Global regulations have an ever more significant effect on the cruise industry. With increased pressure on lines to run green and fuel efficient vessels at competitive prices, there has been a move across the market towards efficiency initiatives and the use of eco-technology. This article considers a number of ways the cruise industry has adapted to the changing regulatory landscape.
The regulatory background
As many will know, the shipping industry has seen the rise of regulations enforcing increasingly tight limits on emissions of nitrogen oxides (NOx), particulate matter and sulphur oxides (SOx) from fuel oil, combustion equipment and devices on board vessels (discussed in more detail in the last issue of this Bulletin: see “The bleak outlook of reduced sulphur emissions”, http://www.hfw.com/Cruise-Bulletin-June-2014). These emissions have been cited as having a significant negative impact on health and the environment.
To this end, the IMO’s Annex VI to the MARPOL 73/78 Convention (MARPOL Annex VI) has introduced maximum sulphur content limits for bunkers, as well as vessel engine NOx emissions limits. Even tighter emissions regulations are applicable within designated Emission Control Areas (ECAs) in the North Sea, Baltic Sea, North American coastline and US Caribbean, all of which include significant cruise market areas.
In an effort to reduce greenhouse gas emissions, MARPOL Annex VI has also brought vessel efficiency to the forefront of operators’ minds. Since 1 January 2013, all vessels over 400 GT have been obligated to take Ship Energy Efficiency Management Plan (SEEMP) audits, which detail ship-specific energy efficiency measures on board. Newbuilds after 1 January 2013 have also been required to conform to Energy Efficiency Design Index (EEDI) minimum efficiency standards.
Within this background, cruise operators have taken noticeable steps towards meeting, and exceeding, their obligations under global regulations. Several have taken the decision that enhancing their green credentials has both reputational and economic advantages.
Emission reduction technology and environmental awareness
Cruise lines are particularly affected by environmental issues, as the huge volumes of passengers on board combined with high speed cruising can lead to higher waste and emission production than other types of vessel.
Royal Caribbean’s efficiency initiative includes the use of common rail injection engines on two of their newer cruise ships, ALLURE OF THE SEAS and OASIS OF THE SEAS. This enables the vessels to improve their level of fuel efficiency as well as their diesel engine load control. In turn, this modification has also improved these vessels’ NOx emissions.
MSC Cruises have specifically focused on reducing their environmental impact. Each vessel in their fleet has a designated environmental officer, assisted by a shore-based environmental coordinator who is responsible for overseeing all environmental operations throughout the entire fleet1. As with other lines such as Norwegian and Paul Gaugin, this has resulted in more effective waste management on board each vessel, leading to an increase in recycling rates and a decrease in unnecessary waste incineration.
Scrubber technology uptake has increased amongst both cruise and non-cruise vessels, in line with tightening emission limits. Scrubbers, or exhaust gas cleaning systems, are considered one solution to reducing ships’ emissions of SOx, in place of using more expensive low-sulphur bunkers. Carnival have announced their intention to retrofit scrubbers on 32 vessels operating within the North American ECA.
In addition, Carnival are among several operators adopting “cold-ironing” practices while in Long Beach, California on both CARNIVAL INSPIRATION and CARNIVAL MIRACLE. Rather than running engines whilst idle in port, each vessel is connected to a shore-side electrical power source, allowing the vessel to turn off internal power sources and consequently avoid the use of bunkers. Princess Cruises have also taken up the initiative of “cold-ironing” when docking in Seattle, Juneau, Los Angeles and Vancouver, thereby utilising clean, local hydroelectricity. One further positive environmental effect of “cold-ironing” has been a reduction in noise and air pollution around the port.
Another example of lines’ efforts at increasing efficiency is the employment of new types of engines. Disney have introduced a newly-designed inward turning motor and an innovative twisted flap rudder onDISNEY DREAM. The effect of this has been a reduction of demand on the propulsion system, as well as an increase in fuel efficiency. By doing so, Disney have been able to reduce their outlay for bunkers, as well enhancing their brand image as “eco friendly”.
Silversea instead have employed a diesel-electric propulsion design which allows much of the engine power to shut down when power is in less demand, thereby reducing fuel usage and increasing operational efficiency. Fuel conservation has furthermore been increased on several vessels through energy efficient LED lighting, an increasing technology throughout the industry.
The trend towards employing energy- and emissions-efficient cruise vessels is expected to continue. Lines which have invested in recent eco-technologies and practices have benefited from fuel savings, as well as enjoyed a boost to their reputation for corporate responsibility – a key driver for consumer demand. Within the context of rising regulation and the need consistently to improve fuel efficiency – whilst catering for increasingly sophisticated consumer appetites – it appears sensible to expect the uptake of eco-solutions to maintain its upward trajectory.
Imminent application of sulphur emissions regulations in the UK
As we reported in our previous Bulletin, 2015 will see the regulatory regime concerning sulphur emissions tighten significantly in Emissions Control Areas (ECAs).2 Pursuant to MARPOL Annex VI, from 1 January 2015, vessels will be obliged to burn bunkers with maximum 0.1% sulphur content by mass within ECAs, down from the present limit of 1.0% sulphur content by mass. Operators will have the alternative option to fit vessels with emissions abatement technologies (such as scrubbers) in order to comply.
At the time of going to press, legislation detailing the enhanced restrictions has yet to be introduced in the UK. However, we have seen the draft statutory instrument currently tabled for consideration by Parliament.3 In summary, the draft instrument provides for amendments to current emissions and fuel regulations, which include the following new provisions:
- Duty of Master to inform the vessel’s flag state and the competent authority of the relevant port where it cannot purchase compliant bunkers.
- Fines for the use of non-approved emissions abatement technology.
- The obligation on the Secretary of State to review the impact and efficacy of the regulations at least once every five years.
- Duty of Master to record fuel changeover operations in vessel log books.
Little indication has been given in the text of the new regulations as to the severity of penalties on non-compliant vessels, although we expect there to be a range of fines, as well as the threat of vessel detention. We will continue to monitor the impact of the sulphur emissions regime and provide timely updates.