Cruise line CEOs uneasy about looming emissions standard

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MIAMI BEACH — Rising fuel costs, natural disasters and political uprisings are posing significant challenges to the cruise industry, and another headache is on the horizon for cruise line executives — the planned implementation of an emissions-control program that will affect any cruise operating within 200 miles of the North American coast.

The ECA, or Emissions Control Area, was top of mind during a state-of-the-industry panel at the Seatrade Cruise Shipping Convention on Tuesday.

"The 200-mile rule will have a profound effect on all of us," declared Holland America Line CEO Stein Kruse,

Kruse said the new regulation, slated to take effect in August 2012, is a bigger issue for the cruise industry than increasing fuel costs.

The ECA program will be implemented by the Environmental Protection Agency and is expected to include Canadian waters. The EPA said the program is designed to "dramatically reduce air pollution from ships and deliver substantial benefits to large segments of the population, as well as to marine and terrestrial ecosystems."

Seatrade2011Vessels would have to operate using fuel that contains significantly less sulphur, and that potentially means refitting cruise engine systems.

Royal Caribbean International CEO Adam Goldstein, who provided an overview of environmental and technological issues during the discussion, noted that the ECA program would extend to Puerto Rico and the U.S. Virgin Islands.

"It will change our world," he said.

There are technical upgrades that could assist in reducing sulphur content, he said, such as "scrubbers" and other "under the hood" alterations. Down the road, the industry could start using biofuels, said Goldstein.

But all of the executives on the panel (Kruse; Goldstein; Jan Swartz, executive vice president of sales and marketing for Princess and Cunard; Carnival CEO Gerry Cahill; Norwegian Cruise Line CEO Kevin Sheehan; Celebrity CEO Dan Hanrahan; and MSC Cruises CEO Pierfrancesco Vago) agreed that the ECA program represents a major change in the way the lines will select routes and port calls.

Kruse said that the EPA has disregarded the economic impact on cruise operators.

Beginning in 2015, fuel used by all vessels operating in the ECA cannot use fuel exceeding 0.1% sulfur content (1,000 parts per million). This requirement is expected to reduce emissions of particulate matter and sulfur dioxide by more than 85%. 

Before 2015, ships operating in the ECA would be required to use fuel with a sulfur content not exceeding 10,000 parts per million.

In most cases, ships already have the capability to store two or more fuels. However, to meet the 2015 requirement of 1,000 parts per million for sulfur, some vessels may need to be modified for additional storage capacity for distillate fuels.

As an alternative to using low-sulfur fuel, ship operators may choose to equip their vessels with "scrubbers" that extract sulfur from the exhaust.

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