COLUMN | Rushed moves to deal with SOx emissions will prove costly [Ferry Tales]

In January 2015, new International Maritime Organisation and European Union regulations will require shipowners in northern Europe to use a marine fuel that has a sulphur content of less than 0.1 per cent. A United Kingdom Chamber of Shipping report, commissioned on behalf of several of the UK’s North Sea and Western Channel shipping operators, is the first of its kind to examine the full impact of the new regulations.

The report suggests that, as a result of the regulations, much more freight would be moved by road, leading to increased carbon emissions, shipping route closures, job losses, and increased road congestion. The cost of road diesel would increase by 2.8p per litre (US$0.42), and freight and passenger prices on vessels will rise, in some cases by up to 29 per cent.

The root of the problem comes in the cost – financial and environmental – of low-sulphur fuel. Shipowners have three options:

• Use low sulphur fuel – which would cost at least USD300 per tonne more than the current heavy fuel oil
• Fit a sulphur “scrubber” to their ships – yet this technology to reduce sulphur from heavy fuel oil on board the ship itself is not yet sufficiently proven for ship owners to fit them with confidence before the 2015 targets
• Use liquefied natural gas (LNG) as fuel – feasible for new build ships but not appropriate for most of the existing UK fleet.

The Chamber and the operators have no problem agreeing that there is a clear and unequivocal need to reduce sulphur emissions from shipping for both environmental and health reasons. However, the speed at which shipping operators would be required to meet reduction targets, at huge cost, without sufficient technology in place to support the changes, along with the failure to date for these targets to take account of the overall need to reduce carbon emissions has been causing ship operators great concern for some time.

In a recent conversation, Stena Line chief executive Dan Sten Olsson, a vocal critic of the proposed regulations, told me that although LNG is relatively inexpensive, the total cost is very high due to necessary bunkering infrastructure, plus the large conversion costs of existing vessels. “MDO is a fuel that meets the requirement for sulphur content lower than 0.1 per cent. However, MDO is about 40 per cent more expensive than (the current fuel) HFO,” Mr Olsson explained.

On the subject of scrubbers he is rightly dismissive – marine versions of scrubbing technology are in their infancy. The other option, building new ships, is impossible as his large fleet already consists of a number of vessels less than ten years old.

Interestingly, Stena is looking towards methanol as a possible solution and a trial is currently being carried out on Gothenburg-Frederikshavn train ferry Stena Scanrail.  Depending on the outcome, it is planned to convert the frontline passenger Ro-Ro Stena Germanica in the first half of 2014. However, if some ferry routes are to remain in business then exemptions from the rules, or deadline extensions, are a must.

The Chamber is pushing for some routes to be exempt from the 2015 deadlines, at least until January 1, 2020, from when shipping operating outside an emission-control area will also be subject to an emission drop. Other national shipowners’ associations, including those in Denmark and France, have also spoken out about the need for some routes to be exempt from the 2015 deadline. The problem facing the shipowning organisations will be to convince national political leaders to agree to their concerns and to then propose, both at the IMO and in Brussels, to allow exemptions.

The Chamber’s report provides some interesting views on the impact of the 2015 target:

The cost of the meeting the 2015 target – financial and employment
For those that cannot yet use LNG, or are not willing to invest in as-yet unproven scrubber technology, the impact of the low sulphur fuel cost is huge. To cope with the major increase, operators of ferry routes around the UK would need to increase ticket prices – by up to 20 per cent for passengers and up to 29 per cent for freight.
This will threaten the viability of some routes, forcing them to reduce or even shut down altogether. In turn, this would threaten more than 2,000 jobs – related to those routes – in the UK and Europe in maritime engineering, navigation, catering, customer services, cleaning and administration.
If vital trade routes are closed, the impact would be felt throughout the manufacturing sectors too as the cost of moving goods will increase – making the UK a less competitive and more expensive place to base internationally owned businesses.

The cost of meeting the 2015 target – environmental
Increased ticket prices for sea passage in turn could lead to a significant shift in the way freight is transported – a move to shorter sea passage and increased transport by road. Shipping is the lowest carbon form of mass transport, so a shift to greater road freight also has an environmental cost in terms of increased carbon emissions.
Similarly, both the refining process needed to create low sulphur fuel and the power needed to run on board sulphur scrubbers have their own cost in terms of carbon emissions.

David Balston, Director of Safety and Environment at the UK Chamber of Shipping, said: “We fully support the need to reduce sulphur emissions from ships – but we are particularly concerned that many routes will become non viable and for those vessels operating on them we seek transitional arrangements, including very tight time limited exemptions to allow technology to catch up and provide a realistic alternative.

“We must protect our maritime jobs and the environment – this report shows these regulations do neither.”

Hong Kong hears of panic before ferry collision

The inquiry into the Hong Kong ferry collision that cost 39 lives on the night of October 1, 2012, has heard that late action taken by the skipper of the Sea Smooth was an act of “last-minute panic” rather than a conscious attempt at averting a collision.

Marine safety executive Captain Nigel Pryke appeared after hearing evidence from the coxswains of both vessels involved in the collision.

“I think the action taken [by Sea Smooth coxswain Lai Sai-ming] was just so late that it wasn’t a practical collision-avoidance action. It was just a last minute panic,” he said.

Lai earlier said he had made a starboard turn to avoid colliding with Lamma IV.

However, Captain Pryke, himself a former English Channel ferry master before moving ashore in safety roles with some of Europe’s leading ferry operators, said he maintained the view expressed in his first expert report, that Lai had made a wrong turn to port side – which he described as a “fatal manoeuvre”.

The Lamma IV’s skipper, Chow Chi-wai, said earlier that he made full turn to starboard about 30 seconds before the collision with the Sea Smooth. But Pryke, a commission appointed expert, said it was just seven seconds before the crash.

Captain Pryke also criticised the owner of the Lamma IV, Hongkong Electric, for deploying an employee, Lai Ho-yin, who had no maritime experience, to make up the crew of four, as required by Marine Department. He said this was “totally unacceptable”. The commission heard earlier that Lai Ho-yin took three lifebuoys and jumped from the Lamma IV as it sank.

The design of the Sea Smooth’s wheelhouse was also criticised for placing the radar on the right hand side of the conning chair, instead of in front of it. The practice of the ferry’s crew to casually sit around the wheelhouse was, Captain Pryke said, “outrageous” and “ridiculous”.

He said one crew member should have been designated to sit beside the captain to help with the lookout. In his second expert report, Pryke outlined a series of suggested improvements to harbour management and safety appliances. He said more training was required for ferry crews, especially on radar use.

“It is striking that both coxswains involved seemed to be unaware of the high degree of attention required when vessels are approaching each other at high speed,” he said.

He also proposed that vessels carrying more than 100 passengers should be equipped with radars and VHF radio to communicate with the Marine Department. Their crew should also participate in the vessel traffic system so they would be alerted to collision risks. After meetings with the Marine Department, he said it was reviewing ferries’ manning level and crew qualification requirements.