fleetMaritime: IRISH SHIPPING & FREIGHT
MARITIME I | 43
Compiled by Howard Knott Edited by Jarlath Sweeney email: maritime@fleet.ie
Volume 10, No. 1 SPRING 2015
The SECA becomes a reality
T
he Sulphur Emission Control Area (SECA) covering waters in the English Channel, North Sea and Baltic has become a reality as of 1 January 2015. Under the terms of the EU Sulphur Control Directive 2012/33, vessels operating in these areas can use bunker fuel oil containing a maximum of 0.1% sulphur or continue to use Heavy Fuel Oil with exhaust emission scrubbers that enable them to achieve the required emission level. Similar rules also apply in the areas up to 200 miles off the North American coastlines. The Irish Sea and other EU waters will be made subject to similar controls in 2020 while the International Maritime Organisation (IMO) with whom the EU Authorities are now complying, is seeking to secure further pollution reductions from maritime activity in future years.
funds in seeking to develop a heavy fuel oil that burned with low sulphur emissions, it is not yet clear that this can be achieved. If not, then the refiners have a major problem as the market for the heavy fuel oil fraction of their output will drop away while that for the more refined product will grow. This will make the price difference in the marketplace even larger. CMA CGM Marco Polo in Port kelang
For Irish exporters and importers using surface transport, there is no escaping the Le Havre Port inevitable surcharges that the shipping companies will impose to cover the Oil there is USD 586, down from over USD 900 additional cost of use of low sulphur fuel and/or a year earlier. If there is a “good news” element in to defray the cost of installation of exhaust scrubber this story it is that the overall fuel price drop has systems on their vessels. In cases where the vessel seen a significant drop in Bunker Adjustment carrying the goods operates entirely outside the Factor (BAF) that had become a significant part SECA area, whether to Britain, the Biscay region, or of the overall shipping cost. Even though a typical West Africa, it would appear that there will be a five SECA surcharge on a 45ft container ex-Irish port year surcharge free period. However, if the vessel to Rotterdam is of the order of €62.30, this will be concerned enters the SECA area en route, if only partly offset by a reduction in BAF from that paid for a very short period, the surcharges will have to this time last year. apply as that vessel will have to use low-sulphur fuel for the total voyage because most short-sea vessels The effect of the SECA surcharge will also vary do not have more than one fuel tank. considerably depending on the door-to-door routing of the cargo. One trailer operator running In the latter months of 2014 there was considerable from Ireland to Italy is quoting a 2% SECA discussion in the shipping trade press of the likely surcharge. In this case the company will only be impact of the drop in oil prices on the SECA hit by the surcharge on the ferry running from, surcharge regime. The answer to this one appears say Dover to Calais. If, of course, the haulier runs to be that though the prices of both Heavy Fuel using the Rosslare-Cherbourg route the impact Oil and low-sulphur Marine Gas Oil have both will be considerably more. dropped by about 33% in the last year, their relative prices to each other have remained fairly constant. Even if the oil price continues to drop it is not Thus the current price (as of 11 December 2014) of IFO 380 Heavy Fuel Oil at Rotterdam stands at clear that SECA surcharges will remain as they USD 340 per metric tonne, down from about USD are at present. While Exxon, Chevron and other 580 a year earlier, and current price of Marine Gas oil majors have invested considerable energy and
In the medium to longer term, Liquefied Natural Gas (LNG) would appear to have great potential as a fuel for deepsea and short-sea vessels. It is a relatively low-cost and low-pollution fuel but, while new-build vessels can be fitted with engines that can run dual fuel or only on LNG, there are extra build costs. Two other problems emerge; first that storage of LNG aboard the vessel requires considerably more space than does fuel oil, second, that relatively few ports have LNG re-fuelling facilities. New EU funds are now being made available to enable ports to install such re-fuelling facilities. It is, perhaps, disappointing that Brittany Ferries has now decided not to proceed with the building of a new LNG powered ferry following the re-engining of some of its existing fleet. It has cited cost as the reason for its decision and its inability to secure State funding to cover that extra cost. The order cancellation will mean that the “Pont Aven”, which operates the company’s Cork-Roscoff seasonal route will remain as flagship for Brittany Ferries. Meanwhile the United Arab Shipping Company (UASC) has had the world’s first LNG ready ultralarge container vessel. The ‘Sajir’ has a 15,000 TEU capacity and is the first of a new fleet of ten sister ships and a further six of 18,000 TEU capacity. All have been designed to have a twenty five year commercial operating life. Stena Line has taken a different approach to all other operators and is currently converting its Gothenburg-Kiel ‘Stena Germanica’ ferry to operation using methanol, returning to service later in the spring. This vessel is of similar size to its ‘Stena Adventurer’ operating Dublin-Holyhead. This project is being undertaken in co-operation
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FREIGHT FERRY SERVICES FLEETMARITIME | SPRING 2015