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Shortsea-Euro June 2014 SeaIntel Maritime Analysis
ECA-Zones: Comply or pay?
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Alan MurphyCOO and PartnerSeaIntel Maritime Analysis
June 10th, 2014Shortsea-Euro
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SeaIntel
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Agenda
Low-sulphur regulations and ECA-zones
Fuel inspections
Fine sizes vs potential savings
Will the ECA-zones lead to more transshipment?
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Low-sulphur regulations and theECA-zones
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Low-sulphur regulations and the ECA-zones
IMO agreement reached in 2006 -> The Baltic Sea became
the first fully SOx Emission Control Area (SECA)
In 2007 the North Sea and the English Channel became thesecond SECA-zones
July 2010 the agreement came into effect, which lowered themaximum allowed sulphur content from 1.5% to 1.0%
On January 1st 2015 this threshold will be lowered to 0.1%
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Low-sulphur regulations and the ECA-zones
Increase the bunker price $180-280 per ton
The new regulations are expected to give significantpollutant emission reductions from the shipping sector.
Emission reductions of more than 90% for SO2 and up to80% for PM (particulate matter) are predicted for the Balticand North Sea.
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Fuel inspections
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Fuel inspections
Two sorts of fuel inspections fuel log inspections or actual
sampling of the bunker fuel
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# fuel samples taken 2013
Country Samples
Denmark 74
Sweden 210
Germany a few*
Netherlands 90
UK 1177
Finland 20
Poland 330
Estonia 30
Norway 60
Lithuania 60
Subtotal 2051
Estimates
France 500
Belgium 60
Latvia 30
Total 2641
*Germany is based on 2012 figures, as number
of 2013 inspections has not been released yet.
We estimate that it means thatroughly 1% of all commercialvessels are inspected bysampling every year
This seems like a fairly highnumber, and it is also mainlykept at this level as the Britishauthorities say they do almost1200 inspections a year.
Sweden, Finland and Norway allplan to increase the number ofinspections in 2015
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Fuel inspections
Only Sweden and Lithuania said they performed inspections
at high seas
Sweden and Denmark are looking into alternative inspectiontechnologies Sweden: Good results with testing the smoke from the vessels by flying
over them in helicopter.
Denmark: Will try to use unmanned drones to test the smoke Denmark: Institute a sniffer on the Great Belt Bridge
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Fine sizes vs potential savings
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Fine sizes vs potential savings
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Country Fines
Denmark
Equal to the cost
advantage thecarrier had on that
voyage
SwedenWill be establish
when the firstcase goes to court
Germany 2,000-5,000 Euro
Netherlands [Declined to
comment]UK Up to 50,000
FinlandWill be establish
when the firstcase goes to court
Poland Up to 45,000 Euro
Estonia Up to 2,000 Euro
Norway Start at 10,000Euro
Lithuania
Up to 1,500 Euro,plus the price of
taken proper fuelon board
Significant differences in the finelevels
Fines do match the potential savingsof not complying
The authorities do have othersanctions than fines
Potential savings (one way)
Destination Savings (Euro)
Rotterdam 7,500
Hamburg 12,000
Gdansk 21,000
St. Petersburg 28,000
An added cost of 180 USD/ton for 0.1% sulphur
fuel has been used.
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Will the ECA-zones lead to moretransshipment?
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Will the ECA-zones lead to more transshipment?
Based on a 14.000 TEU vessel doing 16 kts, and turned-
around in Rotterdam instead of doing a second call inHamburg as well
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Annual fuel cost saving
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Will the ECA-zones lead to more transshipment?
Only if 1,500 TEU or less has to be moved from Rotterdam
further onwards to Hamburg is the transshipment scenariorealistic
Otherwise will the added handling costs at the portssuperseed the savings
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Cost savings per TEU
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Will the ECA-zones lead to more transshipment?
Savings per TEU on the distance cut out of the ECA routing
for the mother vessel E.g. is the distance from Rotterdam to Gdansk and back
1600 nm
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Cost savings depending ondistance sailed
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Conclusions
Fines for non-compliance with the low-sulphur regulations do
not match the potential savings
Unless inspections are conducted more often, especially at highseas, some carriers may be tempted to choose the non-compliance alternative
The low-sulphur regulations could mean that we end up in asituation where non-complying carriers will get a competitiveadvantage
At least the Danish and Dutch Maritime authorities are aware ofthese problems, and are trying to work out a solution with therelevant authorites around the ECA-zones
The ECA-zones will have minimal impact on the transshipmentvolumes
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