Carnival Corp. strikes deal with EPA

By Tom Stieghorst
Carnival Corp. has lifted a cloud over its future in North America — and might well have set a crucial precedent for the cruise industry — by reaching an agreement with the U.S. Environmental Protection Agency (EPA) over pending air pollution rules.

The agreement would allow 32 of Carnival's ships to meet stringent emissions standards set for 2015 by scrubbing their exhaust of pollutants rather than burning costly low-sulfur fuel.

The EPA will allow the ships to burn conventional fuel during a trial period for Carnival's exhaust scrubber technology, which is designed to cleanse emissions of both sulfur dioxide and soot and other particulates.

"This is a significant accomplishment as well as an important milestone for our company," Carnival Corp. CEO Arnold Donald said.

Carnival had estimated its fuel bill would be at least $265 million higher as a result of a 2015 cap on fuel sulfur content of 0.1% in the North American Emissions Control Area (ECA).

It said it planned to spend $180 million on buying and installing the exhaust gas scrubbers through mid-2016. It will spread the technology throughout its three main North American brands — Carnival Cruise Lines, Holland America Line and Princess Cruises — as well as Cunard Line.

Those brands sail 58 of Carnival's 102 ships.

The ships that get scrubbers will use only shore power or marine gas oil when docked in ports in the U.S. and Canada.

In a statement, the EPA said it is committed to allowing the flexible use of advanced technologies to satisfy the health and environmental benefits of the ECA rule. It said that along with the Coast Guard it continues to talk to several marine companies about other technology programs.

The costs of ECA are a threat to cruise markets such as Alaska, where ships mostly sail within the 200-mile ECA coastal zone and low-sulfur diesel is two to three times more expensive than bunker fuel.

Previously, the EPA had rejected an alternative put forth by the cruise industry that would have averaged lower sulfur emissions close to port with higher-than-allowed emissions farther out at sea.
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