Ready for tighter sulphur regulations

Every year, thousands of deaths are caused by maritime sulphur emissions. In order to combat this environmental threat, the International Maritime Organization (IMO) will drop fuel oil sulphur limits in Emission Control Areas (ECAs) to 0.1 per cent on 1 January 2015. Erik Nyheim, WWL Chief Commercial Officer, discusses the ramifications of the new regulations and how WWL will address this issue going forward.

What are some of the main challenges facing the shipping industry when it comes to these new regulations?

The introduction of stricter sulphur regulations will have a huge impact on the shipping industry. To comply with the new regulations we have to change the fuel that our vessels run on, which is a challenge technically and carries a big cost. Switching from bunker to Marine Gas Oil (MGO) is the only readily available solution, and that is 50 per cent more expensive than bunker fuel. Already today, bunker fuel makes up 45 per cent of operating costs for a vessel, so the cost impact on operations in ECA zones will be very noticeable.

But responsible shipping companies face another big risk due to the current lack of enforcement of regulations. Given the huge financial incentives, there is a temptation for less scrupulous operators to cut corners which can seriously distort competition.

That’s why we started the Trident Alliance: to reduce business risk for us and our customers. The main focus is on communication to raise awareness of the issue, supported by member companies’ transparency on compliance, as well as on initiatives to foster innovation in enforcement technology.

At WWL, we are determined to find the most sustainable solution for the customers, our vessels and the environment. Over time we envisage using a combination of solutions depending on vessel, routes and market developments. We don’t have the answers yet, therefore we are working on a broad scale, taking a four stream approach to examining potential solutions.

Can you elaborate on this four-stream approach?

The first stream is to use MGO now. The second is to work for a reliable supply of ultra-low sulphur bunker oil, a fuel that until recently did not exist. We have made good progress here. In recent sea trials, oil and gas giant ExxonMobil asked us to be their partner to test what has become the first fully approved Ultra Low Sulphur Fuel Oil. The third stream involves exhaust gas cleaning systems, or scrubbers, which we are testing on one of our vessels. These remove the sulphur from the vessels’ exhaust fumes and make it possible to keep running on normal bunker oil. And the fourth involves the use of alternative fuels, which, in the long term, include a wide range of options. Liquid natural gas, biofuels, fuel cells and a variety of other options are all being explored. But it will take time to get scale and efficiency at usable levels.

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