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CIMAC Congress to discuss challenges facing marine industry

11 April 2016

The marine industry has been faced with a number of challenges related to the recent IMO emission and fuel regulations, pressures to reduce CO2 emissions from ships, as well as other IMO and local regulations that affect international shipping. The forthcoming CIMAC Congress in Helsinki will provide a unique opportunity to keep up to date with what is happening in the world of marine engine and fuel technology. The Congress—organized once every three years—also covers large-bore internal combustion engines used for power generation and locomotive engines.

Approaching the Congress, we talk to Derek Walford—a Member of the CIMAC Board—about the issues facing the marine industry. Derek is a Vice President of the Vancouver-based Teekay Group—one of the world’s largest shipping, marine energy transportation, storage and production companies. Derek joined Teekay in 2000 and has led the New Building program for a number of years. He has also been involved with new/prospective legislation and future technology. Prior to coming ashore in management roles, Derek sailed as Chief Engineer.

Teekay is a corporate member of CIMAC—Derek has been a member of the CIMAC USER group for nearly 20 years and is currently Vice Chairman USER’s on the CIMAC Board.

DieselNet: Derek, let's start with a look at the effect of the IMO emission standards on the marine industry. The IMO standards and the harmonized US and Canadian regulations mandated the use of lower sulfur fuels by ships while in Emission Control Areas (ECA) and, from this year, require about 75% NOx emission reduction from new ships while operated in NOx ECAs. What has been the effect of these regulations on purchasing decisions by shipping companies? What are the dominant emission technologies--SCR, EGR, scrubbers, natural gas propulsion?

Derek Walford: Wow quite a complicated question(s) for starters! Taking sulfur first, the use of lower sulfur fuels in the ECA areas is now well established and we trust most ship owners are in compliance. Certainly we would not like to see that others may gain commercial advantage by non-compliance. As a ship owner we are keen to see a “Level playing field” and also for a common sense approach to new legislation and its implementation. On some short sea routes in ECA zones owners have opted to fit scrubbers to reduce SOx—which saves money in comparison to the high cost of low sulfur fuel.

Moving onto Tier III North America NECA—This is gradually affecting ship owners, as you rightly point out, the only vessels affected so far are new ships being constructed after January 1st of this year and is an 80% reduction over Tier I levels of NOx. This is mandatory for new ships if an owner wishes to trade in the North American NECA, sometime in the next few years other ECA areas will adopt this also. Purchasing decision will be based on the project. A cost benefit analysis has to be carried out before deciding on the type emission technology that is to be fitted for that specific vessel. The challenge in taking this decision is the duration of the project versus the life of the vessel.

The available technologies for compliance with Tier III limits are SCR, EGR and LNG as alternate fuel. Dual fuel burning engines will still require SCR or EGR to comply with NECA regulations. Exemptions granted by certain flag states are only in case of emergency and not for commercial reasons.

The North American NECA affects Jones Act or Canadian coastal trade vessels in different ways to those on international trade which may only spend a few days per voyage in an ECA area. So for instance, we are now seeing Jones Act vessels being built capable of using LNG as fuel. International owners depending on trading pattern and their view of future fuel costs, may well continue to use low sulfur gas oil in the NECA, but will need to have equipment fitted for NOx compliance. So in short there is no single answer that fits all.

What is the industry experience with the enforcement of the fuel sulfur and NOx emission standards? Enforcement actions against non-compliant ship operators, such as fines for not switching to low sulfur fuels when in coastal waters, are regularly reported by the California ARB. Are the standards enforced with the same stringency along the remaining US and Canadian coast?

DW: We have heard of some owners fined for non-compliance in the EU as well as the USA. These fines do not always match the potential fuel cost savings. We assume at some stage the authorities will follow up further if there are repeat offenders. I understand Transport Canada has taken action including vessel detention (which probably costs the owner more than a fine) and warning other owners regarding compliance. So presently enforcement is patchy across the ECA’s. But am sure this will improve over the next few years. My view is that most owners are at least in compliance with the “spirit” of the regulations; there are some issues:

  1. The owner is responsible for ensuring that the fuel used is at the correct level or below in regards to sulfur—but the owner has no control over the quality of the fuel supplied, i.e., specified fuel and actual delivered fuel can be different and the sulfur levels could be too high.
  2. Testing methods & accuracy need to be agreed by all parties.
  3. Fuel change-over is another issue that certainly has been often reported by the US Coast Guard. It involves problems when vessels are changing over fuel, sometimes resulting in loss of propulsion, quite often at critical stages in the voyage.
  4. A potential requirement considered in the EU is to take samples from close to the fuel pumps instead of the tanks involved. This will only add additional risks of incidents due to fuel leakage. It needs to be a common sense approach please!

I am sure that the standards will be enforced more stringently in the future and as technology improves. We are already seeing comments about sniffer drones going to be used in some Ports to check for compliance.

NOx under Tier II has been dependent on the engine equipment & certification from the test bed; few actual in service measurements are taken. Under Tier III, ship operator will have to ensure the relevant equipment is put into use at the right time and that it is fully operational to ensure the NOx limits are met. No doubt in due course this will all be automatically recorded.

How is the IMO EEDI affecting the design of new ships? Conceivably the EEDI could encourage designs with more efficient hulls that can use lower power engines to achieve a similar deadweight capacity as older ships, or designs with a higher deadweight capacity that provide lower CO2/ton-mile. It could also affect fuel choices.

DW: Certainly the IMO EEDI is pushing both ship builders and engine designers to further reduce vessels emissions, I am sure we will see a lot of new and/or improved technology in this area. Just recently, a cruise vessel was delivered with Air Lubrication—where it is stated it will save about 7% in fuel, which of course also translates to reduced CO2 emissions. Prior to the introduction of EEDI, ship builders in particular were not really concentrating on looking for real improvements, their main focus was on building the ship as cheaply as possible—and, of course, owners wanted a cheaper ship! I can remember a few years ago I was trying to persuade shipyards to agree on a more efficient design of tanker—but getting support from them was very difficult. The EEDI has changed this attitude.

Teekay has ordered a number of MEGI dual fuel, natural gas/diesel engines. What is your main application for these engines? Will natural gas propulsion expand significantly beyond the LNG carrier application? Considering the uncertainty about future natural gas prices, how do you make your purchasing decisions?

DW: So far all of the Teekay vessels fitted with dual fuel engines (4-stroke or 2 stroke) are LNG carriers, where it is a natural preference to be able to burn the boil off gas. Teekay’s first LNG vessel with MAN B&W MEGI engines (2-stroke) was delivered recently and the 2nd vessel has now completed sea trials. Teekay already has a number of LNG vessels with the Wartsila (4-stroke) solution in service. Gas is not the solution for all trades; investment cost is very high, so pay back periods can be too long to make commercial sense. In short sea shipping, especially in and around ECA areas, we are already seeing a lot of orders for vessels with capability to burn gas. Liner trades may also see an increase on being at least “gas ready” from New Build. Part of the problem here is the loss of cargo space lost due to the increased size of LNG tanks in comparison to regular fuel oil tanks.

Most of the gas engine studies were carried out before the recent drop in oil price which, if anything, will deter more owners from choosing dual fuel. There are of course other fuels being tested or indeed vessels have already been built or converted to run on some, such as methanol, but the adoption of these fuels will be dependent on the trade and, indeed, each owners view of the future with regard to the costs of different fuels and other factors.

The issue of HFO fuel quality attracted considerable attention at the CIMAC Congress in the past. With the new IMO sulfur rules, the marine fuel landscape becomes much more complex. How important are distillate fuels for meeting IMO sulfur requirements?

DW: Distillate fuels certainly will remain an important component of the fuel mix for many years to come, unless someone comes up with something better and or cheaper to use.

Will HFO remain an important fuel in the future?

DW: Had to warm up my crystal ball for this question! I think there is certainly a market for HFO in the years to come, but of course it will depend on availability (as refineries change their products) and also the relative cost to gas and other new fuels.

Is the quality of HFO improving or getting worse?

DW: There has been talk of HFO getting worse for many years and certainly I have seen what can happen to engines when we get it wrong. However, the issues are also generally well known and many can be taken care of with careful pre-treatment. There are also cases when fuels must be removed from the vessel, when testing proves they are not compatible with the intended use. If anything, I am more concerned about some of the newer fuels now coming on the market (I would expect we will see more in the future) with different operation and storage limits, etc. This will be a whole new learning curve for the industry and increase the risk of operational error.

Do you have other concerns related to fuel for the foreseeable future?

DW: Well, first, the engine makers are telling us that when running on cleaner fuels such gas or ultra low sulfur fuels, we are also going to need some new cylinder lubricating oils—these need to be developed and tested. Also, some of the new technologies, such as re-introducing water into the fuel, could have negative consequences for engine operation and durability.

One thing is for certain, all the forthcoming changes coming in the combustion engine industry will, if anything, make CIMAC even more relevant in the years to come.

A final question: What are the main issues facing the marine industry on a more general level, outside of the engine and fuels area?

DW: The marine industry it is an extremely competitive industry. One of the biggest threats we see at present is more “regional rules” instead of agreements on Legislation at the IMO level, so we end up with a patchwork quilt of varying rules in different parts of the world. The ongoing issue with Ballast Water Treatment systems is a prime example, where IMO legislation may be finally ratified within the next few months, but as yet there is not even one USCG approved system on the market. EU MRV regulation (Monitoring, Reporting and Verification of the CO2 emissions from maritime transport) is another example of regional instead of international rules.

About CIMAC. Originally founded in Paris in 1951, CIMAC is the leading global association of the internal combustion machinery industry. It is a non-profit association bringing together and representing the large engines industry to regulators and standardizing bodies. In addition to promoting the work of National Member Associations, CIMAC supports and facilitates information exchange and understanding across the global community involved in the development and sustenance of large engines.

The CIMAC World Congress in the field of Large Diesel and Gas Engines is one of the biggest events of its kind worldwide, being held every three years, each time in a different member country. Spanning the globe as well as all technology aspects, the Congress is a unique gathering of key industry decision makers, including engine owners and operators, researchers and developers, and representatives from the engine, component and consumables industries. The Congress program centers on the presentation of technical papers on engine research, development, application engineering on the original equipment side, and engine operation and maintenance on the end-user side. This is complemented by a social program which promotes friendship and networking among engine builders and engine users.

The 28th CIMAC World Congress will take place from 6 to 10 June 2016 in Helsinki, Finland. The Helsinki Congress will feature a rich technical program—the organizers received an overwhelming response to their call for papers, with about 300 abstracts submitted by authors in 21 countries, spanning more than 100 organizations, including universities and research institutes.

29th CIMAC World Congress. The next Congress, after Helsinki, is coming to North America. On behalf of CIMAC, the United States National Member Association and Canadian Members announced Vancouver as the host city for the 2019 CIMAC Congress.

CIMAC Congress