Scrubbers, ECA, and the cruise industry - Baltimore Post-Examiner

Posted - August 2, 2013 - By Marian Krueger - Baltimore Post-Examiner

Maybe, just maybe, these words altogether don’t have much meaning for you.  Maybe you like cruising and see these other words as well, uninteresting and downright boring.  But don’t kid yourself cruisers!  Scrubbers and the ECA will soon be a part of your cruise lingo.  Trust me on this one.

ECA (emissions controlled areas) are IMO (International Maritime Organization) regulations requiring use of low-sulfur fuels.  Why?  Set to become effective in 2015, all ships at sea will have to sail with fuel that has less than 0.1 percent sulfur in it.  But really… do you care?

Hybrid scrubber

The average person generally doesn’t care how much or how little sulfur is in their cruise ship’s fuel.  That’s not a condemnation of the public.  Instead, vacationers tend to be concerned about their trip as far as the cost, destination, etc.  They generally aren’t overly concerned about fair labor wages or clean fuel.  Prior to 2012, the world cap for marine fuel sulfur levels was steady at 4.5 percent, but was then reduced to 3.5 percent.  That 3.5 percent sulfur fuel would be the sludge or what was leftover from the bottom of the barrel from refineries.  The refineries were happy to have someone, anyone buying the leftover junk from the bottom of the barrel and my guess is that it was relatively inexpensive so vessels and their owners were getting a great deal.

That is until the United Nations Framework Convention on Climate Change, who also controls the IMO, decided that this was no longer a good idea.  Turns out that cheap bottom of the barrel fuel with the high sulfur content is yes, directly responsible for acid rain.  Therefore, sulfur content in fuel will go down from 3.5 percent to 1.5 percent, then 1 percent and then by 2015, down to a mere 0.1 percent.

Certain areas of the world are already using emission-controlled areas, such as the United States, Canada, the Baltic Sea, and the Mediterranean.  When ships come within 200 nautical miles of these areas coastlines, they are required to switch to low sulfur fuels.  Since they already have these on board, the question would then be why not use it all of the time?  Cost.  If they have to pay more for fuel, the cost has to be passed along somewhere.  It’s not only cruise ships that are using fuel, but cargo vessels, too.  Consumers always want better, but not necessarily more expensive.

That’s where scrubbers come into the story.  There are lots of ships sailing around the world at any given time, around 65,000.  These existing ships will need to be retrofitted with scrubbers to clean the fuel to make it compliant with the new regulation.  These scrubbers aren’t inexpensive at all – we’re talking a multi-million dollar investment per ship and many cruise lines these days own several, if not dozens, of ships.

Norwegian Cruise Line announced on July 18, 2013 via a press release on their website that two of their ships to be built for service and delivered in 2015 and 2017, the new two new Breakaway Plus class ships, will be the first new ship builds to have scrubbers.   New ships in anticipation of the 2015 deadline will have scrubbers onboard, but what about ships built prior to 2015 that are already in service?

Recently, SeaTrade Insider reported that Adam Goldstein, President and CEO of Royal Caribbean, testified in front of the Senate Committee cruise hearing, chaired by Sen. Jay Rockefeller.  Goldstein mentioned Royal Caribbean‘s testing of scrubbers by two manufacturers.

‘We are now pleased to be expanding this research project to additional vendors and to additional ships within our fleet, including Grandeur of the Seas,‘ Goldstein said.

After Carnival Cruise Line decided to pull the Carnival Pride out of Baltimore as well as the Carnival Glory out of Boston and Norfolk, it’s good news for Baltimore that Royal Caribbean is researching ways to have its cruise ships remain in port.   They are committed to keeping the Grandeur of the Seas in Baltimore until at least April 2015.

Sulfur Content marine fuels.

But don’t think that the new IMO regulations of low-sulfur fuels will be a done deal and over as of 2015.  It will take effect for European waters in 2020 and for the rest of the world in 2025.

Cleaner fuel is good for the environment and there is a price associated with that positive end result.  Although one might speculate that the cruise lines would chalk this up as a business expense in order to comply with the new regulations, I suspect that the price will eventually be passed onto the consumer.  What can you do?  Enjoy the low fares now because they probably won’t be this low for much longer.  However, the higher price will mean that you can rest assured knowing that you aren’t contributing to an environmental problem the next time you take a cruise.  Your children and their children will gladly thank you and the IMO for taking care of our planet
Maybe, just maybe, these words altogether don’t have much meaning for you.  Maybe you like cruising and see these other words as well, uninteresting and downright boring.  But don’t kid yourself cruisers!  Scrubbers and the ECA will soon be a part of your cruise lingo.  Trust me on this one.

ECA (emissions controlled areas) are IMO (International Maritime Organization) regulations requiring use of low-sulfur fuels.  Why?  Set to become effective in 2015, all ships at sea will have to sail with fuel that has less than 0.1 percent sulfur in it.  But really… do you care?

Hybrid scrubber

The average person generally doesn’t care how much or how little sulfur is in their cruise ship’s fuel.  That’s not a condemnation of the public.  Instead, vacationers tend to be concerned about their trip as far as the cost, destination, etc.  They generally aren’t overly concerned about fair labor wages or clean fuel.  Prior to 2012, the world cap for marine fuel sulfur levels was steady at 4.5 percent, but was then reduced to 3.5 percent.  That 3.5 percent sulfur fuel would be the sludge or what was leftover from the bottom of the barrel from refineries.  The refineries were happy to have someone, anyone buying the leftover junk from the bottom of the barrel and my guess is that it was relatively inexpensive so vessels and their owners were getting a great deal.
That is until the United Nations Framework Convention on Climate Change, who also controls the IMO, decided that this was no longer a good idea.  Turns out that cheap bottom of the barrel fuel with the high sulfur content is yes, directly responsible for acid rain.  Therefore, sulfur content in fuel will go down from 3.5 percent to 1.5 percent, then 1 percent and then by 2015, down to a mere 0.1 percent.

Certain areas of the world are already using emission-controlled areas, such as the United States, Canada, the Baltic Sea, and the Mediterranean.  When ships come within 200 nautical miles of these areas coastlines, they are required to switch to low sulfur fuels.  Since they already have these on board, the question would then be why not use it all of the time?  Cost.  If they have to pay more for fuel, the cost has to be passed along somewhere.  It’s not only cruise ships that are using fuel, but cargo vessels, too.  Consumers always want better, but not necessarily more expensive.
That’s where scrubbers come into the story.  There are lots of ships sailing around the world at any given time, around 65,000.  These existing ships will need to be retrofitted with scrubbers to clean the fuel to make it compliant with the new regulation.  These scrubbers aren’t inexpensive at all – we’re talking a multi-million dollar investment per ship and many cruise lines these days own several, if not dozens, of ships.
Norwegian Cruise Line announced on July 18, 2013 via a press release on their website that two of their ships to be built for service and delivered in 2015 and 2017, the new two new Breakaway Plus class ships, will be the first new ship builds to have scrubbers.   New ships in anticipation of the 2015 deadline will have scrubbers onboard, but what about ships built prior to 2015 that are already in service?
Recently, SeaTrade Insider reported that Adam Goldstein, President and CEO of Royal Caribbean, testified in front of the Senate Committee cruise hearing, chaired by Sen. Jay Rockefeller.  Goldstein mentioned Royal Caribbean‘s testing of scrubbers by two manufacturers.
‘We are now pleased to be expanding this research project to additional vendors and to additional ships within our fleet, including Grandeur of the Seas,‘ Goldstein said.
After Carnival Cruise Line decided to pull the Carnival Pride out of Baltimore as well as the Carnival Glory out of Boston and Norfolk, it’s good news for Baltimore that Royal Caribbean is researching ways to have its cruise ships remain in port.   They are committed to keeping the Grandeur of the Seas in Baltimore until at least April 2015.

Sulfur Content marine fuels.

But don’t think that the new IMO regulations of low-sulfur fuels will be a done deal and over as of 2015.  It will take effect for European waters in 2020 and for the rest of the world in 2025.
Cleaner fuel is good for the environment and there is a price associated with that positive end result.  Although one might speculate that the cruise lines would chalk this up as a business expense in order to comply with the new regulations, I suspect that the price will eventually be passed onto the consumer.  What can you do?  Enjoy the low fares now because they probably won’t be this low for much longer.  However, the higher price will mean that you can rest assured knowing that you aren’t contributing to an environmental problem the next time you take a cruise.  Your children and their children will gladly thank you and the IMO for taking care of our planet.
- See more at: http://baltimorepostexaminer.com/scrubbers-eca-and-the-cruise-industry/2013/08/02#sthash.O8LxgWrw.dpuf

 Marian Krueger · August 2, 2013

August 2, 2013

August 2, 2013

Post to be found at:
http://baltimorepostexaminer.com/scrubbers-eca-and-the-cruise-industry/2013/08/02