(c) Copyright Thomson Reuters 2019 Faced with imminent new global marine pollution rules, shipping companies and insurers are puzzling over the risks. To reduce emissions of toxic sulphur that cause premature deaths, shipowners who have long relied on the dirtiest residues of oil extraction will have to either switch to low-sulphur fuel or install exhaust gas cleaning systems from Jan. 1. Neither option has been fully tested for long, and some problems have already been reported, both with the more expensive new fuels and with devices known as scrubbers which extract the sulphur on board. Interviews with key players in the industry show varying levels of alarm at potential risks, which they say range from unexpected fires or collisions due to engine failure to liability for inadvertently flouting the rules. The container shipping industry alone is having to invest $10 billion to adhere to the new rules, analysts say, and is concerned about extra costs were things to go wrong. If different types of the new, cleaner fuel are mixed, for example, they may produce a residue which could eventually clog up an engine and, in a worst-case scenario, damage or break it. Several large ship owners said handling the new fuels correctly and making sure the scrubbers were properly deployed would minimise danger, but that if care was not taken, problems could arise. “The big guys are going to be serviced by the right people … there is bigger risk for the smaller ships,” Hugo De Stoop, chief executive of leading Belgian tanker operator Euronav , told Reuters. Euronav has bought the equivalent of almost six months’ supply of compliant fuel and is storing it in a megatanker off Malaysia. If a ship is too far away and has to buy fuel, it will try to buy a single type, or, if only a blend is available, ask to see the seller’s lab tests. “We don’t always believe that people have done the test, been diligent about it,” he said. FUTURE PROOFING Khalid Hashim, managing director of one of Thailand’s largest dry cargo ship owners, Precious Shipping, said it had not allowed co-mingling of marine fuel, also known as bunker fuel, for over five years and required all of it to be sample tested. “Of course this costs us annually around $100,000, but we prefer that cost than to use untested bunker oil based solely on the Bunker Delivery Receipt and find that we have a massive problem on our ship,” he said. The company had taken measures to reduce its ships’ fuel consumption to offset some of the extra costs and had installed extra compartments for the tanks on board to avoid mixing, he said. “That way we would have future-proofed our ships for the IMO 2020 regime,” Hashim said, referring the U.N. International Maritime Organization’s rules, agreed by more than 90 countries in hopes of saving more than half a million lives by 2025 alone. Around 172 ships have avoided the problem because they are powered by sulphur-free liquefied natural gas (LNG), data from Norwegian risk management and certification company DNV GL showed, but this in an expensive option. Some ship owners have balked at paying for the new 0.5% sulphur fuel, which is quoted at more than twice the price of the 3.5% high-sulphur grade in northern Europe at the moment. More than 3,000 ships – around 5% of the global fleet – will have scrubbers fitted by 2020 so they can clean the exhaust gas and so continue using existing fuel, the DNV GL data showed. Some ports have banned one type of scrubber, the open-loop version which empties washwater residues into the sea, and insurers have reported cases of fires or corrosion with the devices. Norwegian ship insurer Gard cited a few cases where sparks from welding or cutting fell into a scrubber through uncovered openings: in one case it spread to the engine room through glass reinforced epoxy piping. If corrosion was legally deemed to be inevitable, underwriters might try to deny related claims, said Stephen Harris, senior vice president with insurance broker Marsh. “Whether underwriters adopt this line or not could depend on how frequent and how big the problem becomes next year.” Roger Strevens, VP of global sustainability with Norwegian shipping company Wallenius Wilhelmsen, said its experience with scrubbers had shown risks could be minimised if done properly. “If you buy cheap, you’ll pay twice,” he said. CREW SAFETY Nautilus International, a union which represents over 20,000 workers in shipping, said the use of new fuel types would place extra strain on crews, who have reported incidents including power loss when changing fuels, filter problems and leaks. “These are complex requirements,” Nautilus professional and technical officer David Appleton said, calling for comprehensive training and protection in cases of inadvertent infringements. An underlying problem is that oil refineries are not obliged to produce tailor-made shipping fuel, said Neil Roberts, head of marine underwriting at Lloyd’s Market Association, which represents the interests of all underwriting businesses in London’s Lloyd’s insurance market. “The ship’s crew has to test it and filter it,” he said. The IMO said it does not have a remit to regulate the fuel industry but that international standards for the new fuel and information about compatibility between types had been issued as part of comprehensive preparations. “IMO is ready, and we are confident IMO member states and the shipping sector are ready for January 1,” an IMO spokesperson said. Protection and Indemnity (P&I) clubs, through which groups of shipping companies cover injury and pollution claims, are in wait-and-see mode. Alvin Forster, deputy director with North P&I club, cited possible engine failure in busy shipping lanes, while Precious Shipping’s Hashim said members investing in expensive low-sulphur fuel should not have to share the
SIngapore, Nov 09 Singapore has decided to extend for another five years a key initiative that seeks to reduce the environmental impact of shipping and promote clean shipping practices. The Maritime Singapore Green Initiative (MSGI), which was due to expire at the end of this year, was introduced by the Maritime and Port Authority of Singapore (MPA) in 2011. It comprises Green Ship, Green Port, Green Technology, Green Energy and Green Awareness programs. Speaking at the Singapore Registry of Ships Forum 2019 on November 8, Quah Ley Hoon, Chief Executive of the MPA, revealed: “I am glad to announce today that we will extend the MSGI and enhance it for another five years till 31 Dec 2024.” “We will give it a new focus on decarbonisation. For example, we hope that the Green Awareness Programme will encourage you to start exploring carbon reporting and internal carbon pricing,” she added. The enhanced MSGI will have new incentives to encourage adoption of engines using alternative fuels with lower carbon content such as LNG as well as the use of LNG bunker during port stay and for ships exceeding IMO’s Energy Efficiency Design Index requirements. As informed, the MPA expects its two LNG bunker tankers to facilitate ship-to-ship LNG bunkering for ocean-going vessels from Q3 2020 onwards. In addition, the MPA is working to develop ecosystem and infrastructure to position Singapore as a key LNG bunkering hub for the region and the world. “We expect more LNG vessels to call on our port. We are preparing for the first simultaneous operations for LNG bunkering and cargo operations next year,” Quah Ley Hoon further said.
By Ints Kalnins TROMSOE, Norway, Sept 20 (Reuters) Scientists from 19 countries are preparing to embark on a year-long expedition to the Arctic, the longest project of its kind, to better understand global climate change. The icebreaker Polarstern is preparing to set sail from Tromsoe in northern Norway, allowing hundreds of rotating researchers to spend the next year close to the north pole. “We want to go to the Arctic because it’s the epicenter of climate change,” Markus Rex, an atmospheric scientist at the Alfred Wegener Institute in Germany who leads the project, told Reuters. The expedition, called Mosaic, is the first opportunity climate researchers have had to study the Arctic during the winter season as it has lacked necessary icebreaker equipment. “We don’t understand the climate system in the Arctic well because we have never been there in winter,” Rex said. The scientists will for the first time be able to observe the key climate processes in the central Arctic year round, in the hope they will be able to generate more robust climate predictions in the future. “So far the climate models all have to guess somewhat about how these processes work in the central Arctic,” Rex said. (Writing by Victoria Klesty in Oslo; Editing by Steve Orlofsky) (c) Copyright Thomson Reuters 2019.
By William Mathis (Bloomberg) –The U.K. is set to open the first contest in a decade intended to draw as much as 20 billion pounds ($25 billion) of investment in offshore wind farms. The move in a competitive auction for leases where developers can plant large-scale turbines at sea will bring at least 7 gigawatts of new power generation capacity to the U.K. grid and speed up a shift toward cleaner energy supplies. Britain is pushing both to reduce fossil fuel emissions that cause climate change and to replace nuclear and coal plants that regulators say must close within the next few years. The government has estimated it may need 100 billion pounds of investment over a decade or more to upgrade its aging power networks. “With the tremendous cost reduction that’s happened with offshore wind, the technology will have a key role to play in de-carbonizing the U.K. energy system,” said Huub den Rooijen, director of energy, minerals and infrastructure at the Crown Estate, which is conducting the auction. Opening the Seabed The Crown Estate, which manages the waters around England, Wales and Northern Ireland, will auction leases for offshore wind development in four areas. The announcement kicks off a process for developers to submit proposals for leasing rights to the areas that could lead to billions of pounds of investment. Building turbines at sea was once seen as niche within renewable energy, but after costs plunged in the past few years the technology is becoming more attractive to utilities. The growth of offshore wind projects will likely push power prices down even further, which makes it more likely that subsidies will continue to be needed in future, according to Tom Harries, a wind analyst at BloombergNEF. While that could be good news for investors eager for stable returns, it makes it harder for wind to stand on its own in the power market. “If the ultimate aim is to wean off subsidies,
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