“Green” approach to the blue sea

Less than four months is left till new restrictions on sulphur content in marine fuel come into effect. Ship owners, bunker suppliers and shipbuilders are preparing for changes in the market. 

From January 1, 2015 sulphur content in ship bunker should not exceed 0.1% in Emission Control Areas (ECAs) including the Baltic Sea and the North Sea which are directly relevant to the North West Basin of Russia playing a key role in the foreign trade activities. 

Such a radical toughening of environmental standards requires a comprehensive approach to bunker fuel industry, shipbuilding and shipping company’s business.

Bunkering

Disregarding exotic fuels promising no mass use (bio fuel, nuclear energy etc.) major alternatives to heavy fuel oil (which does not comply with new requirements on sulphur content) are distillates and liquefied natural gas (LNG). Many players of shipping and bunkering markets believe that the expansion of diesel fuel as bunker will become one of the most widespread responses to the updated environmental requirements during the first years following their introduction. However, this variant is not a panacea as it means considerable increase of operational costs but does not comply with the future requirements on NOx emissions. As of today, NOx Emission Control Area includes the coasts of Canada and the United States as well as the Caribbean Sea. Tougher requirements will be applied to vessels laid down from January 1, 2016. However, the Baltic Sea and the North Sea are under consideration. In this case, vessels powered by diesel fuel will have to be equipped with selective catalytic reaction devices and soot collectors entailing the expected results.

Liquefied natural gas seems to have more remote prospects as it requires the development of costly infrastructure for production and bunkering as well as construction of vessels equipped with special engines and fuel system (the conversion of earlier built vessels is not economically reasonable in most cases).

Meanwhile, there are solutions allowing bunkering of vessels with LNG through moderate investments. For example, Krylov State Research Center suggests bunkering from barges able take aboard truck trailers with LNG. It will let save on coast infrastructure and on construction of specialized bunkering tankers. Besides, out-of-dated regulations on construction of LNG storage facilities can be “avoided”. Read more about Krylov Center proposals in the new edition of “Port Service. Bunkering market.” journal  >>>> 

Besides, new types of fuel appear in the niche between heavy fuel oil and distillates. The launch of such a fuel complying with the new requirements has been recently announced by  LUKOIL-BUNKER LLC >>>> 

Shipbuilding

As was stated above, the use of LNG as a marine fuel requires the construction of new dedicated vessels but LNG market and bunkering infrastructure have not been developed yet. In this context, DNV has introduced LNG-Ready class notation. Such vessels can be bunkered with conventional fuels. If necessary, they can be quite easily equipped with LNG fuel system as special preparations had been made for it in advance.

Another alternative is the installation of scrubbers so that heavy fuel oil could be used in ECAs. As we have learnt from the line operators in the Baltic Sea, many of them prefer this option. Actually, it has some disadvantages and cannot be a solution for all routes and vessels. Scrubbers are quite heavy, expensive and should be placed rather high which influences the ship stability and that is a problem, for boxships in particular. Besides, toxic substances unfriendly for construction materials should be held onboard.

Shipping

The option to meet new requirements for ECAs will depend on specific characteristics and type of each vessel, routes, ports of call, business processes of operators and ship owners. Tramp shipping is likely to face more challenges as it is more difficult to schedule it as compared with line shipping. 

Also, a very important factor is whether the ship is to go beyond ECAs.

Anyway, tougher requirements cannot but lead to ship owners’ expenses and consequently to deterioration of sea transport competitiveness. To preserve their positions, shipping companies will have to reduce costs and improve efficiency of their business processes. For example, Stena Line is going to use low sulphur fuel and minimize costs having improved the efficiency of ferry links. Read more about it in the interview with Aivars Taurins, Regional Director of Stena Line in Russia, the Baltic States and the CIS, >>>> 

Bunkering companies will have to conform to new “rules” through the use of new solutions and investments into infrastructure modernization.

Meanwhile, shipbuilders and service companies are likely to gain advantage from this situation if they offer new efficient solutions.

Read more about strengthening of requirements on marine fuel and possible impact in the new edition of “Port Service. Bunkering market.” journal  >>>> 


Vitaly Chernov