By Sascha Matuszak
The world’s largest cruise operator, Carnival Cruise, has committed to a new line of cruise ships powered by liquefied natural gas (LNG), considered to be the cleanest burning hydrocarbon available, a little under two years ahead of the deadline for the implementation of a new global sulfur cap on marine fuels. With the AIDAnova, Carnival hopes to set the tone for a new fleet of vessels that are both beautifully designed, environmentally safe, and compliant with the new global sulfur cap rules.
The cap was announced in 2016 by the United Nation’s International Maritime Organization (IMO), and will reduce the allowable amount of sulfur in marine fuels to 0.5 percent m/m (mass by mass) down from the current 3.5 percent m/m. The sharp reduction will have a great impact throughout the global shipping, supply chains and energy industries, as well as on the prices of diesel, jet fuel, and petrol. The global sulfur cap came after decades of study and several additions made to Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL), which went into force in 2005. Annex VI calls for IMO member states to create regulations to reduce polluting airborne emissions from ships, including sulfur oxides, nitrogen oxides, ozone-depleting substances and volatile organic compounds.
The cap on sulfur in marine fuels applies to all shipping, not just cruise ships. Global shipping companies such as Maersk expect the new rules to increase fuel costs substantially, as shippers are forced to seek cleaner, more efficient, and more expensive sources of fuel. The ability for the shipping industry to comply with the new standard rests on the availability and price of higher quality marine fuel. Two separate studies, one by Ensys Energy & Systems, Inc. and the other by CE Delft, paint very different pictures of fuel availability at the implementation deadline for sulfur reduction. Ensys foresees dramatic price increases and constrained demand, whereas CE Delft predicts not only enough fuel to meet demand, but affordable prices and innovative solutions.
According to the IMO, when it comes to fuel availability, “the regulation requires each Party to ‘take all reasonable steps to promote the availability of fuel oils which comply with this Annex and inform the Organization of the availability of compliant fuel oils in its ports and terminals.’” Refineries will have to produce much more LNG and be able to provide the fuel in an efficient manner in order for the industry to avoid substantial cost increases.
“One of the keys to establishing LNG as a standard for powering cruise ships is building out an extensive, safe and reliable infrastructure across the globe for this clean-burning fossil fuel,” said Tom Strang, senior vice president of maritime affairs for Carnival Corporation. “We are proud to be on the forefront of advancing LNG as a fuel source for the cruise industry.”
For compliance officers, the question of fuel availability is just as critical. The IMO has protocols in place for ships to declare and demonstrate their inability to comply due to the unavailability of fuel, but exactly how that process will work is still under review. The regulatory framework provided by MARPOL is also subject to member state enforcement and will vary depending on region. For example, ships traveling through MARPOL-deemed “Emission Control Areas” must comply with a sulfur limit of 0.1 percent m/m; therefore, ships will have to contend with a 0.5 percent standard for much of the world and a 0.1 percent standard for several Emission Control Areas, such as the Baltic Sea, the North Sea, the coastal areas of the United States and Canada, and the Caribbean Sea area within U.S. territory.
The IMO Sub-Committee on Pollution Prevention and Response is currently in the process of reviewing studies on fuel capacity, which should be completed in the second half of 2019.
The committee is also considering several other points, including:
- The preparatory and transitional issues that may arise with a shift from the 3.5% m/m sulfur limit to the new 0.5% m/m limit; the impact on fuel and machinery systems.
- How to ensure compliance and consistent implementation; a standardized system for reporting fuel oil non-availability.
- Developing guidance to assist Member States and stakeholders in assessing the sulfur content of fuel oil delivered for use on board ship.
- Developing an [International Organization for Standardization] standard for fuels.
- Any consequential regulatory amendments and/or guidelines necessary to address issues raised or otherwise considered necessary to ensure consistent implementation of regulation 14.1.3 of MARPOL Annex VI.
The resolutions to these questions will determine how IMO member states and their affected industries respond to the new regulation, particularly the refining sectors. Member states are obligated to implement and enforce the new standard within their waters, and sanctions for noncompliance depend on the regulatory body that holds jurisdiction over the region or port where the offending ship is located.