Legislators have expressed support for a proposed law that will require all ocean-going vessels to switch to cleaner fuel (only) while at berth in Hong Kong.
Authorities say this could reduce emissions of sulphur dioxide city-wide by 14-percent. The legislation is expected to take effect in 2015.
Wu Chi-wai of the Democratic Party said it’s a good step forward, but he hopes similar rules can be implemented quickly throughout the Pearl River Delta region.
Many shipping companies are concerned about the cost of using low-sulfur fuel in Hong Kong
The cost of shifting to low-sulfur fuel is a factor in the low participation of Hong Kong‘s government initiative to promote fuel-switching at its port, South China Morning Post reports.
As part of efforts to reduce air pollution, since September 2012 the city-state’s government has offered rebates for ships that use low-sulfur fuel during their port calls there, but the payments are said not to be enough to compensate for using the more expensive fuel.
The report said only 13 percent of the ocean going vessels calling in Hong Kong have registered for the Environmental Protection Department (EPD) scheme.
“There is a significant financial commitment to switching fuel,” said Roberto Giannetta of the Hong Kong Liner Shipping Association.
A spokeswoman for Evergreen Marine said just one of its container ships was registered because of “cost saving considerations.”
Fair Winds Charter
More than 560 ships participate in the low-sulfur program launched in September, and about 18 shipping lines are part of the Fair Winds Charter, which requires them to use low-sulfur fuel “to the maximum extent possible” over a two-year period starting at the beginning of 2011.
Some shippers, including APL and Hanjin Shipping, have signed the Fair Winds Charter but have not yet registered any ships with the EPD incentive scheme.
“I know one prominent carrier who is switching fuel in Hong Kong, but does so quietly”
Roberto Giannetta, Hong Kong Liner Shipping Association
Giannetta said some carriers also have non-financial reasons for not taking part in the program.
“I know one prominent carrier who is switching fuel in Hong Kong, but does so quietly without joining the charter or the government scheme because if they do so here in Hong Kong, they would face tremendous pressure in their home country to do the same,” he said.
“Yet there are specific reasons why they don’t want to do that at home.”
Shipping lines that participate in the low-sulfur programs have called for the Hong Kong and Guangdong, China governments to make use of low-sulfur fuel mandatory.
Maersk Line recently said it would stop using low-sulfur bunkers in Hong Kong unless the government regulates its use to stop shippers who don’t switch getting a cost advantage.
Ship & Bunker News Team
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Submitted by admin on Sep 26th 2012, 12:00am
Comment›Insight & Opinion
From today shipowners and operators can claim a 50 per cent reduction in port facility and light dues for switching to low-sulphur diesel while their vessels are docked in Hong Kong. The potential sacrifice of port revenue is a drop in the harbour when you consider that a five-year study attributes at least 519 deaths a year in the Pearl River Delta region, including 385 in Hong Kong, directly to sulphur dioxide emissions from ships, not counting deaths from the long-term health effects of exposure.
Making it compulsory to use low-sulphur fuel would have been a better option, as other major ports have found. Failing that, the three-year incentive programme is one government giveaway that few would object to, since it would save lives and help contain shipping costs. It follows the launch in 2010 of a purely voluntary scheme by 17 shipping lines that expires soon.
Given the co-operation so far of owners, operators and agents, it seems scarcely believable that the new scheme could be scuttled bygovernment red tape, such as applying afresh for the subsidy each time a vessel calls here, and lodging certified documents including engine log books by specific deadlines after a ship has departed. A shipowners’ spokesman asks whether they should pay money to comply with bureaucratic and sometimes impossible procedures to qualify for a subsidy that covers only part of the cost of the fuel switch.
While ship emissions are responsible for only 18 per cent of sulphur dioxide in the city’s air, they reach residential areas easily because they are released at a lower level. Think tank Civic Exchange estimates 3.8 million people are at risk of excessive exposure. Untangling the red tape seems like a case that should be delegated to new environment undersecretary Christine Loh Kung-wai, founder of think tank Civic Exchange, which conducted the five-year study of health effects jointly with the University of Hong Kong and the University of Science and Technology. Hopefully she can convince the government to make the fuel switch mandatory rather than risk losing shipowners’ co-operation with a half-baked solution.
Sulphur dioxide emissions
Source URL (retrieved on Sep 26th 2012, 5:52am): http://www.scmp.com/comment/insight-opinion/article/1047312/low-sulphur-diesel-fuel-ships-hong-kong-should-be-compulsory
shipping in HKG waters contributes:
31% of Hong Kong’s respirable suspended particulates / 23% of SO2 / 27% of NOx
Does HK offer low sulphur bunker fuel in a like manner ?
If not, why not ?
Sinopec plans low-sulfur fuel for ships
China Petroleum & Chemical Corp, the country’s largest fuel supplier, plans to supply low-sulfur shipping fuel at Chinese ports as ships sailing to the US and Canada are required to burn the cleaner fuel.
Sinopec, as China Petroleum is known, is arranging barges, tanks and pipelines to supply shipping fuel, or bunker, containing 1 percent sulfur, Zhou Yiqing, the vice manager of the bunker department at Sinopec Fuel Oil Sales Co, said in an interview by telephone. The company will start with “big” ports, he said, without elaborating.
Ships sailing in US and Canadian waters are required to use bunker fuel with a maximum sulfur content of 1 percent starting this month under air-pollution standards set out by the North American Emission Control Area. Vessels outside the controlled areas can use bunker with a maximum sulfur content of 3.5 percent.
Maersk Leads Shipping Industry Developing Fuels From Waste – BusinessWeek
Posted on February 15, 2012 by admin
Bloomberg Maersk Leads Shipping Industry Developing Fuels From Waste BusinessWeek … algae , encountering “very few problems,” said Jacob Sterling, head of climate and environment at Maersk, which is based in Copenhagen. “The beauty of biofuels is that they work with the engines as they are today,” Sterling said in an interview
Maersk, US Navy Team Up on Biofuels
Shipping firm Maersk and the U.S. Navy are testing algae-based biofuel on the container ship Maersk Kalmar. The ship is en route from Northern Europe to India.
The 300 meter-long (980 feet) container ship has a dedicated auxiliary test engine, which reduces the risks of testing, and its fuels system has special biofuel blending equipment. Maersk says that these two key attributes that make it a suitable vessel for biofuel testing.
During its month-long, 6,500 nautical mile voyage from Bremerhaven, Germany, to Pipavav, India, the ship will use 30 tons of biofuel. Engineers and crew onboard are testing blends ranging from 7 percent to 100 percent.
The team is also analyzing emissions data on nitrogen oxides, sulfur oxides, CO2 and particulate matter from the fuel use, along with effects on power efficiency and engine wear and tear. Tests are scheduled to conclude in early December with an analysis of results following soon thereafter.
In December, the Navy placed the world’s largest advanced biofuel order of 425,000 gallons with Dynamic Fuels LLC, a joint venture between Tyson Foods Inc. and Syntroleum Corporation; and bioproducts company Solazyme Inc. A month prior, it sent a destroyer ship powered bySolazyme’s algae-based fuel on a 20-hour trip along the California coast.
In other biofuels news, FuelCell Energy Inc. has announced a partnership agreement with Abengoa S.A. to develop localized stationary fuel cell power plants. The companies will target markets in Europe and Latin America, and Abengoa will also work to develop a process to let the cells run on liquid biofuels.
Picture credit: Gary Faux/Wikimedia Commons
26 March 2012
Another failure of the Tsang , Tang and Yau administration
In 2010, a group of 17 cruise and shipping lines offered to begin burning more environmentally friendly fuel when docked in Hong Kong’s waterways. Surprisingly, this came at no small expense to their shareholders.
Now, at a time when the shipping industry is suffering from billion-dollar losses, this “Fair Winds Charter” is also in trouble. The agreement is set to expire in December, and without increased support from the government, the revival of the charter is uncertain.
Two of the most prominent involved parties, Orient Overseas International Limited and Maersk Line, both took a hefty slide in profit in 2011. The container shipping industry has been badly battered by high spikes in fuel prices and slowing trade volumes and is still struggling to recover from a $19 billion industry-wide loss in 2009, according to the Wall Street Journal.
Last month, in an attempt to support the Fair Winds Charter, Hong Kong’s government began reducing port dues for shipping companies that switched to low-sulfur fuel at berth. The targeted lines state that this grant would only compensate for about 40% of the costs involved in using the more efficient fuel.
Orient Overseas Container Line has publicly announced that it will continue its clean fuel burning practice after December, but no other companies have done so yet. Maersk officials have stated that their decision is still up in the air, as their participation in the charter cost them more than $1.7 million in 2011.
Traditionally, ships at berth in Hong Kong have burned bunker fuel which produces far more pollution when burned than fuels such as diesel. Though burning cleaner fuel may be more expensive, environmentalists say such costs are a bargain compared to the environmental toll of burning bunker fuel in proximity to Hong Kong’s heavily populated shores. According to a 2007 study by University of Delaware professor James Corbett, pollution caused by the shipping industry kills an estimated 60,000 people a year globally. On top of that, Hong Kong is the third-busiest port in the world, with about 425,000 vessels flowing into the city’s waterways in 2010 alone.
Given the impact of shipping pollution, in recent years, governments in Europe and North America have also begun requiring ships to burn cleaner fuels when entering their waters. Currently, even with the Fair Winds Charter in place, only about 10 percent of ships making port calls in Hong Kong are currently switching to cleaner fuels while at berth. Larger companies that aren’t presently participating in the Fair Winds Charter include companies such as the Mediterranean Shipping Company, “K” Line Logistics and China Shipping.
From: firstname.lastname@example.org [mailto:email@example.com]
Sent: Thursday, June 23, 2011 17:26
To: James Middleton
Cc: firstname.lastname@example.org; email@example.com
Subject: E(11/1515) : Port Strategy – A new dawn
Dear Mr Middleton,
Thank you for your message regarding the maritime air pollution in Hong Kong.
To control emissions from marine vessels, Hong Kong has been diligently implementing the requirements of MARPOL Annex VI, which caps the fuel sulphur content of ships and controls their emissions when operating within Hong Kong waters. All marine vessels operating within the waters of Hong Kong are subject to the requirements, including the fuel sulphur cap.
There are now two Emission Control Areas (ECAs) in operation, one in the Baltic Sea and the other in the North Sea. Another one covering the waters of 200 nm off the coasts of North America will come into force in August 2011. China has not yet designated its waters, including the waters of Hong Kong, as an ECA under the framework of MARPOL Annex VI. Therefore, the Mainland and Hong Kong cannot “enforce” any ECA requirement on vessels within our waters.
As for the Fair Winds Charter, the Government welcomes the ship liners’ voluntary green move. The move provides an opportunity for us to collect data and assess the environmental benefits and implications (for cost and operation) arising from fuel switch at berth. The findings will help us chart the way forward.
Thank you for pointing out the significance of reducing emissions from marine vessels. Hong Kong will keep closely watching worldwide development of maritime emission control policy, technology and measures and will explore the feasibility of introducing them into Hong Kong where opportune.
Tony Y T Lee
Senior Environmental Protection Officer
Air Policy Group
Environmental Protection Department
Shipping Emissions Control Area for Hong Kong and China
How many vessels heading for these ports from the West / to and from Macau pass through Hong Kong’s waters burning high sulphur / high RSP bunker fuel ?
What is China doing to enforce Emission Control Areas for shipping that currently affect Hong Kong pollution by passing within 50 miles of Hong Kong ?
What is Hong Kong doing to enforce Emission Control Areas for shipping within its territorial waters ?
The voluntary Fair Winds Charter is totally insufficient – we need Laws mandating the burning of ULSD in all ocean going and river trade vessels within Hong Kong waters.
We look forward to EPD’s reply.
Clear the Air
World Container throughput http://en.wikipedia.org/wiki/List_of_world’s_busiest_container_ports The World’s busiest ports
3 Hong Kong
‘The Green Port Programme is aimed at encouraging ocean-going ships calling at the Port of Singapore to reduce the emission of pollutants like sulphur oxides and nitrogen oxides. Ships that use type-approved abatement/scrubber technology or burn clean fuels with low sulphur content beyond MARPOL requirements within the port can enjoy a 15 per cent reduction on port dues payable.’
A new dawn
21 Jun 2011
Maersk’s scaled back Hong Kong business was a blow to Modern Terminals
Hong Kong’s status as one of the world’s leading maritime centres is not under threat, but change is coming as Michael King reports
At the start of April this year container giant Maersk cut its calls at the port of Hong Kong by a quarter, from around 30 per week to 22-23. The reason? The carrier said it would be transferring most of the calls to a terminal at the port of Nansha near Guangzhou in southern Mainland China which is partly owned by sister company APM Terminals.
The transfer was a huge blow both to Modern Terminals, which handles most of Maersk’s calls at Hong Kong, and to Hong Kong’s status as the region’s leading container hub. More blows could follow.
The port lost its status as the world’s largest container port back in 2004 and was ranked third according to 2009 throughput totals, some distance behind Singapore and Shanghai. The ports of Shenzhen and Guangzhou, located over the border in Mainland China, were fourth and sixth in the rankings.
Last year the port of Hong Kong handled 23.7m teu, again putting it in third place although the figure was still below the record set in 2008 pre-global financial crisis.
The critical ingredients for supply chain operators when it comes to choice of port cover a range of factors including liner service availability, consolidation options, speed and cost.
For forwarders adept at finding the path of least resistance and lowest cost, Hong Kong’s traditional appeal compared with using ports in southern China – and this also explains the dominance on export lanes of Hong Kong International Airport compared with airports Guangzhou and Shenzhen – has been its embrace of modern business practices which extends across government bodies and its trading bureaucracy.
Even though it has often been one of the most expensive ports in the world to load it has remained the first choice for most shippers and lines because of its excellent connectivity and service levels.
Its location to the ‘world’s factory’ region of southern Mainland China has also, clearly, been a major factor in its success. Yet China’s import and export patterns are changing. As Maersk acknowledged when it signalled its change in strategy, China is becoming a growing importer and its ‘Go West’ strategy and other policies designed to spread the benefits of economic development ever inland are changing the trading landscape. Lengthening supply chains are giving carriers and shippers food for thought.
Ports in southern China such as Shenzhen and Guangzhou are considerably closer to factories in southern China, and not only do they offer cheaper handling rates but customs offices are attempting to modernise systems with some success. Increasingly, they offer a range of direct, regular mainline connections to the rest of the world, removing the need to tranship using trucks and barge to access Hong Kong’s multitude of international connections.
And, as Paul Tsui, Chairman of the Hong Kong Association of Freight Forwarding and Logistics (Haffa), admits, Hong Kong’s connectivity to western provinces of China is limited, while rival ports in Shenzhen and Guangzhou are increasingly well served by road and rail services.
Maersk Line says it will now serve South China through three gateways at Yantian, Nansha as well as Hong Kong, with Nansha primarily used for traffic to and from the West Pearl River Delta for whom it offers lower trucking and barge costs and less operational risk on hinterland transport because of its direct liner services.
“Nansha also does not have the barge congestion as seen in many other ports in the region during peak season,” a spokesman for the line tells Port Strategy. “Instead of numerous barge sailings with uncertain onwards connections, we will offer fixed connecting windows and thus a reliable end-to-end service.”
Elsewhere in Asia, new deep draft ports are also springing up, most notably at Cai Mep in Vietnam. In a low freight rate environment characterised by slow steaming strategies and excess capacity, direct calls with the largest ships possible are an attractive option for many lines when compared with hub and spoke options. Transit times are also becoming less important for many shippers who have now adapted supply chains and inventory management systems to slow deliveries.
Truong Bui, a senior consultant at Drewry’s Singapore office, says the impact of more direct calls by lines operating on main line trades will have far reaching implications, not just for Hong Kong, but also for Asia’s other transhipment hubs.
In March, for example, the newly opened Cai Mep International Terminal (CMIT), a joint venture between APM Terminals, Vietnam National Shipping Lines and Saigon Port, received a 11,500 teu capacity vessel operated by CMA CGM. The CMA CGM Columba is the largest container vessel ever to call in Vietnam and was en route to North Europe as part of the line’s FAL3 service.
Mr Truong says more deep draft terminals are planned in northern Vietnam which will be able to receive the largest vessels deployed on Asia-Europe and Transpacific trades.
“Now there are more ports available that can take main line calls, lines can call at Vietnam and then head for the US and Europe directly without transhipping.”
The upshot of this trend, he says, is that cargo previously transhipped from Vietnam via Singapore, Kaohsiung and Hong Kong will in future be shipped direct to destination from Vietnam’s own terminals. “Hong Kong will lose market share,” he predicts.
Although unlikely at present, another factor in the future could be the liberalisation of China’s cabotage rules. Singapore-based carrier APL, for example, currently offers 29 vessel calls in Hong Kong each week offering worldwide connections. But a spokesperson says that if cabotage reform was undertaken the carrier would establish hubs in China. “We are in regular dialogue with the relevant parties in China,” she says.
The advantage of a hub is the many and frequent daily onward shipments available and the economies of scale that are generated by volume. Any decline in a hub’s network of services can be damaging. Mr Truong says that if China did change its cabotage rules, Hong Kong could lose a sizeable chunk of its transhipment business.
Although the loss of the Maersk calls could turn out to be part of the carrier’s strategy to win a reduction in port costs, or to support its equity stake at Nansha, if other carriers followed suit then Hong Kong’s unique selling point for customers – its global connectivity – would be impaired.
“I think Shenzhen will overtake Hong Kong this year as the world’s third largest container port,” says Mr Tsui. “Hong Kong has limited opportunity to expand, so it must rely on increasing efficiency. Other ports can expand more easily to take additional services.”