkering cost is already rising. Prices reportedly rose by as much as 20 percent in 2012. With the low-sulfur requirements, future prices will likely burden operators as they try to stay competitive in an already challenging freight market. However, if supply of such fuel rises to meet the demand, prices may stabilize.
“Currently, low-sulfur fuel costs more than standard fuel; however, with the implementation of the North American Emission Control Area and the subsequent increased demand for low-sulfur fuel, we should see a reduction in low-sulfur fuel costs,” said Kevin Krick, environmental affairs director for American President Lines (APL). “It is doubtful this will ever match the cost of standard fuel; however, as more of the world goes toward lower-sulfur fuels, it may eventually normalize.”
Some shipping companies are imposing a fuel surcharge to their customers in order to stay compliant, while keeping their pricing competitive. ZIM Integrated Shipping Services Ltd. said that it will implement a low-sulfur fuel charge of $20 per 20-foot equivalent unit (TEU) for trade between North Europe/Mediterranean and all North American coasts in both directions.
Alternative measures to changing to low-sulfur fuels include flue-gas cleaning systems or scrubbing technology. In spite of costs of installing scrubbing equipment, this approach may become a viable alternative.
“We are currently testing a Krystallon-Hamworthy scrubber aboard the APL England in conjunction with the California Air Resources Board and the Ports of Los Angeles and Long Beach,” said Krick. “While the final test results are being analyzed, we are optimistic that the scrubber will have performed effectively. If scrubbers can demonstrate that their emissions reductions are on par with low-sulfur fuels, it would be good to have them as a potential solution alongside low-sulfur fuel in order to comply with regulations.”
Some firms are turning to liquefied natural gas (LNG) as an alternative fuel that is clean burning. However, its availability, cost and utility need to be demonstrated before this fuel emerges as a plausible option to low-sulfur fuel.
“It is somewhat a plausible solution and an interesting one to say the least,” said Aldrich. “I have heard lately of the larger vessel companies trying to go to LNG for auxiliary power in order to help with emissions.”
Aldrich cautioned that the tradeoff of LNG’s clean emissions may be some loss of total power. He noted that the ships using LNG engines or converted LNG engines for generators, bilge pumps and transfer pumps often sacrifice power delivery.
“This helps some with overall emissions,” he said, “but those engines tend not to produce enough overall power for propulsion at shipping industry requirements.”
Recently, the Environmental Protection Agency and the Coast Guard approved a waiver of conditional emission control area to Alaska-based Totem Ocean Trailer Express (TOTE), allowing the shipping company to use LNG as a means of complying with new fuel emission requirements to reduce air pollution from ships. Specifically it allows them to convert its two Alaska-bound ships to LNG, instead of using more costly fuel.
TOTE has operated roll-on/roll-off cargo vessels between the ports of Tacoma, Wash., and Anchorage, Alaska, since 1975.
TOTE said this will help make their ships “among the cleanest in the world.”
The company stated that the LNG infrastructure that is to accompany TOTE’s plan may help other transportation industries in the Pacific Northwest.
“This is the first permit issued under the Annex VI, Regulation 3 program, and it is tangible evidence that when committed organizations join together, innovative solutions can result,” said Phil Morrell, TOTE’s vice president of marine and terminal operations, in a prepared statement.
“LNG is in its infancy for use as a fuel aboard container vessels,” said Krick. “Given that the fuel tanks are much larger, thereby reducing cargo carriage, and that there is currently no standardized bunkering procedure for LNG, it remains to be seen whether it will be readily adopted. As companies make strides in reducing emissions on conventional engines, any advantages LNG may have in that regard may be reduced, and the drawbacks of utilizing LNG may prohibit it from becoming cost effective.”