THE MARPOL EFFECT German study
Stockholm 24032011Dr. Gernot Tesch
MD Scandlines Deutschland GmbHRostock/Germany
• German Shipowners‘ and Ports Associations
• Scandlines/TT-Line/Team Lines
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Global and local sulphur regulations:High burdens for SECA especially problematic for feeder and ferry operators as direct competition to road
MARPOL Annex VI – regulation of sulphur content in ship fuels
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Background
Structured dialogue with German Government since 2008
GER with support for MARPOL VI regulation
GER also acknowledged the need to prevent modal shift
In December 2008 agreement for a joint impact assessment
German focus in addition to other studies
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Background
Study by wellknown and reputated Institute of Shipping Economics and Logistics (ISL) Bremen
Analyse cost effects on Short Sea Shipping and relevant markets
Analyse the effects on competition of transport modes
Estimate the volume of modal shift
Estimate effects on German ports
Recommendation
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Assumptions
Relevant Market
Analysed corridors with impact on Germany
–West SWE/N–South SWE–Balticum states–Russia–Finland
- Belgium - SWE
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Assumptions
Relevant Market – corridors & route alternatives
ISL 2010
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Assumptions
Reference scenarioShip costs
cost components for truck transport
ISL 2010
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Results
Total cost increase in RoRo-sector for sea transport
ISL 2010
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Some Results
Total cost increase in feeder sector
ISL 2010
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Results
Risk of modal shift in RoRo sector
ISL 2010
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Results
Risk of modal shift in container shipping
ISL 2010
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Impact on the German road transport infrastructure 2015
RoRo: 604.000 trailer à 100 km 60 mill extra truck km
Container: 820.000 TEU
113 mill extra truck kmFeeder: 315.000 TEU
(2 TEU / à 360 km)
Short Sea: 95.000 TEU
à (2 TEU / à 150 km)
14 mill extra truck km
187 mill extra kmon German roads
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Recommendations and solutions
Discussion of all measures to prevent modal shift with German Government as regards SECA sulphur limit
Exhaust gas treatment technology
Alternative fuels (LNG)
Adjustment of sulphur caps
Postponing
Discussion/alignment of position with other countries
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Technology not sufficiently mature: Ongoing prototype testing by producers, but NO single sale at the market reported (test installations only and only on 1-engine-type vessels; we are running with 4 engines on main routes)Found not sufficiently reliable at this stage (DFDS as test operator decided not to put scrubbers onto additional vessels until reliability has improved)Low penetration in the market – no experiences about longer term reliability/effectivenessNational and international regulation – which systems are allowed in the Baltic? “Wet” method -> discharge at sea not recommendable in the Baltic, “dry” method –> requires setting up a disposal system) (again: different systems in the different SECA areas)Availability of HFO in the Baltic area as precondition for scrubbers still unclearAdditional operational costs (higher fuel consumption, additional consumables, maintenance costs), hence higher CO 2 emissionsMost suitable for new buildings, retrofitting of existing to be found unrealistic:
Dry docking, additional electrical power, space for scrubbers not available, impact on ship stability, loss of cargo capacity and deadweight, ice class issues (increased draft), stability and noise problems
On RoRo and RoPax scrubber installations will be most challenging due to weight, design, capacity issues and decreased deadweight: Exhaust Gas Cleaning System Association: “not suitable for all vessels” (volume vessels like ferries)capacities not available for retrofitting 600 inner-SECA vessels until 2015 Upper limit regarding engine power, unless running multiple scrubbers in parallel (given that space is available)We are using 0,1 % since years voluntarily on HH, haven`t identified scrubber as alternative yet
MAIN PROBLEM: NOT CONTRIBUTING TO CO2 – REDUCTION
Exhaust Gas Treatment Technology
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More seen as a long term option for new buildings onlyCurrently valid for new buildings on pre-defined routes (no change of fleet for at least 20 years expected) and with the support of considerable subsidies (single vessel VIKING Line 27 M€)space, technical and costs constraints for retrofittingmore space is required to accommodate the LNG tanks (up to a factor of 4)worsens the ratio of investment costs to income from cargo transport, difference between the price of LNG and MGO sufficiently high Much needs to be done in terms of infrastructure and bunkering supportBunker infrastructure not existent and not to be created overnight, will not be available 2015 for sureLack of harmonized rules and procedures
CAN CONTRIBUTE TO SHIPS CO2 EMISSION REDUCTION
LNG
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Fuel with 0,5 % sulphur content
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Investments requires certainty about technology, fuel availability and legislation (wet or dry)
Additional regulation expected (CO2)
Investment in scrubbers for a few years only and a later switch to LNG isn`t acceptable
Loss of investment when sale into different parts of the world
Loss of flexibility (no charter/sale possible any longer)
Difficult bank financing
Different measures for existing vs. new ships as retrofitting of the existing fleet economically not viable whereas for new buildings a technical solutions seems to be possible, considering the technical progress until 2015 and the preparation work, possible on new buildings but hardly on existent vessels
Interim solution for existing fleet urgently needed (0,5% vs. 0,1% ) or postponement (Swedish/Finnish initiative), in order to prevent the modal shift and to enable the operators to accumulate the necessary capital for a stepwise replacement of the existing fleet
Conclusion
Thank you! • Dr Gernot Tesch• Scandlines Deutschland• [email protected]
