Higher fuel bills will cut ship emissions

Higher bunker fuel bills will act as a driver to cut ship emissions, as efficiency gains when bunker prices are high result in substantial cost savings for shipowners. The greater the gains in efficiency, the lower a ship’s fuel consumption, and the lower its emissions.

New global regulations on fuel sulphur content will push increased consumption of low-sulphur distillate fuels. Sulphur emission control areas (SOx-ECAs) are already in place in northern Europe (the Baltic Sea and the North Sea) and will soon be so in North America (up to 200 nautical miles from the coast). SOx-ECA requires fuel below 1.00% sulphur from July 2010 (in North America from August 2012) and below 0.10% from January 2015. The global fuel sulphur limit is currently 4.50%, to be lowered to 3.50% from 2012 and further to 0.50% as from 2020.

The 0.10% sulphur limit can only be attained by switching to cleaner distillate fuel, such as marine gas oil. In the first quarter of 2010 the price for marine gas oil was about US$600/tonne – about US$200 more expensive than heavy bunker fuel oil. But as oil prices have crept higher, early April saw distillate prices rise to over US$700/tonne.

For shipping, improving efficiency and reducing fuel consumption is therefore a win-win situation, resulting in less emissions of air pollutants and greenhouse gases as well as lower fuel bills.

Source: Sustainable Shipping News, 19 April 2010

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