- 21st September 2017
New technology needed for changing environmental regulations in the shipping industry
Environmental and shipping regulations are constantly changing, leaving ship owners and operators in a constant battle to keep up with new environmental regulations.
Since the International Maritime Organisation announced a global sulphur cap of 0.5% on marine fuels starting in 2020, the shipping industry now desperately seeks new technologies to reduce their emissions.
This decision has huge repercussions as the current cost of compliant low sulphur fuel is currently about 50% less than residual fuel.
Due to the scale and nature of the global switch, it has been mentioned that oil refiners may struggle to supply sufficient quantities of 0.5% sulphur fuel specifically for marine use. Because of this, the price of low sulphur fuel is expected to increase to around US$400 a tonne (still short of the 2014 peak) as the demand rises.
This has left the shipping industry in desperate need of new technology to change the way shipping vessels consume fuel.
There are now several exhibitions around the world such as Europort, showcasing these technologies and new vessels that run on alternative fuels.
But what about the current ships in circulation?
The new legislation is resulting in a worldwide scrapping of exceptionally expensive – fairly new shipping vessels. Which in turn, is also extremely damaging to the environment.
“In 2016 we scrapped a 2010-built vessel, when I started in the ship dismantling industry about 20 years ago, the average age of vessels used to be 30 years. Now, we are regularly scrapping ships that are 10 or 15 years old.” Jamie Dalzell, GMS.
2017 saw the scrapping of the container ship Hammonia Grenada, which was purchased in 2010 for $60m (approx. £37m at the time). The owners received just $5.5m (£4.4m).
In attempting to keep up with new legislation, some shipping companies have collapsed as a result of debt incurred. This poses the question, what is the carbon footprint of manufacturing new ships and what is ultimately best for the environment?