Is the sulphur cap 2020 one more abrupt and questionable “environmental” regulation?
This was the question being asked by many of the over 450 delegates at Greener Shipping Summit in Athens, November 13. Indeed, many questions were asked and many opinions expressed as the quality and the cost of the compliant fuels and the environmental impact of the open loop scrubbers proved serious points of concern.
But, as conference chairman Panos Kourkountis, technical director of the George Procopiou-backed Sea Traders, said "they are not the only ones". As was evident, "cheaper fuel and the premium on the charter rate of ships with scrubbers, will consequently lead to operation with increased speed and consumption and the proportional increase in emissions", said Kourkountis.
"These additional emissions related only to the cheaper fuel are expected to be similar for all type of scrubbers: open loop, close loop or hybrid," he said at the end of the summit during which some 28 presenters and panelists led a near nine-hour long debate on the impact of 2020.
The Greener Shipping Summit 2018, at the Eugenides Foundation, was organised by Newsfront / Naftiliaki in conjunction with, and under the auspices of, Greek shipping's technical body, the renowned Martecma. With representatives from 15 countries and some 251 companies and organisations in attendance the interaction was intense as industry leaders, classification societies shipping company executives, market analysts, bunker and ship brokers, manufacturers of environmental friendly ship's equipment and service providers, discussed the looming 2020.
George Gratsos, chairman of Helmepa, launched proceedings by looking at the impact of the regulations on shipping and the environment. In all, some 23 presentations were made providing delegates with plenty to talk about.
What was clear was there is no turning back as the impact of the forthcoming evolution in new shipping regulations and the challenges attached to complying with them was assessed.
"The constantly increased concerns regarding the negative impacts of the scrubbers on the environment are not the only risk that accompanies investment in scrubbers," noted Kourkountis. "The regulatory framework is blurry and still being elaborated. A very serious technical issue is the lack of proper performance standards. The makers of the scrubbers have the freedom to use a variety of materials and construction standards. Except for SOx levels there are no clear requirements on the other substances which are formed during the exhaust gas cleaning process and which are also emitted,” said Kourkountis.
Furthermore, there are no Imo approved scrubber systems. "We must remember the first BWTS, though Imo approved, are not in compliance with the latest Imo and USCG standards. We should not be surprised if the scrubbers have a similar fate," believes Kourkountis.
The role innovation is playing in the industry's future as well as how best, and what is available to enable ship operators to meet the regulatory requirements was debated as equipment manufacturers presented their solutions. It was often express that the regulators are the game changers and the shipping industry navigates in the uncertainty.
“The price, quality and availability of fuels, the complications and reliability of the scrubbers, the lack of performance standards, the environmental impact of the scrubbers, the position of local authorities and many more unknown factors make the 2020 issue as complicated as roulette or chaos theory. Investors must remember the roulette ball does not always stop where the money has been placed," concluded Kourkountis.
As John Cotzias, president of the Hellenic Shipbrokers Association (HSA), pointed out when talking about scrubber investment payback, "alternative and compliant fuels are likely to be utilised in smaller and of lower value vessels, whereas scrubbers will go on board larger vessels", but whatever the choice it will present a major challenge for ship operators and suppliers of compliant fuel and makers of equipment aimed at cutting emissions from ships.
Given also that scrubbers penetration can not exceed levels which are already well-known, Cotzias said "it appears LS blends will be the immediate solution of the marine fuel market". As he and many others pointed out this involves addressing fuel quality and blend consistency as well as physical availability in quantities and localities. "There will be volatility and uncertainty in both supply and demand for fuel," said Cotzias.
He drew on public statements like: "We believe ships should switch fuels rather than install scrubbers. It is better to produce cleaner fuel rather than clean up the fuel in the ship."
Manos Migadis, newbuilding manager Dynacom Tankers believes that by 2025 LSFO demand should be comfortably met by refineries providing good quality fuels at normal prices, therefore running on HSFO with SOx scrubbers might be disadvantageous. While he agreed LNG as fuel is a good solution there are risks associated which have to be addressed, in order for the long safety record of LNG carriers to be maintained in vessels involved in LNG in the fuel chain.
Migadis said slow steaming is a simple solution to mitigate the impact of the global sulphur cap on shipping and the world’s economy during first years of its implementation.\
Antonis Trakakis, chief technical officer of Arista Shipping-backed project Forward Shipping said in seeking alternative fuels LNG and LPG are the most prominent future candidates. LNG has historically much lower and quite less volatile price and is the most cost effective fuel to be produced in carbon neutral form, through carbon capture technologies. He said studies and calculations of Project Forward have demonstrated a fuel mix of fossil and carbon neutral methane can easily reach even the most ambitious targets of Imo.
Classification societies were called on to take a bigger role in the formulating of legislation, rather than just enforcing compliance with the regulations when they come into force.
There was general agreement that shipping's logistic chain has to be looked at in general and that there is great need for the industry to improve lobbying
Delegate Yanna Pavlopoulou, managing partner of Common Lawgic a sustainability research institute said "the industry needs better lobbying in the EU and the UN, not only at Imo". She said shipping generally should have the right to call on class societies as well as organisations like the Union of Greek Shipowners (UGS) in this lobbying effort beyond Imo".
The issue was raised during a panel discussion on NOx, SOx CO2 and PM which featured speakers from five classification societies. Shipowner panelist, Stavros Hatzigrigoris, md of Maran Gas Maritime, and chairman of Martecma, commented that "class should go beyond saying what shipping should do and should work hand-in-hand with us to save the planet". "Classification societies should fight with us," he declared.
John Kokarakis, technology and business development director HBSA zone, Bureau Veritas, and chairman of Sname Greek Branch, pointed out classification societies "do not regulate, but do try to make the regulations work".