Is ECA compliance too costly for ship owners and operators?

Tanker chartering expert Katerina Restis considers the issues surrounding emission control areas compliance for ship owners and operators in Intermodal's weekly market report
Is ECA compliance too costly for ship owners and operators?

The 1st of January 2015, as broadly reported, denoted the beginning date of new and progressive emission regulations for vessels operating within the sulphur Emission Control Areas (ECAs) particularly established for the control and minimisation of SOx and NOx emissions.

As per MARPOL Annex VI new guidelines, vessels are obliged to burn bunkers with a maximum of 0.10% sulphur content in the main, auxiliary engines and boilers, within the SECAs whereas up to December 2014, the sulphur content limit was no more than 1.00%. The ECAs presently cover the North Ocean, Baltic Ocean, North American coastline and US Caribbean. Furthermore, existing EU Law already requires ships whilst in EU ports to use fuels with 0.1% Sulphur content while at berth, unless they use shore-side electricity.

In order for vessels to comply with the new requirements, they need to switch to ultra-low sulphur fuel types and currently the most viable option seems to be Low Sulphur Marine Gas Oil (LSMGO). The changeover from HFO to LSMGO poses technical and operational challenges as the two fuels operate at a different temperature, in addition to increased risk of thermal shocks to machinery, as well as the difference in viscosity that needs to be considered in order to avoid fuel pump failures. Vessels may also comply with the SOx/NOx restrictions with the use of Exhaust Gas Cleaning Systems that “clean” the emissions before releasing them into the atmosphere, though it should be noted that the installation costs remain substantial.

Furthermore, SOx emissions from shipping may also be controlled with the use of alternative fuels, LNG or bio-fuels. It is indicated that LNG use as a marine fuel remains cheaper than MGO and stands as a better choice in terms of reserve to production ratio. Its use to propel ships represents a “green” alternative, with 0% sulphur content while when ignited has nearly zero oxide emissions. It does not affect the operational qualities of the vessel, though specialised training for crew members is essential. Wartsila, Rolls-Royce Marine, Mitsubishi and MAN are the main manufacturers of gas or dual fuel engines for ships. The technical, safety requirements and investment costs signify higher suitability for new-buildings.

At present, the most immediate difficulty is the limited available infrastructure for bunkering the aforesaid vessels. Moreover, bio-fuels are an alternative to lower carbon concentration in the propulsion of ships. For instance, biodiesel and vegetable oils can be used partly in diesel engines or as an alternative for HFO consumption. However, there is not sufficient practical experience and currently they are more expensive than oil products.

Head to Intermodal's website and sign up for the complete market report and a run down of each sector. 

Is ECA compliance too costly for ship owners and operators?

by Intermodal Shipbrokers

With more than 30 years of history, Intermodal Shipbrokers has established its position as one of the leading brooking houses both within Greece and internationally. Among its many services, the company produces market reports for the shipping industry.

Tracker Pixel for Entry

Sorry, commenting has been disabled for this entry.