Following the European Union’s Clean Air for Europe Impact Assessment drawn up in 2005, sulphur dioxide emissions (SOx) from shipping were forecast to exceed those from all land-based sources in the EU by 2020. A directive was subsequently issued to regulate emissions from ships operating in the Baltic and North Seas, and the English Channel (designated sulphur emission control areas or SECAs). From 2015, the maximum content of sulphur in bunker fuels will be cut by 90% to 0.1%.
The new regulations will be brought in regardless of the protests being made by shortsea forwarders and their representative bodies on the grounds that there is still no viable alternative fuel or infrastructure in place to support its distribution or (in the case of scrubber technology) its recycling. According to the European Commission, the cost associated with new low sulphur bunker is something those forwarders and their customers are just going to have to suck up.
Speaking at the recent Spring Congress of the Association of European Vehicle Logistics (ECG), Bjorn Svenningsen, head of Car Transport Sales at United European Car Carriers (UECC) and ECG board member for the Maritime and Ports Commission, said opposition to the SECA limits would continue unless the technology and an alternative fuel infrastructure was available. Svenningsen said it was a topic that was going to have a tremendous affect on the industry and would remain a key focus area up to and beyond the deadline.
Focusing a myriad issues into one direct question to Maurice Mullen, assistant secretary with responsibility for maritime, ports and freight issues at the EC’s Department for Transport, who was on the panel at the Congress in Dublin, Svenningsen asked what Ireland was going to leave in ‘the low-sulphur toolbox’ during its presidency of the European Union, which it is holding for the first six months of 2013.
Mullen said it was more a question of what the member states of the EU were going to leave in the toolbox and that any discussions the shipping industry now had should focus on a direction other than repeal because there was no room for manoeuvre on the implementation of the regulations.
Finding a solution is proving as difficult as persuading European Commission members that operators need leeway around the deadline.
Learning to fly
According to ECG president and commercial and logistics director of Grimaldi Lines, Costantino Baldisssara, without a viable alternative a postponement is needed because without one operators will be in contravention of a rule it is impossible to meet. "If tomorrow they asked us all to fly instead of walk, we couldn't do it," he said.
Repeating criticisms outlined at last year's RoRoEx conference in Gothenburg (read more here), the current options all have their flaws.
The option of switching to the distillate product Marine Gas Oil (MGO) is estimated to incur a 50+% price premium effect and, according to Mike Sturgeon, executive director of the ECG, the industry does not know if it is possible to even produce enough middle distillate fuel to supply the needs of the shipping industry.
Scrubber technology on the other hand, which means installing a large exhaust gas cleaning system that can take out 98% of sulphur emissions, incurs an outlay of up to €200,000 ($262,000). However, investment is not the real issue to an industry making continual investment in equipment according to Baldissara. "If [operators] are not afraid to buy a ship worth €50m, why would they be afraid to spend €200,000 on a scrubber?" he asked. "There must be other reasons why they are not buying them."
These other reasons involve the compromises to vessel stability when scrubbers, which can weigh 50-tonnes, are retrofitted. There is also the fact that they do not address the question of pollutant disposal and that there are few willing to deal with the effluent produced, with the ports as reluctant as most. Plus there are records of fires aboard vessels that have adopted the technology.
The industry is highly unlikely to have the resources, technology or infrastructure in place should liquefied natural gas (LNG) become a real option. In the first place that would require completely new ships as current fleets cannot be retrofitted to use LNG. Sturgeon said the sudden demand for LNG would likely be too great, making the decision to invest, even if it was possible on the requisite scale in the current European climate, a courageous and perhaps foolhardy one.
Citing a meeting last year with European commissioner for the Environment, Janez Potocnik, in which a vessel operator was asked why they weren't investing in LNG, Sturgeon said it was transparently difficult to invest millions of dollars in ships to run on LNG when the infrastructure isn't there to support it.
"That sort of approach is rather naive," he said. "They should be doing everything they can to make sure the solutions are there for the industry to use but they seem to be completely ignoring that element."
Finally, the prospect of removing the sulphur at the point of refining at the factory seems as distant as it was when it was mentioned last year at the Gothenburg meeting.
"At the moment the view is that the industry has not identified an immediate solution," said Baldissara.
The avenues sought for a compromise by the ECG have been numerous, including meetings with everyone from the Potocnik and European Commission’s vice president of Transport, Siim Kallas, to the French, Finnish and UK governments; none of them have had much success said Baldissara. However, he did say that certain members of the ECG had become members of the IMO, providing them with a direct line to ongoing discussions.
However, negotiation with the European Commission is proving a frustrating business on the sulphur question and the tools needed to deal with operating vessels under the new restrictions.
"It's all very well everyone in Brussels putting up their hands and saying 'it wasn't us, it was the IMO' or 'member states have voted and all we have done is implemented it'," said an exasperated Sturgeon. "That is all fine but there was talk of a toolbox. That toolbox is empty today and it shows every sign of staying empty right up until January 2015."
