How apt that January is named after the Roman God of gateways, of beginnings and endings and of transition. As 2016 draws to a close, this is one year where we can surely look back at a momentous decision for shipping and look ahead to what must happen next.
In October IMO made the only correct and sensible decision. No delays – from 2020 the global limit on marine fuel sulphur outside of ECA’s will be 0.50%. Ships will still be able to use higher sulphur fuel with an approved exhaust gas cleaning system, provided that the reduction in SOx emissions is at least as effective as the new sulphur cap.
So, is that job done?
Action plans needed
For ship operators and refiners 2020 is not at all far away, so action plans must be put in place now. IMO’s Marine Environment Protection Committee has also tasked its next sub-committee meeting with developing a work plan to ensure a smooth implementation. EGCSA and its members are ready and able to take full part in these preparations.
EGCSA strongly believes that communication, transparency and co-operation between all stakeholders will ease the changeover process. After some 350 ship installations, scrubbing is now well established and can no longer be considered a new technology. Needless to say, technology and regulatory development is ongoing – in reality it does not stop and there is always a need to build on experience.
With this in mind, EGCSA has just held its second workshop in 2016. Members, associate members and a number of guests received presentations from marine industry stakeholders outside of the Association. These provided an ideal platform for discussion on the ship-owner’s perspective of scrubbing, scrubbers and the environment and the refinery and fuel suppliers’ view of 2020.
Future fuel price reality
With significant overcapacity, low freight rates and poor vessel values, many sectors of the shipping industry have faced a very tough time of late. It is therefore unsurprising that financial uncertainty was one of the themes of discussion.
EGCSA’s view is that the future price realities of low sulphur fuel should not be underestimated and that it is vital that ship operators carefully evaluate all the various payback scenarios when considering how to comply. Although using low sulphur fuel may seem the obvious choice, it could easily render a vessel uncompetitive at the price differentials expected in 2020 and the easy option may well not be the best.
Washwater and “grandfathering”
Working in partnership with Euroshore, the association of European port reception facility providers, EGCSA has been taking a science based approach to another topic of discussion – the quality of scrubber washwater discharges. A second washwater sampling programme is currently underway for the European Sustainable Shipping Forum, to address the type, source and concentration of material discharged overboard.
The results of laboratory analysis are available for both the European Commission and IMO. It is reassuring that if the washwater discharge criteria were to be revised there is a waiver in the Exhaust Gas Cleaning System Guidelines for those early adopters who have taken part.
The founders of EGCSA have been involved with air pollution regulators from the early days of allowing abatement technologies as an alternative to limiting fuel sulphur. While international and regional environmental regulations are constantly evolving, this is a pointer to the way issues such as “grandfathering” can be handled when working collectively and EGCSA will continue to be proactive with its guidance, administrator liaison and technical effort.
To date no samples have exceeded IMO’s limits on polycyclic aromatic hydrocarbons (PAH) – an indicator of oil content and analyses have shown the concentrations of these substances to be up to 30 times less than in produced water discharges from oil and gas production platforms. It is also becoming apparent that in the low concentration of metals that has been detected so far a number of materials are likely to be from the ship itself (e.g. from anti-corrosion anodes) rather than from exhaust gas cleaning.
Knowledge and data rather than rhetoric
The aim of the sampling programmes is to enable a clear and even application of scrubber discharge rules across Europe and where open and closed loop scrubbers can be used. Residual fuel and scrubbers can be the most cost effective and environmentally sustainable method of SOx compliance and EGCSA will use knowledge and data rather than rhetoric to answer questions and explain the benefits.
A study by Dr Gustav Krantz of Trans Oleum AB is an excellent example of work that takes a holistic view of increased CO2 emissions linked to distillate fuel production. The paper and supporting presentation discuss how incentives to use scrubbers in the marine industry could significantly reduce overall CO2 emissions and could be compatible with the European Emissions Trading Scheme (ETS).
Emissions trading may not be top of a ship-owner’s priority list at the moment. However, take note – the European Parliament’s Environment Committee has just voted for the inclusion of maritime transport in the EU ETS from 2023 if IMO does not deliver a global solution by 2021. This has not gone unnoticed by the International Chamber of Shipping!
Scrubbers offer the only alternative to compliance by fuel; not only controlling SOx but also particulate emissions. EGCSA members have the capacity and resources to meet demand, market conditions are favourable and we have had the green light from IMO for 2020.
It is now investment decision time and this is an opportunity for ship-owners.
Come talk with us – we are here to explain the options so the best decisions can be made as soon as possible.
Have a happy and peaceful Christmas holiday, we wish you every success in the year ahead.
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