With less than a year to go before a 2020 deadline, cruise lines are on track to meet a new international fuel regulation designed to cut down on sulfur. But environmentalists claim the path they have charted amounts to life support for one of the world’s dirtiest fuels.
The new rule is designed to save lives. The heavy fuel oil that ships use — the cheap and dirty residue leftover at the bottom of a barrel of crude oil after all the gas products are made — is high in sulfur. Sulfur in exhaust from cargo and cruise ships is linked to 400,000 premature deaths from lung cancer and cardiovascular disease and 14 million childhood asthma cases annually.
A decade ago, the United Nations International Maritime Organization decided to address air quality by capping sulfur emissions in the open sea at 0.5 percent by 2020, down from 3.5 percent.
The simplest way for ships to comply with the new rule is to switch to pricey low-sulfur fuel. Instead, a Miami Herald review of the largest cruise companies, all based in South Florida, reveals the industry is overwhelmingly sticking with heavy fuel oil to power its ships by using “scrubbers,” or exhaust gas cleaning systems, to reduce sulfur output. Scrubbers clean the sulfur out of the heavy fuel exhaust at a lower cost than using the more expensive low-sulfur fuels.
In opting for scrubbers, cruise lines are swimming against the current. The majority of the world’s 50,000-vessel shipping fleet is in the process of switching to the lighter, cleaner fuel, according to market analysts. But most of the world’s 300-plus cruise ships — less than one percent of the global commercial fleet — are committing to scrubbers.
The cruise lines call the scrubber a technological innovation — and it’s not a cheap one. Depending on the type and size — ranging from one to 10 meters in diameter — scrubbers can cost around $5 million each, plus the cost of taking the ship out of circulation to install the device. Ships have multiple engines and therefore require several scrubbers. But those costs are outweighed by the price difference: heavy fuel is more than 30 percent cheaper than low-sulfur fuel.
Environmentalists call the scrubber a waste of money that maintains the status quo. Using heavy fuel with scrubbers comes with environmental risks — like heavy fuel spillage, dirty scrubber waste and other air toxins — that have led some countries to ban their use in coastal waters.
“If you invest in a scrubber you’re trying to prolong the use of heavy fuel oil as long as possible,” said Sönke Diesener, transport policy officer for the Nature And Biodiversity Conservation Union in Germany. “The huge investment should go to zero emission technologies.”
Matter of cost
The drop to 0.5 percent sulfur for international waters is the steepest cut in IMO’s history. (The organization leaves enforcement up to the countries where ships are registered.) Individual countries cap maritime sulfur emissions off their coasts in zones dubbed “emission control areas.”
Currently, ships are able to burn heavy fuel oil, which has an average sulfur content of around 2.5 percent, freely in international waters. Facing the 2020 deadline, the world’s fleet has three options for compliance: switch to low-sulfur fuel, continue to use heavy fuel oil and install scrubbers, or switch to liquified natural gas.
At the time the rule was conceived, some industry analysts assumed the obvious choice for cruise companies would be low-sulfur fuel. Headlines heralded the rule change as “the end of the era of heavy fuel oil,” and even the director of business development at Port Everglades said in 2009, “the trend is that light, non-sulfur fuel is the way to go.”
But the world’s four largest cruise companies — Carnival Corporation, Royal Caribbean Cruises Ltd., Norwegian Cruise Line Holdings Ltd., and MSC Cruises — are installing scrubbers on the majority of their ships and will still be using heavy fuel after the rule takes effect.
Of the 207 cruise ships belonging to these companies collectively, 68 percent will run on heavy fuel with scrubbers, 31 percent will run on low-sulfur fuel and one percent — just two ships — will run on liquified natural gas by Jan. 1, 2020. Even the newest company to the cruise industry, South Florida-based Virgin Voyages, which touts sustainability as one of its top priorities, is using heavy fuel with scrubbers on its first thee ships. (The first debuts next year.)
The main reason scrubbers are so popular: cost. Currently the global average price for one metric ton of heavy fuel is about $400; low- sulfur fuel goes for about $640 per metric ton, according to shipandbunker.com. And cruise companies use a lot of fuel. The world’s largest cruise company, Carnival, reported consuming 3.3 million metric tons of fuel in 2018. The second largest, Royal Caribbean, expected to consume 1.4 million metric tons of fuel last year, according to financial filings.
However, the cost of complying with the new rule won’t affect ticket prices, Carnival confirmed.
In coastal emission control areas that require 0.1 percent sulfur, scrubbers can be ramped up to meet the stricter standard. The scrubbers can get the sulfur content in the air to below 0.1 percent.
“We can use a cheaper fuel and still be in compliance,” said Andrea DeMarco, vice president of corporate communications at Norwegian Cruise Line Holdings Ltd. “The payback is definitely worth it.”
Environmentalists say low-sulfur fuel is a better option because it releases fewer heavy metals and other toxic residuals into the air when burned, and it doesn’t produce anything that gets dumped in the ocean, like scrubbers do.
“Scrubbers allow companies to keep using cheap bunker fuels,” said Andres Tremante, a senior instructor at Florida International University’s mechanical and materials engineering department. “It’s like a coin with two faces. Yes, they will help us out today, but it won’t be helping us out tomorrow.”
Cruise lines already carry the low-sulfur fuel on board for places that have banned scrubbers, like California, and to use in their lifeboats. Royal Caribbean’s newest ship carries a four-day supply of low-sulfur fuel on board at all times in case the scrubber systems break. But companies say the lighter fuel is too expensive to use all the time. And with a global fleet that sails to all seven continents and countless remote islands, they say it isn’t available everywhere they need it.
“By opting for installing a tech that achieves the same result they were able to be assured on compliance and not have to think about whether the fuel type would be available in the ports of call where they were going,” said Donnie Brown, vice president of maritime policy at the cruise industry’s lobbying arm, Cruise Lines International Association (CLIA).
Only a few refineries produce the low-sulfur fuels, said Antoine Halff, director of the program on global oil markets at Columbia University’s Center on Global Energy Policy. However, the refineries are owned by some of the world’s largest oil companies — Shell and Exxon. And if ships don’t have scrubbers and can’t find the low-sulfur fuel at certain ports, the 2020 rule allow for ships to submit statements and avoid penalties if the fuel is indeed unavailable.
The adoption of scrubbers is a boon for companies that make them. In 2017, Wärtsilä, a leading scrubber manufacturer, was building devices for 400 cargo and cruise ships. By the end of 2018, that had ballooned to 2,400 contracts.
Where scrubbers work
Scrubbers can process pollution in three different ways.
Open loop scrubbers spray a seawater-based mixture at exhaust gas to remove sulfur, which is then filtered on board and dumped back in the sea. All of Carnival’s 85 heavy fuel ships will use open-loop scrubbers.
Closed loop scrubbers use a freshwater-based mixture that is cleaned on board and re-circulated in the device until it becomes too saturated with sulfur. Then, it is filtered and dumped into the ocean or disposed of on land. Norwegian’s 11 heavy fuel ships will used closed loop scrubbers. A hybrid system, the most expensive of the three, can do open or closed loop mode. Royal Caribbean’s 34 and MSC’s 11 heavy fuel ships will used hybrid scrubbers.
Royal Caribbean has a policy of not disposing of scrubber discharge within three nautical miles of the coast. It is the only cruise line of the five interviewed for this story with such a rule.
Germany, Belgium, Lithuania, Latvia, China, Fujairah, Dublin and Waterford, Ireland, and the U.S. state of Connecticut have banned scrubber discharge in their waters, and Singapore is enacting a similar ban. That means Carnival’s ships will have to switch to low-sulfur fuel near those places.
California doesn’t allow ships to use heavy fuel in its waters, even with a scrubber, and requires cruise ships to switch to low-sulfur fuel. Norway is considering a similar ban for its fjords, and the IMO is considering banning heavy fuel in the Arctic.
All scrubbers create sludge that can’t be splashed into the sea. The smallest engines produce around 0.5 liters of sludge per hour in open loop mode and 15 liters in closed loop mode. The sludge is supposed to be offloaded at port and disposed of by a contractor.
But proper pollution disposal has long been a challenge for the cruise industry.
In 2017, Princess Cruises, owned by Carnival Corp, was fined $40 million for illegally dumping oily water into the ocean for years and covering it up to cut costs. That conviction came nearly two decades after Royal Caribbean pleaded guilty to the exact same crime. Last year Carnival entered into an enhanced monitoring agreement with the U.S. Environmental Protection Agency after it repeatedly dumped scrubber discharge that didn’t meet U.S. standards in Alaska. Also last year, France fined a U.S. cruise captain for P&O Cruises, a Carnival subsidiary, more than $100,000 for burning fuel with a higher sulfur content than the European Union allows. Carnival is appealing that decision, arguing the limit doesn’t apply to cruise ships, only ferries.
The IMO doesn’t have any enforcement power over the cruise companies. Enforcement in international waters falls to the cruise ship’s flag state, the most common including the Bahamas, Panama and Malta. A 2000 Government Accountability Office analysis of environment violations found that those states rarely took action against the cruise lines.
The future of fuel
Regardless of the cruise companies’ fuel choices, the IMO sulfur rule represents a crackdown on air quality around the world. And most cruise lines appear to be complying, meaning there will be a lot less sulfur in the air. But that’s not the only concern around emissions.
To minimize the imminent, irreversible effects of climate change, society will have to ditch fossil fuels altogether. Some experts see maritime emissions as low-hanging fruit in the rush to cut emissions and halt global temperatures from rising to 2 degrees Celsius by the end of the century, which would spell doom for Caribbean islands and the world’s coral reefs.
The maritime industry produces about 3 percent of the world’s carbon dioxide emissions annually, around as much as Germany. Cruise ships make up a fraction of the world’s fleet.
“We’re just a drop in the bucket if you look at the amount of fuel that is burned worldwide,” said Royal Caribbean’s director of environmental programs Nicholas Rose.
CLIA recently announced the sector plans to cut the rate of global fleet emissions by 40 percent by 2030. That’s not a cut in overall emissions, just a cap on emissions per ship. And the cruise industry is growing. Cruise ships are expected to draw 30 million cruisers this year on 365 ships, up from 23 million cruisers on 308 ships in 2015. Cruise companies have 25 new ships on order.
Some cruise companies are experimenting with renewable energy. In 2017, Royal Caribbean became the first cruise company to pilot a fuel cell system, which produces energy from a chemical reaction. Norwegian cruise company Hurtigruten is planning to fuel its ships with liquified biogas made from dead fish. Virgin Voyages will use the heat produced by its ship’s engines to create electricity with a technology called Climeon.
For now, sulfur-free, zero emission cruising is out of reach. Experts say battery, solar, wind, hydro, and biofuel technologies are simply not powerful enough yet to propel an 18-story, 54,000-ton ship through the ocean, not to mention providing air conditioning, laundry service, and all-you-can-eat buffets to thousands of passengers and crew aboard.
“Even if we covered our entire decks with solar panels the best we could do is power a couple of elevators,” said Carnival Corporation’s Senior Vice President of Marine Technology and Refit Mike Kaczmarek.
All five cruise lines interviewed for this story are using LED lights, redesigning their ships’ hulls to prevent friction, using shore power when possible, and upgrading to more efficient heating and cooling systems — tweaks that make today’s cruise ships about 25 percent more efficient than a decade ago. Scrubbers require more energy, slightly counteracting gains in efficiency.
Some cruise companies are investing in liquified natural gas, the cleanest burning fossil fuel. Natural gas emits virtually no sulfur, which makes it another option to meet the IMO’s 2020 standard. Unlike scrubbers or low-sulfur fuels, switching to LNG is spatially and economically impossible for an existing ship, so it requires a new build.
The biggest company in the industry, Carnival, is building nine LNG-powered ships by 2025 to add to the two that will already be in its fleet by the time the new sulfur cap takes effect. Royal Caribbean will debut its first LNG ships in 2022 and 2024, and MSC is building five LNG ships to be launched from 2022 to 2027.
Powering ships with natural gas has its own environmental risks. Spills at ship yards, during refueling or on board release methane, an explosive greenhouse gas 30 times worse for the atmosphere than carbon dioxide. Virgin Voyages cited this possibility as a reason why they’re staying away from LNG ships for now.
As 2020 approaches, cruise companies’ biggest investment will come in the form of scrubbers, meaning they won’t be moving away from the fuels of the past anytime soon.