Internationalisation of the ancillaryindustry via identification of business opportunities
1 IntroductionThis report highlights potential international business opportunities in the ancilliaryshipbuilding and shiprepair industries. Since this is a very wide topic the information in thecore of the report should be regarded as an overview and individual organisations shoulddecide how they might best be able to exploit any opportunities in view of their own fieldsof expertise. Additional information may be found by checking the references.2 Current state of play in the auxiliary maritime industry2.1 Atlantic Area Region
2.1.1 SpainRecent years have seen a growing importance of innovation in the Spanish shipbuildingindustry. Research, development and innovation investment in the shipbuilding sector hasincreased by about €1bn (about 10% of turnover) over the past four years. Theshipbuilding and shiprepair industry has links with both maritime and non-maritimeindustries.2.1.2 PortugalShip repair turnover was €146m which is a decrease of 15%. However Vianayards ismodernising as a response to increased demand from the Navy. Shiprepair activity was inline with expectations in Q1 of 2010. (1)2.1.3 UKThe naval sector has seen significant growth including work from the QE2 Class aircraftcarrier, Astute submarine and Type 45 Destroyer programmes. The UK will invest £75bn inoffshore wind energy by 2020. The Marine Industries Strategic Framework was launchedby the government department for Business Innovation And Skills (BIS).2.1.4 FranceCIGAN the maritime industries association was launched in 2009. The French navy markethas seen a tendency toward global fleet contracts. The main shiprepairer DCNS is takingorders from non-Navy fleets. STX-France S.A. has two yards and delivered one of thebiggest cruiseships in Europe and this received a “6 golden pearls” notation from BureauVeritas.
3 Potential Developing Markets3.1 Exhaust/Airborne Emissions Control Emission type Region of impact Main effects Nitrogen Oxide (NO2) Local Health Regional Acid rain Global Global warming Sulphur Dioxide (SO2) Local Health Regional Acid rain Carbon Dioxide (CO2) Global Global warming Particulate Matter Local Health PM2.5/10 Table 2 Main airborne emissions and their effectsTable 2 shows the main detrimental effects of airborne pollutants caused by shipping andoffshore platforms. These emissions are subject to a wide range of legislation which isbecoming stricter with time. The most notable Maritime legislation is MARPOL (“MarinePollution”) Annex VI which covers SOx and NOx and Ozone depleting substanceemissions (others too?). The level of emissions permitted varies for different regions.3.1.1 Policy184.108.40.206 MARPOL Annex VI220.127.116.11.1 NOx and SOxThe revised MARPOL Annex VI sets limits on NOx and SOx emissions from shipexhausts, and prohibits deliberate emissions of ozone depleting substances. It also allowsfor Emissions Control Areas (ECA) for SOx, particulates and NOx. SOx has beenassociated with respiratory health problems and MARPOL allows for Sulphur EmissionControl Areas (SECA). The current ECAs are: Baltic Sea (SOx), North Sea (SOx) andNorth America (SOx and NOx). (2) The International Maritime Organisation (IMO)unanimously agreed adopted amendments to MARPOL annex VI amendments and thesecame into force on 1 July 2010. The sulphur content of fuel (used globally) will reduce from4.5% to 3.5% from 1 January 2012. The sulphur content of fuels used on ships in SulphurEmission Control Areas (SECA) was reduced to 1% from 1 July 2010 and will reducefurther to 0.1% from 1 January 2015. There are currently two SECA areas: North Sea andThe Baltic Sea. However it is expected that EU countries, USA, Japan, Singapore andAustralia will also be declared SECA by 2015. This will encourage the use of marinedistillate fuels or sulphur emission control measures such as the installation of scrubbers.There are different standards relating to emissions to air which are known as Tier I, Tier IIand Tier III. These all belong to MARPOL Annex VI.The regulation also applies to fixed and floating rigs and to drilling platforms.18.104.22.168.2 VOCsThe MARPOL Annex VI also sets requirements for Volatile Organic Compound (VOC)management on crude oil tankers. From 1st July 2010 all tankers were required to
implement a VOC management plan specific to the ship. This will cover the minimisation ofloss of VOCs for at least the loading, sea-passage and unloading.22.214.171.124 CO2 emissionsThe International Maritime Organisation (IMO) has three parts to it’s work on energyefficiency and Greenhouse Gas (GHG) emissions, these are: technical measures,operational measures and market measures. These are voluntary but may becomemandatory via MARPOL Annex VI.Technical measures include the Energy Efficiency Design Index (EEDI) for ships. This willrequire certain efficiency level (measured in e.g. CO2 per ton-km) for different ship sizesand types. Progressive tightening of the limits will improve technical measures which leadto reductions in emissions.The Ship Energy Efficiency Management Plan (SEEMP) aims to improve emissionsthrough operational means using the Energy Efficiency Operational Indicator (EEOI) toolfor monitoring.Proposed actions under market measures include contribution schemes for all shipping forCO2 emissions or only for those ships which do not meet the EEDI requirement. Thiswould use an emissions trading system. There may also be rebate schemes to take intoaccount the socio-economic differences between developed and under-developed nations.In late 2010 the IMO circulated proposed draft regulations to make mandatory thetechnical and operational measures (described above). They would be implemented asammendments to MARPOL Annex VI. The proposed amendments will be considered foradoption at the next meeting of the IMO Marine Environment Protection Committee(MEPC) in July 2011.3.1.2 OpportunitiesMARPOL Annex VI Tier II standards are expected to be met by combustion processoptimization. The parameters examined by engine manufacturers include fuel injectiontiming, pressure, and rate (rate shaping), fuel nozzle flow area, exhaust valve timing, andcylinder compression volume.MARPOL Annex VI Tier III standards are expected to require dedicated NOx emissioncontrol technologies such as various forms of water induction into the combustion process(with fuel, scavenging air, or in-cylinder), exhaust gas recirculation, or selective catalyticreduction. (3)Scrubbers are an established technology in land based systems with a short payback time.Aalborg have installed a large scrubber on the Ro/Pax “Tor Ficaria” for its 21MW mainengine. Aalborg Industries (4): used this ship in a case study to determine costs andpayback times for in retro-fit and new-build scenarios : Costs Retro-fit New build (USD) (USD) Capital Cost $2,900,000 $2,900,000 Installation $3,000,000 $1,500,000 Running & Maintenance (inc. 2% of fuel cost) $181,440 $181,440 Payback Period 1.35 years 1.01 years
3.2 LNG as fuel for ship enginesThe technology for using LNG as fuel is not new as it is used by LNG carriers. However itis not widely used in other ships save for some ferry businesses in Norway and Japan, anda few North Sea offshore support vessels. Norway is keen to promote LNG as a fuel sinceit is much less polluting than diesel. Diesel/LNG dual-fuel engines are available as newproducts or as retro-fit.3.2.1 PolicyLNG as fuel is an obvious choice to meet emissions requirements of MARPOL Annex VIECA areas.3.2.2 ChallengesShip owners are reluctant to invest in LNG based ships without a reasonable infrastructurein place, on the other hand LNG suppliers are reluctant to invest in this without a securedemand for LNG.3.2.3 OpportunitiesThe technology for using LNG already exists and has been implemented in LHG carriersfor many years.A DNV project has shown that a concept VLCC design running on LNG would have thefollowing benefits over a traditional VLCC: • emit 34% less CO2 emissions • 82% less NOx • 94% less SOx • eliminate entirely the need for ballast water • eliminate entirely the venting of cargo vapours (VOCs) • use 25% less energyThe use of LNG in a single- or duel-fuelled engine also dramatically reduces theproduction of SOx and NOx particles.LNG can be used for cooling the engine intake air,allowing a more air into the cylinder before combustion. Cooling from theLNG can also beused to prevent the loss of cargo (crude oil) via the evaporation of VOC vapour leaking toatmosphere. A heat exchanger using LNG cools the vapour from the cargo holds so thatthey condense back down to liquid form. These ‘light fractions’ can be stored for selling atport or can be used to drive the engine.DNV estimates a cost saving of 45% over a 20 year period compared to using Heavy FuelOil. However one of the stumbling blocks to the uptake of LNG is the relatively limitedavailability of LNG. Ship owners are reluctant to invest in LNG based ships without areasonable infrastructure in place, on the other hand LNG suppliers are reluctant to investin this without a secure demand for LNG.The German Classification society Germanisher Lloyd have guidelines for using gas as aship fuel which have already come into force.
3.3 Offshore Wind EnergyOn-shore wind energy technology is well developed whilst the same is not true of offshoretechnology. In addition there are logistical issues with offshore wind installation andmaintenance which are not relevant for onshore wind. The offshore wind industry isunusual in that it requires the whole marine supply chain.Offshore wind can be categorised into shallow water (up to about 50m water depth) anddeep water installations. A deep-sea installation may operate from a floating platform andwill obviously require longer transmission lines to reach the end user and a mooringsystem.3.3.1 PolicyIn 2007 more than 40% of the new electricity generation capacity was from wind. While alarge proportion of this was onshore installations at sea will become increasinglyimportant. In theory the energy available could meet the entire electricity demand forEurope (5). Offshore wind can make a significant contribution to all three of the keyobjectives of the New Energy Policy: reducing greenhouse gas emissions, ensuringsecurity of energy supply, and improving EU competitiveness.3.3.2 ChallengesOffshore wind is relatively expensive and technologically underdeveloped compared toonshore wind meaning that investors have been cautious. Turbine manufacturers tend notto have experience of offshore application. In addition there are several bottlenecks in thesupply chain [EC COM(2008) 768] : • Limited availability of turbine components • Affordable installation vessels • Suitable harbour facilities • Skilled personnel • Equipment infrastructure • Lack of access to grid connection points at sea. There is little or no demand at the point of production. • Little experience of applying environmental legislation to offshore industry (e.g. “Birds”, “Habitats” and “Environmental Impact Assessment”At the moment the offshore wind industry competes on one hand with onshore industry forturbine components whilst on the other hand it competes with the oil and gas explorationindustry for equipment and expertise. CESA and EWEA have urged the EuropeanCommission to develop programmes and funding mechanisms to ensure that there issufficient infrastructure to support the offshore renewable industry. They argue thatUS$7.87bn is needed for the building of heavy turbine installation vessels (TIVs) cablelaying vessels to support the offshore wind industry.Design and operation challenges include forces and interactions of sea and wind on theinstalled structure; the mooring system design and the risk of collision of floating platformswith passing ships.
3.3.3 OpportunitiesAlthough the onshore wind energy industry is fairly mature the offshore industry presentschallenges which shipyards are suited to meet.Offshore wind energy has higher installation and maintenance costs compared to onshoresystems but it has a number advantages. • Offshore turbines can be larger than those onshore due to the difficulty and logistics of transporting large components by land to an onshore installation site. • Offshore winds are typically stronger and more stable. • Turbines at sea generally cause less concern for stakeholders in the region (e.g. noise, visual impacts)The UK government has stated a need for 33GW of installed power by 2020 (6) and theyhave also set aside £60m for establishing world class offshore manufacturinginfrastructure for offshore wind energy at port sites in England. There are separatedevolved agreements for ports in Scotland, Wales and Northern Ireland. Applications willbe welcome from manufacturers, or joint applications from manufacturers and ports.Offshore wind manufacturers will be able to apply for support for major investments andfunding will be available from April 2011 to March 2015 (7).Offshore projects will create an opportunity for grid lines that connect both new generationcapacity and establish or increase transmission capacity between different regions –however cross-border synergies are not currently being exploited (5)].3.4 Tidal/Wave EnergyThere are two established techniques for harvesting energy from tides : • Tidal Barrage – a dam retains water on an outgoing tide and generates power on the head of water • Tidal stream generator – using a submerged turbine or oscillating deviceA tidal barrage has a large generating capacity (for example a proposed barrage on theriver Severn, UK could generate 17TWh (4.4% of UK demand). However it involves hugecivil works and can be hugely detrimental to the local environment. For example the loss of75% of the inter-tidal habitat (which is internationally protected).Tidal stream generators divide into two categories: turbine and oscillating device. Theturbine device is similar in design to a commonly seen wind generator whilst an oscillatingdevice may have blades which alternately move up and down.3.4.1 OpportunitiesPulse Tidal have a 100kW device operating on the river Humber, UK and plan to install a10MW system off the Isle of Skye in 2012.In February 2010 The Carbon Trust announced £22m to support six marine energyprojects from it’s Marine Renewable Proving Fund (8).3.5 Arctic Resources
Figure 1 Map of Artic Oil&Gas Resources (from USGS)In 2008 the US Geological Survey estimated that there were 90 billion barrels of(technically recoverable) oil in the North of the Arctic Circle. In addition they estimated1,670 trillion cubic feet of natural gas and 44 billion barrels of technically recoverablenatural gas liquids. These resources were contained in 25 geographical areas. These Articresources account for 13% of the world’s undiscovered oil, 30% of the undiscoverednatural gas and 20% of the undiscovered natural gas liquids in the world.3.5.1 PolicyNo-one owns the Arctic region : countries which surround the region are limited to a370km (200 nautical miles) economic zone from their coast. These countries are Russia,Norway, Greenland, Canada and the United States. Under the United Nations Conventionof the Law of the Sea Russia, Norway, Canada and Denmark (via Greenland) are trying tolay claim to certain territories in the Arctic region. (Although the USA has been involved inthe Law of the Sea Convention it has not ratified it).The Arctic is comparatively free off pollution although it does suffer from ‘long range’pollutants carried by prevailing global winds and sea currents. In some areas the pollutantlevels are greater than urbanised regions.3.5.2 ChallengesEnvironmental concerns: The World Wildlife Fund (WWF) defines 200 globalecoregions. These are a “unit of land or water containing a geographically distinctassemblage of species, natural communities, and environmental conditions.” The Arctic
region contains 11 of these ecoregions, 4 of which are considered to be seriouslythreatened by oil&gas development and transportation (9). These areas are: • the Alaskan North Slope Coastal Plain ecoregion (Arctic National Wildlife Refuge and National Petroleum Reserve) • the Barents/Kara Sea ecoregion • Canadian Low Arctic Tundra • Canadian Boreal Forests ecoregions (the Mackenzie River Valley and Delta).Business concerns: In 2009 Russia warned that disputes over Arctic oil & gas resourcescould lead to armed conflict. Mr Putin said “Many conflicts, foreign policy actions anddiplomatic moves smell of oil and gas. Behind all that there often is a desire to enforce anunfair competition and ensure access to our resources.”In a separate document it statedthat the Arctic resources were important for their energy security and they set out a planfor establishing military bases along it’s Arctic border (10).In August 2010 Greenpeace activists halted drilling from a Cairn Energy rig for two days.Later Cairn admitted that they had spent $185m and had not made a commercialdiscovery of hydrocarbons – this caused a 7% drop in their share price.Cairn Energy may start drilling off Greenland in April 2011. This is two months earlier thanthe usual drilling season. Greenpeace are concerned that difficult weather conditionsincrease the risk of environmental catastrophe especially since Cairn Energy is a smallcompany with no experience in Arctic waters. There are also financial risks. Richard Rosefrom Oriel Securities (stockbrokers), said "Drilling in Greenland is still seen as high riskgiven the lack of drilling to date and frontier nature of the acreage. Its a huge opportunitybut I wouldnt describe the market as being confident that it will make a commercialdiscovery. After some positive drilling results last year, Id say the odds have gone from20-1 to 10-1." (11).3.5.3 OpportunitiesBP and Gazprom (via joint venture Slavneft) are investing an estimated $15 - $18bn in thepreliminary development of the Messoyakha field which has 560 million tonnes of oilreserves and 230 billion cubic metres of gas. The capital expenditure target for 2011 is$4.6bn.3.6 Maritime TourismDemand for cruising worldwide increased 110% over the period from 1998-2008 whilst inEurope the figure was 165%. Recreational boat ownership is growing at a rate of 5-10%per annum.A European Commission report on Maritime Tourism focuses on the facilities available on-shore for tourists and recognises the environmental impact of cruise shipping (12). Most ofthe port calls are in the Mediterranean. Piraeus has the largest number of port calls at 900whilst Barcelona receives the greatest number of passengers (1,600,000 annually).The report also looks at the investment into ports. This investment divides into facilities fortourism and those which reduce the environmental footprint.On the topic of technologies to reduce the environmental impact of maritime tourism thereport focuses on shore-side electricity (“cold ironing”) and compares it to two ship-based
systems: sea water scrubbing (SWS) and selective catalytic reduction (SCR). Shore-sideelectricity has the advantage that it eliminates airborne emissions and noise from the ship.However, since the electricity must be produced somewhere the overall reduction inemissions is not so large. Using a cost-benefit analysis which measures societal benefitsin Euros so that they may be compared with investment costs the report finds that shore-side electricity gives a benefit ratio of €1.84 – that is to say that for every €1 invested thesocietal benefits are €1.84. (This is not a value, just a unit of measurement). For SCRand SWS the figures are €15.42 and €6.55 respectively indicating that shore-sideelectricity is less beneficial. The reasons for this are that EU regulations require a lowsulphur fuel so the emissions from the ship are not that much greater than from shore;SCR and SWS reduce emissions at sea and at shore; there is no time required forconnection/disconnection.3.7 Ship Slow steamingShip operators started to operate “slow steaming” on their routes in response to fuel priceincreases and economic slow-down. Traditionally container ships would steam atmaximum speed to their destination and then may have to wait at port for or anchor out ofport for a few days before unloading/proceeding to their next destination. The thinkingbehind slow steaming it is that it is more beneficial to operate a ship at lower than normalspeed and reduce fuel consumption and port costs.Traditionally it has been thought that slow-steaming will be a permanent feature ofcontainer shipping however 47% of the trans-pacific strings are choosing not to slow down.Brokers have suggested that this may be due to the current shortage of 400teu containers.According to Maersk Line chief operating officer Morten Engelstoft, slow steaming is apermanent and industry-wide shift that will not be abandoned after the economic recovery(13).Dr. Hermann Klein of Germanischer Lloyd also believes that rather than returning to fullspeed, shipowners would demand vessels with a more flexible optimum speed to allowowners to react more efficiently to market demand.3.7.1 ChallengesShip main engines are optimised to run at a particular load and therefore operating a slowsteaming regime on an unmodified engine decreases it’s efficiency. Engine manufacturerssuch as Wärtsilä have developed a ‘slow-steaming package’ which can be retro-fitted totheir some of their engines. This enables the engine to run optimally at a range of speedswithout a permanent de-rating of the engine. It gives a better combustion at lower loads(down to 20% load in the case of the Wartsila retrofit system) leading to lower fuelconsumption and lower engine component temperatures a wider range of optimum engineoperating point meaning that the engine can operate more efficiently in the slow-steamingregime.3.7.2 OpportunitiesOpportunities may be limited since this type of retro-fit is undertaken by service engineersfrom the engine manufacturer.
3.8 BrazilMany companies are increasing their presence in Brazil to take advantage of it’s growingoffshore industry. Two shipyards have been built to service orders from the governmentowned Transpetro. Transpetro are the largest shipowner in Latin America and the mainfuel transport and logistics company in Brazil. The shipyards are Estaleiro Atlântico Sul(EAS) and Estaleiro Promar S.A (14) Estaleiro Promar S.A. is a jointly owned subsidiary ofSTX and PJMR. Some contracts awarded in 2010 include: • Hamworthy: design and supply of cargo handling systems for eight LPG tankers operated by Petrobras • Roll-Royce: £15m contract for the supply of propulsion and control systems for seven newbuild offshore vessels. The vessels are being built in Brazil • Keppel Offshore and Marine (Singapore) delived an FPSO conversion under contract from SBM Offshore N.V. and Petrobras Netherlands B.V. The FPSO is for the Jubarte field, Brazil. • STX Norway Offshore and PJMR will invest around US$100m over 3 years to support the building of more complex vessels. They will set up a new shipyard in Brazil (Forteleza, Ceará state) with an area of 320,000m2 which will employ 1500 people in addition to subcontractors. The capacity will be about 20,000tonnes of steel per annum. • This year DOF have signed contracts for a total of 7 new builds altogether worth $1,200m.3.8.1 ChallengesAccording to Paul Bartlett (15) offshore companies in Brazil face some challenges:overheads are higher and regulations can be difficult to comply with ( e.g. the requirementto employ a certain number of Brazilians when Brazilian personnel are in short supply andproductivity can be an issue).3.8.2 OpportunitiesBrazil lacks a ship repair infrastructure which will be a problem in coming years given theincreasing number of vessels operating there. DOF ASA operate a fleet of 67 vesselscomprising of anchor handlers, platform supply vessels and subsea construction vesselsand they are increasing their presence in the region. Chief Executive Mons Aase said thatgrowth seen in 2009 had continued in 2010 (15).3.9 RussiaTraditionally Russia shipyards worked almost exclusively on naval projects; merchantshipbuilding work was carried out in other countries such as Poland, Finland, EastGermany and Ukraine. Russia shipyard capacity is huge and only third of this is beingutilised, the government is therefore keen that Russian commercial shipping companiesplace more orders with Russian shipyards. The state owned shipbuilding company is JSCUnited Shipbuilding Corporation (“USC”) and their goal is to strengthen commercial
shipbuilding in Russia but they will be starting from almost nothing and they will needforeign help to achieve this.However they have identified a need for service vessels for the Shtokman gas field andPacific shelf projects; commercial ships and ice-breakers for Artic shipping routes which isexpected to increase 400% over the next 10 years3.9.1 PolicyUSC estimates a requirement for 1400+ commercial vessels in the period to 2020. Theseare:Vessel Type QuantityIcebreakers (Nuclear + Conventional) 24Research vessels 27Offshore Platform-mounted nuclear power plants 7LNG Carriers 25Exploration and drilling rigs 54Supply/Auxiliary vessels 90Tankers (> 70,000dwt), bulkers, mulit-purpose 230Passenger and freight ro-ro vessels 30Fishing vessels 180River vessels, mixed river/sea, industrial ships, Russian Federal Supervision 750Service vesselsAccording to UKTI Russia is looking for foreign help to build up it’s shipbuilding market.Rolls Royce has established a sales office in St. Petersburg, Singapore and Korea are onboard and Germans and French have shown interest. (16)3.9.2 ChallengesThe problem that Russian shipyards face is that they are not big enough to produce80,000 dwt Panamax containers which are the most commonly required. Also many of theshipyards do not have room to expand due to their location.3.9.3 OpportunitiesAs stated, USC will require foreign help to grow their merchant shipbuilding industry sothat they can service their oil and gas interests.3.10 IndiaIndia has a large but disorganised ship repair market with an estimated value of $500million. The overall shipbuilding market in India is projected to be around $20 billion by2020 (17). Ship repair consist mainly of small shops which are unable to offer a “one-stop-shop”. In addition there is a lack of faith or trust in the existing businesses – there is aperception that they are unprofessional. The shipping ministry has asked all major porttrusts to diversify from being just a port to ship repairing business to increase their revenueand provide more repair units to the country. They produced a table of the potential marketmeasured in Rupees crore (crore is a unit in the Indian numbering system equivalent to107) (18)
. Potential (Rs € million Type of ship crore) equivalent Foreign ships on overseas trade visiting Indian Ports 1,400 227.4 Domestic ships on overseas trade 200 32.5 Coastal service vessels 190 30.9 Offshore rig 400 65.0 Naval and coast guard vessels 100 16.2 Other merchant vessels 500 81.2 TOTAL 2,790 453.2In November 2009 it was reported that Goltens aim to target at least 10 per cent of thismarket saying that they estimated an investment of at least $10 million over 3 years (17).They aim to offer professionalism and specialised services.The main market for Goltens is in marine (~75%) with most of this being in ship repair. Buttheir business also includes the operation, maintenance and servicing of power plants.This is a competitive sector but they have an advantage in that they also make the partsfor these plants. This accounts for about 20% of their business and while offshore is about5%. Their main competitors are engine manufacturers since they also carry out enginemaintenance and would like to sell spares. The advantage for Goltens is that they areindependent. They are also trying to set up a training centre in the Philippines and now inIndia, because the majority of seafaring and technical people come from these twocountries.3.10.1 OpportunitiesThe shipbuilding industry could be worth $20billion by 2020 with a requirement forquality/trustworthy service and ‘one-stop-shops’.3.11 Ship Recycling3.11.1 PolicyThe International Convention for the Safe and Environmentally Sound Recycling of Shipswill come into force when it has been ratified by 15 states which is likely to be sometimebetween 2012 and 2015. It will require ships to have an inventory of hazardous materials(IHM) also known as a Green Passport, and will prohibit the use of certain materials in newbuilds. Ship recycling facilities must be authorised and must submit a plan of how a shipwill be recycled which must be approved. Ships flying a flag of a country which approvesthe convention can only be recycled in authorised centres.In 2004 Lloyds Register were the first classification society to issue an inventory ofhazardous materials. They have published a document entitled “Guide to the Inventory ofHazardous Materials (GreenPassport)” (19).
3.11.2 OpportunitiesShipowners which have adopted the convention include FLOPEC, Gulf Energy Maritime(GEM) PJSC, Wallenius Marine AB, Odfjell Management AS and Caledonian MaritimeAssets Ltd (CMAL). They have obtained a Lloyds Register approved Inventory ofHazardous Materials.3.12 Short Sea Shipping and Inland WaterwaysEnvironmental concerns may help to shift the emphasis from road and rail transport toinland waterway and short sea shipping routes. This will increase demand for new buildsand ship repair. According to the European Barge Association only 25% of the inland fleetis less than 20 years old while in the deep sea fleet more than 300 transport ferries aregreater than 30 years old (1).Figure 2 Specific emissions of NOx per passenger-km or tonne-km and per mode of transport, 1995-2009 (20)However, inland shipping is also subject to stringent emissions regulations. Looking at theleft hand side (Freight) of the graph in Figure 2 it can be seen that inland waterway freighttransport performs better in terms of NOx emissions compared with road freight. Howeverthe gap between the two is closing. Referring to Figure 3, in terms of particulate matterinland waterway freight is now has higher emissions than road freight. This is due mainlyto the fuel type used which has meant that the use of gas fuelled engines is becomingmore widespread in coastal vessels. For example Sea-Cargo (Norway) has recently
Figure 3 Specific emissions of PM per passenger-km or tonne-km and per mode of transport, 1995-2009 (20)ordered two ro-ro freighters powered by a single Bergen V12 gas engine (Rolls Royce)and NSK Shipping (Norway) ordered a 70m LNG-fuelled coaster. Rolls-Royce haveproduced a series of new ship designs for coastal and short sea shipping using gasengines and low resistance hull forms. It is claimed that the new hull forms are 20-30%more efficient. The designs have come out of a Norwegian Research project calledNyFrakt (21)B9 Shipping envisage 300dwt sailing cargo ships which could be 100% carbon free usingexisting technology. These could be operational within 24 months (22).3.13 Green shippingWhilst shipping carries 80% of the global trade it only accounts for 3% of CO2 emissions.Ernst-Christoph Krackhardt of the European Marine Equipment Council (EMEC) suggestthat a short term target for green shipping would be to increase the energy efficiency ofships by 30% and in the long term to do so by 60%.3.13.1 OpportunitiesThere are seven main areas in which to consider improvements on ships to reduce theirenvironmental impact: • Gas emissions (SOx, NOx, CO2 and particulate matter) • Ship waste disposal • Bilge water treatment • Black waste water treatment
• Grey waste water treatment • Ballast water treatment • Underwater coatingsIn terms of new-build ships, additional technologies that might be considered arealternative forms of ballast and light-weight materials. The main barriers to theimplementation of lightweight materials are fire safety and class regulations which may lagbehind the technology. Traditional methods and equipment may hinder the implementationand a Life Cycle Assessment may have to be undertaken to justify the technology.3.13.2 PolicyEMEC have written a guide to the equipment available for the greening of ships. For eachissue the guide is divided into the legal basis (if any) relating to the issue, a statement ofthe problem and possible solutions/mitigations. The guide is available at http://www.emec-marine-equipment.org/green/4 Bibliography1. CESA. Annual Report 2009-2010. 2009-2010.2. IMO “Special Areas under MARPOL” . www.imo.org. [Online] Jan 2011. IMO “SpecialAreas under MARPOL”http://www.imo.org/OurWork/Environment/PollutionPrevention/SpecialAreasUnderMARPOL/Pages/Default.aspx.3. www.dieselnet.com/standards/inter/imo.php. www.dieselnet.com. [Online] Jan 2011.www.dieselnet.com/standards/inter/imo.php.4. Sørensen, Kim. Exhaust Gas Cleaning, Aalborg Industries. [pdf] December 2010.5. European Commision. EC COM(2008) 768. 2008.6. Offshore Marine Tech. 2010, 4th Qtr 2010.7. DECC. http://www.decc.gov.uk/en/content/cms/news/pn10_111/pn10_111.aspx.[Online] 2011. http://www.decc.gov.uk/en/content/cms/news/pn10_111/pn10_111.aspx.8. Carbon Trust. www.carbontrust.co.uk. [Online] 2010.http://www.carbontrust.co.uk/news/news/press-centre2010/2010/Pages/marine-energy-ready-for-mass-deployment.aspx.9. World Wildlife Fund. http://wwf.panda.org/. [Online] 2010.http://wwf.panda.org/what_we_do/where_we_work/arctic/area/ecoregions2/.10. The Times (newspaper). www.timesonline.co.uk. [Online] 14 May 2009.http://www.timesonline.co.uk/tol/news/environment/article6283130.ece.11. www.guardian.co.uk. [Online] 04 Jan 2011.http://www.guardian.co.uk/business/2011/jan/04/cairn-energy-greenland-desire-petroleum-falklands?INTCMP=SRCH.12. EC. http://ec.europa.eu. [Online]http://ec.europa.eu/maritimeaffairs/tourist_facilities/report_en.pdf.13. Lloyds List. http://www.lloydslist.com. [Online] 08 06 2010.http://www.lloydslist.com/ll/sector/ship-operations/article170715.ece.14. A&A Thorpe. Ship Repair Journal. 2010a, Aug/Sep.15. —. Ship Repair Journal. 2010b, Oct/Nov.16. Corcut, Paul. Russias New Shipbuilding Industry. SMI Annual review. 2010. pp. 31 -34. http://www.maritimeindustries.org/news/files/SMIAnnualReview2010.pdf.17. Project Monitor. [Online] 2009. http://www.projectsmonitor.com/PORT/goltens-aims-to-be-a-major-player-in-indian-ship-repair-market.