For the last twelve years I have been talking about sulphur emissions and their impact on the shipping industry. For the majority of that time it has been a specialised topic which has been far from the national consciousness and of interest really only to those directly affected.
The 1st of January 2015 is now merely days away and the thing I have been banging on about all these years is actually going to happen. In the New Year, ships operating within Emissions Control Areas (ECA) are going to have to either switch to Marine Gas Oil (MGO), switch to LNG or fit exhaust gas scrubbers.
As a result the subject has actually found its way into the national newspapers. On the 1st of December the Daily Mail reported that “Green Rules Slap £50 on a family ferry ticket to France: EU diktat will force prices up in weeks”. The price increase is obviously driven by the requirement to consume MGO which trades at about US$300 per ton above the fuel currently used. This differential has remained fairly constant despite the recent fall in oil prices.
Not unsurprisingly, shipwoners are looking at means of mitigating the cost increases and many are either in the process of fitting or ordering exhaust gas scrubbers. Scrubbers will allow ships to continue to consume the Heavy Fuel Oil (HFO) they currently use and still meet the sulphur emissions requirements. They do, of course, require capital investment and time to fit, but it is disappointing to see how the scale of this has been exaggerated by some commentators; one suggesting that the scrubbers “usually cost more than the ship itself”, which is clearly risible. The capital investment pay back on scrubber installations is usually less than two years and this is clearly proven by the numbers of installations and orders reported.
At first glance it may be hard to see the connection between this issue and that which was reported in Autocar this week – “France plans diesel engine cull in fight over pollution”, but it is there. France is seeking to reduce the number of private diesel vehicles on its roads because of the damage to human health caused by the small particulates in diesel exhaust emissions. The French government has described the tax incentives to get its drivers into diesel as a “mistake which must be rectified pragmatically”. The direct link from this to the shipping industry is that the MGO that ships will be switching to in ECA to comply with emissions legislation is actually the same refinery stream as diesel, its particulate emissions are equally harmful to human health.
This further strengthens the case for installing scrubbers as they remove ~80% of the particulate emissions from exhausts and the particulates from HFO are also less harmful to human health.
The whole issue of environmental compliance is complex, in trying to do the right thing the wrong environmental outcome can happen. For shipowners, already busy with ensuring the myriad of safety, operational and commercial imperatives are met it is challenging to see the global picture and make the right choice, equally, inactivity is damaging both commercially and environmentally. We at Oceanox seek to work with shipowners to provide the resources and expertise to guide them through the challenges and arrive at the right environmental, operational and commercial solution.