• ITVI.USA
    15,909.400
    -330.930
    -2%
  • OTLT.USA
    2.776
    0.014
    0.5%
  • OTRI.USA
    21.610
    -0.170
    -0.8%
  • OTVI.USA
    15,915.300
    -318.010
    -2%
  • TSTOPVRPM.ATLPHL
    3.520
    0.380
    12.1%
  • TSTOPVRPM.CHIATL
    2.960
    -0.660
    -18.2%
  • TSTOPVRPM.DALLAX
    1.610
    0.250
    18.4%
  • TSTOPVRPM.LAXDAL
    3.340
    -0.130
    -3.7%
  • TSTOPVRPM.PHLCHI
    2.100
    -0.250
    -10.6%
  • TSTOPVRPM.LAXSEA
    3.860
    -0.220
    -5.4%
  • WAIT.USA
    126.000
    -2.000
    -1.6%
  • ITVI.USA
    15,909.400
    -330.930
    -2%
  • OTLT.USA
    2.776
    0.014
    0.5%
  • OTRI.USA
    21.610
    -0.170
    -0.8%
  • OTVI.USA
    15,915.300
    -318.010
    -2%
  • TSTOPVRPM.ATLPHL
    3.520
    0.380
    12.1%
  • TSTOPVRPM.CHIATL
    2.960
    -0.660
    -18.2%
  • TSTOPVRPM.DALLAX
    1.610
    0.250
    18.4%
  • TSTOPVRPM.LAXDAL
    3.340
    -0.130
    -3.7%
  • TSTOPVRPM.PHLCHI
    2.100
    -0.250
    -10.6%
  • TSTOPVRPM.LAXSEA
    3.860
    -0.220
    -5.4%
  • WAIT.USA
    126.000
    -2.000
    -1.6%
American ShipperShippingTrade and Compliance

Scrubbing the need to burn low-sulfur fuel

   Balder, a self-unloading bulk carrier owned by the Norwegian shipping company Torvald Klaveness and managed by CSL, has become the first vessel to operate in the U.S. Emissions Control Area using a scrubber manufactured by Norway-based Clean Marine.
   Using the Exhaust Gas Cleaning System allows the ship to remove sulfur from exhaust and still use high sulfur fuel oil rather than burning more expensive, low sulfur fuel.
   Since 2010, ships operating in the North American Emissions
Control Area (ECA) – generally within 200 miles of the coast of the United States
and Canada (parts of northern Canada and Alaska are except from ECA) must
burn fuel with 1 percent sulfur (10,000 parts per million) content or have emissions with equivalent sulfur oxide (SOx) emissions. That requirement will get
even more restrictive, with sulfur content in fuel limited to 0.1 percent sulfur
in 2015 or equivalent emissions. Outside the ECA, today’s ships commonly burn fuel with 3.5 percent
sulfur content, but they will be required to use 0.5 percent sulfur fuel by 2020.
   Low-sulfur fuel is more expensive than regular bunker fuel. For example, according to the BunkerWorld.com Website on Wednesday, the cost in New York of high-sulfur IFO 380 fuel oil was $626.50 per ton, while low-sulfur IFO 380 fuel oil was $652.50 per ton. Eventually, in 2015, most ships are expected to use marine gas oil to meet the more restrictive standard, and it’s currently much more expensive – $1,010 per ton in New York on Wednesday, and prices could change dramatically when worldwide demand skyrockets.
   While most ships will meet the standard by switching to low-sulfur fuel, they can also use scrubbers to meet the emissions requirement, and apply to the U.S. Coast Guard for an equivalency letter.
   Some companies are beginning to talk about using LNG to meet the new pollution requirements, but use of scrubbers is not common. Lt. Commander Edgardo Cruz, chief of the Inspection Division at the Coast Guard’s Sector Baltimore, who conducted a port state control exam of the Clean Marine system on Aug. 29 in Baltimore, said he had not seen a scrubber on a ship previously.
   He said the Clean Marine system was found to be in compliance with the MARPOL Annex VI emission requirements for ships operating in the ECA and the company told him they plan to submit a request seeking a letter of equivalency from the Coast Guard.
   Clean Marine said its scrubber is certified by the classification society Det Norske Veritas and has been proven to reduce sulfur content to below 0.1 percent, so that the ship already complies with the much stricter 2015 emission regulations.
   Lasse Kristoffersen, chief executive officer at Klaveness, said while it may be hard to make the business case for installing the equipment today, it gives his firm the opportunity to evaluate the scrubber and advance the company’s environmental goals.
   “If this technology works and the ECA requirements are implemented as planned in 2015, where you have 0.1 percent, we will consider seriously running these out in the rest of the fleet trading in this area,” Kristoffersen said. 
   Pia Meling, sales and marketing manager for Clean Marine, said the equipment has been tested and shown to meet those 2015 standards.
   “There are a lot of shipowners that are interested in this, but a lot are also sitting on the fence and thinking we can look at this later,” she said. “There is about 6 months lead time from ordering a system until it is installed. We expect a lot more orders and interest going into next year.”
   Kristoffersen said the scrubber is particularly attractive for operating a ship like the Balder, which spends a great deal of time traveling within the ECA zone.
   “Ships coming in from Europe or the Far East, it is a very small percentage of the voyage that is in the ECA area, but these ships are more often trading within the Americas—Latin America, North America. Then they are 50-60 percent of the time in the ECA,” he said.
   For example, typical customers for Klaveness’ self-unloaders include steel mills, iron ore producers, coal importers and exporters, gypsum board producers and utilities, quarries and aggregate companies. The most common cargoes are stone, coal, iron ore, gypsum, petcoke and salt, though Kristoffersen said they carry coal from Colombia to the United States, as well as products such as aggregate from Canada to the United States.
   Meling said Clean Marine has only sold two units for new ships, both being built  by Samsung in South Korea for use as shuttle tankers that will be operated in the North Sea in the European ECA.
   She said companies that operate exclusively or largely in ECAs are more inclined to have an interest in scrubbers, but she noted globally the fuel standard will come down to 0.5 percent sulfur in 2020 and that will likely become broader.
   While the cost of a scrubber varies, Meling said the $2.5 million-to-$3 million cost of an installed system on a midsized ship could be offset by lower fuel costs in a year or two if it operates entirely within an ECA. – Chris Dupin

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.

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