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Asia-Pacific: Shipping – Emissions Reductions All At Sea

Paul French, Ethical Corporation – 5 Dec 08

Ships carry most of the world’s consumer goods, but at huge cost to the environment and human health

The Shinyo Ocean is 354 metres long, 61 metres wide and (depending how full it is) about 20 metres high. It is technically a Very Large Crude Carrier (VLCC) – an oil tanker. It’s certainly a big boat.

We’re carrying 180,000 tonnes of oil from Fujarah in the United Arab Emirates to the port of Mailiao, on Taiwan’s coast, facing directly across the Taiwan strait towards mainland China. The oil is all being delivered to one of Taiwan’s largest companies, Formosa Plastics Group.

This moving island is an expensive piece of property – the boat alone is worth $130m, while even with falling oil prices we are carrying a cargo worth over $60m. In addition, we need 62 tonnes of bunker fuel a day to power the ship. At $800 a tonne that means we’re spending nearly $50,000 a day to keep moving. Factor in the costs of all the lubricants, fresh water and food we need aboard and you start to see how expensive it is to move the “black gold” around the world.

We are miles out at sea but we are far from alone. In a week on the South China Sea we experience only a few hours when there is not another large ship – carrying either containers, gas or oil – within sight.

Increasingly, the world’s shipping fleet is moving eastwards as the manufacturing powerhouses of east Asia spew out everything from T-shirts to camcorders, requiring vast amounts of oil to make them.

Straight and narrow

Currently 80% of commercial sea traffic passes through the Malacca straits, the main route from west to east, between Malaysia and Indonesia towards Singapore. You soon realise that you are just one vessel in a long line of ships heading into east Asia with oil and other raw materials on an ocean highway while container ships of finished goods head in the opposite direction to the waiting markets of the west. It’s a similar story across the Pacific from east Asia to the ports of North America’s west coast.

Taiwan, where we’re headed, is an island of beautiful scenery and stunning coastlines but precious little in the way of oil reserves. Yet it is one of the world’s largest manufacturers of consumer electronics, machinery and chemicals – it’s a safe bet that in your house are a bunch of products marked Made in Taiwan. But with total oil production of about 8,400 barrels per day, the island needs a staggering 1 million barrels to keep its factories running. Taiwan is relies on ships like the Shinyo Ocean making regular deliveries.

For Taiwan, sea delivery of oil is really the only option – as an island, pipelines are problematic, a situation not helped by the simmering disputes between Taipei and Beijing that regularly flare up.

Taiwan is hardly alone in requiring a steady flow of oil tankers to call at its ports. Australia, New Zealand, mainland China and a host of other industrial nations – including the US and the UK – also rely largely on this sea traffic. Yet in comparison with road, rail and plane transport, there has been little discussion of the effects, adverse or otherwise, of this vast seaborne trade on the environment. While aviation has been the focus of environmentalists’ dissent of late, there is an argument that shipping actually is responsible for more greenhouse gas emissions than airlines.

Here’s the problem. In terms of emissions per kilometre, large ships like the Shinyo Ocean are the greenest of transport options. Ships emit roughly – varying slightly according to their size – 15g CO2 per km, while airfreight emits a whopping 540g/km. However, depending how you make the final calculations, shipping emits more than airfreight as the reality is that ships carry about 90% of world trade.

For the vast majority of products, moving them by plane is a luxury at best and an impossibility in most cases. There’s not much alternative – oil, coal, metals and so on are never going to be moved by air. There’s no other way to get all that iron ore from western Australia to China except by boat.

So if we’re not going to see the demise of these giant ships, can we at least make them cleaner?

The Shinyo Ocean’s main problem is the bunker fuel that powers its massive engines. Just about every vessel at sea uses bunker fuel, often also euphemistically termed residual fuel. Arthur Bowring, managing director of the Hong Kong Shipowners Association, says bunker fuel is “the end of the refining cycle, the residue; one step up from the asphalt you put on roads”.

At present bunker fuel is sold to shipowners at a discount of close to $20 on the barrel. Refiners believe this is a win-win situation: owners get cheap fuel and oil majors get rid of their rubbish. But bunker fuel has a high sulphur content, about 2.7% on average, and is just plain dirty. Sulphur dioxides emitted when it burns contribute to climate change and air pollution that harms human health.

According to a peer-reviewed scientific study submitted to the International Maritime Organisation (IMO), air pollution emitted by international shipping will be responsible for 84,000 premature deaths worldwide by 2012 if no measures are taken to cap the sulphur content of bunker fuel. The study – published in the December 2007 edition of the American Chemical Society’s Journal of Environmental Science and Technology – found that if the shipping industry could limit sulphur content to 0.5% by 2012, 50,000 of these premature deaths would be prevented.

This will not happen. As with all other forms of business the global shipping trade has those who want to proactively do something about their emissions and those less keen, who see it as an additional cost that will hit their margins.

Sulphur caps

The Hong Kong Shipowners Association – which represents about 8% of the total global fleet – is a progressive voice within the industry, as is the international independent tanker owner’s organisation, Intertanko. They are proposing global sulphur caps at various levels of about 1%.

Ultimately the less keen can be brought into line through the International Convention for the Prevention of Pollution from Ships, known as Marpol, and the IMO. Shipping is a tough and competitive business and clearly not all shipowners want to move to clean fuel. Making that shift would, incidentally, cut the need for purifiers, heating of fuel tanks, sludge control and emission abatement equipment, and the disposal of residues. Ultimately it would lead to the development of more efficient engines and more sophisticated emission reduction systems. But this is long-term thinking and short-term thinkers simply point to the fact that, depending on oil prices, fuel costs could rise by as much as $200 to $250 a tonne, or 25%-30%.

International agreements combined with lobbying could conceivably force change across the whole industry. But a major stumbling block would be the refiners. Quite simply, they are making a good profit from an otherwise generally unsellable residual product. If shipping did truly go green, what would they do with all the residual fuel? Bowring in Hong Kong says that’s their problem. Speaking for Hong Kong shipowners he declares: “We want regulations on this issue. We don’t want to leave it to the owners as it is very expensive to switch.”

If Bowring and the Hong Kong shipowners make the switch, that will have a major effect on global shipping. Hong Kong is one of the most important shipping centres in the world – a compact city that knows how bad emissions from ships can be. In Hong Kong, ships offload containers close to the city centre and shipping accounts for a high proportion of all CO2 emissions on smoggy Hong Kong Island.

If responsible shipowners start to take a lead, backed up by international agreements, then the global shipping fleet can seriously reduce its total emissions. With the vast majority of the world’s trade moving at some point by ship this would have a major impact on tackling climate change, and saving lives.

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