High Cost or High Sulfur? Dilemma Fuels Discussion

The Ship Operations Cooperative Program (SOCP) has released its recently completed study on Exhaust Gas Cleaning System (EGCS).  SOCP conducted the study in light of new EPA regulations that become mandatory to ships operating in Emission Control Areas (ECA) in 2015 requiring low sulfur emission.  The study is designed to assist ship operators in the dilemma of switching to expensive distillate fuel in ECA or install EGCS and continue to burn hi-sulfur heavy fuels.

“The Guide will assist ship operators in determining their emissions requirements, calculating potential cost savings, and understanding the integration and operational challenges of various EGCS technologies available today.  It offers a variety of strategies, with the relative merits and tradeoffs, to help make an informed decision,” says SOCP President Glen Paine.

The development of this Guide is made possible through the financial support of the U.S. Maritime Administration (MARAD) and the Ship Operations Cooperative Program (SOCP).

“SOCP is an industry-government partnership whose purpose is to address and promote commercial shipping operations through the identification, development, and application of new methods, procedures, and technologies. SOCP’s overall objective is to improve the competitiveness, safety, security and environmental responsiveness of all U.S. vessel operations,” Paine says.

The report says that as of 2015, ship operators that trade in emissions control areas (ECAs) will be required to burn fuel with less than 0.1% sulfur content.   “A ship operator may meet this requirement by burning high-sulfur fuel at sea, and then “switching” to low-sulfur fuel within the ECA.  Other ship operators may choose to reduce operational efforts by “converting” such that they always burn low-sulfur diesel fuel oil, or utilize natural gas that has almost no sulfur content.   Alternatively, international convention allows a ship operator to burn high-sulfur diesel fuel if using an exhaust gas cleaning system (EGCS) that can reach an equivalent level of emission reductions. These systems “scrub” most of the sulfur, and some amount of particulate, out of the exhaust gas after the high-sulfur fuel is burned,” the report states.

The cost of 0.1% distillate fuel oil has historically been 50% higher than higher sulfur marine grade residual fuel oils. An analysis of three ship types, each of which operated at least partially within an ECA, predicts net present values between $5M and $20M, and internal rates of return between 20% and 53%. This assumes operations from 2015 through 2025, and an 8% fuel escalation rate. If fuel prices were to escalate at a rate of 11% annually, the net present value would increase by almost 50%. These cost savings are so significant that some ship operators may find installing an EGCS a competitive necessity, according to the report.

However, the report continues in saying that most systems are still in their prototype development phase, and therefore carry with them technical risks.  “Even assuming early technical issues are overcome, the ongoing impact of these large and complex devices may include: heavy fuel oil heating, purifying, and waste stream management; treatment and waste chemical handling and storage; approximate doubling of the
engine stack size to accommodate scrubber units; weight and stability issues; and additional engineering staff to run the machinery and monitoring equipment. Also, it is not yet clear if wet scrubbers can remove fine particulates to an equivalent level of reduction as is achieved by switching to low sulfur fuel oil. While there is no current requirement for particulate removal, the United States Environmental Protection Agency (EPA) published discussions have opened this possibility

•    In general the ship candidates for engaging in this dialogue will meet the following criteria:
•    New and existing ships built before International Maritime Organization (IMO) Tier III NOx requirements (Pre-2016 for USCG Category 3 Ships), and
•    The ship burns at least 4,000 metric tons of fuel oil annually within an ECA, for a period of at least six years starting in 2015, and
•    The ship passes a technical survey ensuring that an EGCS can be integrated with ship arrangements, stability, and operations. For closed loop and dry chemical systems, chemical supply chains are confirmed.  Ships that must comply with the IMO Tier III NOx requirements may not be able to install “wet” scrubber style EGCS. These ships will require advanced systems that process NOx and sulfur emissions, and possibly fine particulates.

Exhaust Gas Cleaning Systems Guide - Final Report is available now.  SOCP Members can download it, after login, from Documents link (on the left) under “SOCP Project Reports” folder.  SOCP Non-Members can get a copy of this report by sending an Email to programadmin@socp.us with your following information: Contact Name, Contact Phone Number, Organization Name, Organization Address .

Comments (2) -

Great..minimize the air pollution..lets make it happen

Gerard |     4/6/2011 2:07:15 AM #

I am for reducing every kind of pollution, be it air, noise, marine, environmental etc. But where are we heading for? To what extremities we are being pushed to? Over a period number of ship staff working on each vessel has reduced considerably, port/ship operations have become faster, commercial burden has increased & with these the difficulties of the ship staff to an extent that this profession is being disliked by many as new other avenues are available with better prospects including remuneration & peaceful life. Is it a feasible solution pushing the ship staff to this extent which might lead to disasters? Think of people working on board the vessel & then introduce new legislation for benefitting the staff so that the job appears to be a possible achievable task & people won't hesitate to join this profession.

Milind Khante |     4/7/2011 9:49:41 AM #

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