The shipping industry, which ferries
everything from food to gadgets around the globe, may be out of most people’s
sight, but it is one of the world’s biggest polluters. It only produces 3% of
carbon-dioxide emissions, but it produces 15% of sulfur, 13% of nitrogen, and
11% of particulate emissions.
After much stalling, the International
Maritime Organization (IMO), which regulates international shipping, has begun
to address the shipping industry’s worldwide pollution problem. Starting in
2020, it has ruled that the sulfur content of shipping fuel must go down from
3.5% of fuel weight to 0.5%. The numbers might seem small, but a new report
from IHS Markit, a provider of market and financial data, suggests that both
shipping companies and refineries are likely to face difficulties meeting the
regulation.
“The two industries are vastly unprepared,”
Sandeep Sayal of IHS Markit told Hellenic Shipping News. “Neither has made the
necessary investments for compliance, which means that the 2020 implementation
date will result in a scramble.”
To follow the regulations, ships will need
cleaner fuels, such as marine gas oil, which are more expensive, or they’ll
need to install equipment to clean up the dirtier fuels, such as heavy fuel
oil, that they use right now. Based on oil prices in August, marine gas oil
costs 1.5 times as much as heavy fuel oil.
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A worker holds a cup of heavy oil before it
is shipped to the market south of Fort McMurray, Alberta. (Reuters/Todd Korol)
|
Fuel accounts for as much as half of the
operating costs for the shipping industry, according to David Lifschultz, CEO
of Genoil, a company that upgrades heavy oil. He echoed the conclusion of the
IHS Markit report, saying that the shipping industry is procrastinating on the
problem of cleaning up its fuel. If the shipping industry makes a last-minute
dash to use gas oil instead of fuel oil, it’ll make gas oil prices spike.
The economically smarter way out, Lifschultz
argues, is to invest in equipment that can clean up fuel oil. Genoil offers
such equipment, which can cost between $30 million and $70 million, depending
on what other equipment is available to support the process of removing sulfur
from fuel oil.
The process involves heating fuel oil to
700°C and reacting it with hydrogen in the presence of metal catalysts to aid
the conversion. Much of the sulfur and nitrogen from the fuel is removed this
way, and can be caught in scrubbers installed on the equipment, stopping it
from entering the atmosphere. The process would produce its own carbon dioxide
emissions, because it will burn some fuel for heat, but the reduction in total
emissions from cleaner fuel would be greater.
The shipping industry is under pressure to
find the cheapest possible way to comply with the new regulations, especially
as it’s going through a rough patch. In February, for instance, South Korea’s
Hanjin Shipping declared bankruptcy, and many other shipping companies have
reported losses in 2016 and first half of 2017. The problem was overcapacity,
as companies kept building bigger and bigger ships while demand didn’t increase
at the same pace. If fuel costs, which have been quite low in the last few
years, start to pile up, it could spell much bigger problem for the industry.
Still, even if the shipping industry reduces
its emissions, there are other environmental problems it creates. Ship
scrapping is a highly polluting exercise: asbestos, heavy metals, and oils are
toxic. Most scrapping now happens in India, Pakistan, and Bangladesh where
environmental controls are lax and thus costs are lower.
Source:
quartz. 29 August 2017
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