Marine Fuels Cold Ironing Saving Fuel and the

Marine Fuels & Cold Ironing: Saving Fuel and the Environment James A. Fawcett, Ph. D. Sea Grant Program and Price School of Public Policy University of Southern California Los Angeles, California June 2013

Cold Ironing and Green Ports • Rationale for Green Ports: – Combating worldwide climate change – Promoting environmental sustainability – Enhancing public (“stakeholder”) involvement – Reducing the impact of the port and its users on the environment

Economics of Green Ports • Market and Non-Market Principles: – Ports Have an Civic Responsibility to: • Internalize environmental externalities • Communicate with those affected by port operations • Incorporate interests of near-port citizens • Seek a favorable balance between jobs and environmental stewardship • Support economic development • Create high-quality jobs – Ports have a National Responsibility to: • Continue to move cargo to benefit the regional and national economies • Be competitive while contributing to global environmental remediation

The Port as Environmental Monitor • Port State Control • Ships may be registered in many countries, some without high environmental standards • But, all ships must use seaports • Seaports can encourage/enforce compliance with safe environmental practices (Paris Mo. U and subsequent including Tokyo Mo. U and Paris Mo. U NIR) • Residents surrounding ports suffer if ports do not enforce safe environmental practices

MARPOL 73/78 • MARPOL establishes an international standard for management of seaborne pollution--some of which applies to ports • Annexes – – – I: Oil II: Noxious Liquid Substances Carried in Bulk III: Harmful Substances Carried in Packaged Form IV: Sewage: reception facilities required in port V: Garbage: reception facilities required in port VI: Air Pollution

MARPOL 73/78 • Port State Control – Applies to Annexes I, III, V and VI • Implemented by IMO Resolution A. 742 (18), in force 03 March 1996 • Amended by MEPC 53/24/Add. 1, Annex 11 (Adopted 25 July 2005) – Extends Port State Control to all vessels regardless of flag

MARITIME AIR POLLUTION

Maritime Air Quality • Primary air contaminants – DPM (diesel particulate matter) • Especially DPM ≤ 2. 5 microns • Diesel soot • Can cause or exacerbate pulmonary distress/disease, especially among children – NOx (oxides of nitrogen) • Component of smog – SO 2 (sulfur dioxide) • Component of smog • Aggravates pulmonary distress

Maritime Air Quality • Causes of poor air quality – Load centering: concentration of vessels at a few large seaports – Operation of auxiliary engines in port: hotelling – Diesel engines in general – Fuel choices (residual fuel oils vs. distillate fuels) – Lack of a workable regulatory regime for internationally flagged ships • MARPOL Annex VI: a permissive standard – Unique meteorological conditions at various ports

Why is Fuel the Problem? • Diesel engines using residual fuel • Usually operating with Intermediate Fuel Oil (IFO) – Can contain up to 35, 000 PPM sulfur (m/m) – Regulated by the IMO through MARPOL Annex VI • Standards for sulfur component of diesel fuel: – Heavy duty truck/bus standard in U. S. (post-2006): 15 PPM (0. 15%) residual sulfur – IMO Annex VI standard (2010): 4. 5% SOx – IMO Annex VI standard (2012): 3. 5% SOx – IMO Annex VI standard (2020): 0. 5% SOx – ECA standard (North Sea/Baltic/N. America): 0. 1% Sox (As of 01 January 2015

Fuel Economics • IFO 180 (RME 180) $661/tonne (3. 5% sulfur, 30 May 2013 Los Angeles) • IFO 180 (RME 180) $610. 5/tonne (3. 5% sulfur, 30 May 2013 Singapore) • Low-sulfur Distillate Fuel (Marine Gasoil or MGO/DMX) $1010/tonne (0. 1% sulfur) (30 May 2013 Singapore)

In Port Sources of Diesel Pollution • “Hotelling” use of ships’ auxiliary diesel engines • Diesel powered yard equipment • Diesel powered locomotives • Diesel trucks used for cargo drayage in and near the port

Remedies for Air Pollution • Requiring ships and terminals to use shore power – In port, ships must shut down auxiliary engines and use shore power – Phase in the practice – Cost to shipowners: ~US$500 -$1500 k per vessel • Install cables and connections to main shipboard electrical supply system – Cost to ports: • Depends upon availability of power at the dock • Additional cost to provide adequate power outlets at each berth

Typical Shore Power Installation—Los Angeles

Typical Shore Power Installation—Oakland

Shore Power (Alternative Maritime Power) in Port of Los Angeles

Alternative Maritime Power (AMP)

Improving Air Quality: Diesel. Trucks (USA) • Retrofit trucks with clean-burning diesel engines • Require the use of low-sulfur (≤ 0. 15% or 15 ppm) fuels • Retrofit yard equipment – Install catalytic converters on diesel engines – Require emulsified low-sulfur diesel fuel – Require electric or hybrid diesel power • Replace yard equipment with clean diesel or hybrid power • Impose a per-container fee to pay for these improvements

Improving Air Quality Diesel Locomotives (USA) • Retrofit locomotives with clean-burning diesel engines • Convert to electric railways • Retrofit yard (switching) locomotives to electric or hybrid – Switching does not require the power of line-haul locomotives – Recharge with onboard diesel when idle – Use diesel power to augment battery when under heavy load

A Fuel Alternative to Low. Sulfur IFO 180 and MGO • At sea or near coastal areas • A new option for carriers • Issues – Price of alternatives – Availability of alternatives – Cost of retrofit for existing vessels – Ability of engines to use multiple fuels in new build

Dimethyl Ether as a Diesel Fuel • Produced from methane – Natural gas – Biomass (waste and agricultural products – CH 3 OCH 3 • Produced into methanol, then to DME via catalytic process • Used in Europe as a substitute for propane • Non-toxic to humans

• Benefits – Ultra low emissions • No particulate emissions • Very low NOx and SOx (no sulfur) – Thermal efficiency equivalent to diesel – Ignition characteristics equivalent to diesel – Can be generated on-site from methanol – Costs estimated at -10% compared to conventional diesel operations

California Ports as One Model • North America ECA requires fuel ≤ 1. 0% sulfur within 200 nm of the coast • California requires fuel ≤ 0. 1% sulfur • Per MARPOL Annex VI – Ship may use any “fitting, material, appliance or apparatus or other procedures, alternative fuel oils, or compliance methods”, which are at least as effective in terms of emissions reductions, as approved by the Party to MARPOL Annex VI

Clean Air Action Plan (CAAP) • Developed by the Port of Los Angeles and Port of Long Beach • Designed to improve air quality in the Los Angeles air basin • Comprehensive air management plan • Available online in Hangul and English at: – http: //www. polb. com/environment/air/caap. asp – Scroll down to link for version in Hangul

Conclusions • Concerns over global climate change will affect maritime fuel use • Cost, energy density, availability and hazard profile will influence the choice of fuels for carriers • Public concerns over air quality and climate impacts will constrain the use of fuels near coastlines • Carriers should be prepared to plan ahead for new rules regarding fuel use