2. 1 Introduction
This report highlights potential international business opportunities in the ancilliary
shipbuilding and shiprepair industries. Since this is a very wide topic the information in the
core of the report should be regarded as an overview and individual organisations should
decide how they might best be able to exploit any opportunities in view of their own fields
of expertise. Additional information may be found by checking the references.
2 Current state of play in the auxiliary maritime industry
2.1 Atlantic Area Region
3. 2.1.1 Spain
Recent years have seen a growing importance of innovation in the Spanish shipbuilding
industry. Research, development and innovation investment in the shipbuilding sector has
increased by about €1bn (about 10% of turnover) over the past four years. The
shipbuilding and shiprepair industry has links with both maritime and non-maritime
industries.
2.1.2 Portugal
Ship repair turnover was €146m which is a decrease of 15%. However Vianayards is
modernising as a response to increased demand from the Navy. Shiprepair activity was in
line with expectations in Q1 of 2010. (1)
2.1.3 UK
The naval sector has seen significant growth including work from the QE2 Class aircraft
carrier, Astute submarine and Type 45 Destroyer programmes. The UK will invest £75bn in
offshore wind energy by 2020. The Marine Industries Strategic Framework was launched
by the government department for Business Innovation And Skills (BIS).
2.1.4 France
CIGAN the maritime industries association was launched in 2009. The French navy market
has seen a tendency toward global fleet contracts. The main shiprepairer DCNS is taking
orders from non-Navy fleets. STX-France S.A. has two yards and delivered one of the
biggest cruiseships in Europe and this received a “6 golden pearls” notation from Bureau
Veritas.
5. 3 Potential Developing Markets
3.1 Exhaust/Airborne Emissions Control
Emission type Region of impact Main effects
Nitrogen Oxide (NO2) Local Health
Regional Acid rain
Global Global warming
Sulphur Dioxide (SO2) Local Health
Regional Acid rain
Carbon Dioxide (CO2) Global Global warming
Particulate Matter Local Health
PM2.5/10
Table 2 Main airborne emissions and their effects
Table 2 shows the main detrimental effects of airborne pollutants caused by shipping and
offshore platforms. These emissions are subject to a wide range of legislation which is
becoming stricter with time. The most notable Maritime legislation is MARPOL (“Marine
Pollution”) Annex VI which covers SOx and NOx and Ozone depleting substance
emissions (others too?). The level of emissions permitted varies for different regions.
3.1.1 Policy
3.1.1.1 MARPOL Annex VI
3.1.1.1.1 NOx and SOx
The revised MARPOL Annex VI sets limits on NOx and SOx emissions from ship
exhausts, and prohibits deliberate emissions of ozone depleting substances. It also allows
for Emissions Control Areas (ECA) for SOx, particulates and NOx. SOx has been
associated with respiratory health problems and MARPOL allows for Sulphur Emission
Control Areas (SECA). The current ECAs are: Baltic Sea (SOx), North Sea (SOx) and
North America (SOx and NOx). (2) The International Maritime Organisation (IMO)
unanimously agreed adopted amendments to MARPOL annex VI amendments and these
came into force on 1 July 2010. The sulphur content of fuel (used globally) will reduce from
4.5% to 3.5% from 1 January 2012. The sulphur content of fuels used on ships in Sulphur
Emission Control Areas (SECA) was reduced to 1% from 1 July 2010 and will reduce
further to 0.1% from 1 January 2015. There are currently two SECA areas: North Sea and
The Baltic Sea. However it is expected that EU countries, USA, Japan, Singapore and
Australia will also be declared SECA by 2015. This will encourage the use of marine
distillate fuels or sulphur emission control measures such as the installation of scrubbers.
There are different standards relating to emissions to air which are known as Tier I, Tier II
and Tier III. These all belong to MARPOL Annex VI.
The regulation also applies to fixed and floating rigs and to drilling platforms.
3.1.1.1.2 VOCs
The MARPOL Annex VI also sets requirements for Volatile Organic Compound (VOC)
management on crude oil tankers. From 1st July 2010 all tankers were required to
6. implement a VOC management plan specific to the ship. This will cover the minimisation of
loss of VOCs for at least the loading, sea-passage and unloading.
3.1.1.2 CO2 emissions
The International Maritime Organisation (IMO) has three parts to it’s work on energy
efficiency and Greenhouse Gas (GHG) emissions, these are: technical measures,
operational measures and market measures. These are voluntary but may become
mandatory via MARPOL Annex VI.
Technical measures include the Energy Efficiency Design Index (EEDI) for ships. This will
require certain efficiency level (measured in e.g. CO2 per ton-km) for different ship sizes
and types. Progressive tightening of the limits will improve technical measures which lead
to reductions in emissions.
The Ship Energy Efficiency Management Plan (SEEMP) aims to improve emissions
through operational means using the Energy Efficiency Operational Indicator (EEOI) tool
for monitoring.
Proposed actions under market measures include contribution schemes for all shipping for
CO2 emissions or only for those ships which do not meet the EEDI requirement. This
would use an emissions trading system. There may also be rebate schemes to take into
account the socio-economic differences between developed and under-developed nations.
In late 2010 the IMO circulated proposed draft regulations to make mandatory the
technical and operational measures (described above). They would be implemented as
ammendments to MARPOL Annex VI. The proposed amendments will be considered for
adoption at the next meeting of the IMO Marine Environment Protection Committee
(MEPC) in July 2011.
3.1.2 Opportunities
MARPOL Annex VI Tier II standards are expected to be met by combustion process
optimization. The parameters examined by engine manufacturers include fuel injection
timing, pressure, and rate (rate shaping), fuel nozzle flow area, exhaust valve timing, and
cylinder compression volume.
MARPOL Annex VI Tier III standards are expected to require dedicated NOx emission
control technologies such as various forms of water induction into the combustion process
(with fuel, scavenging air, or in-cylinder), exhaust gas recirculation, or selective catalytic
reduction. (3)
Scrubbers are an established technology in land based systems with a short payback time.
Aalborg have installed a large scrubber on the Ro/Pax “Tor Ficaria” for its 21MW main
engine. Aalborg Industries (4): used this ship in a case study to determine costs and
payback times for in retro-fit and new-build scenarios :
Costs Retro-fit New build
(USD) (USD)
Capital Cost $2,900,000 $2,900,000
Installation $3,000,000 $1,500,000
Running & Maintenance (inc. 2% of fuel cost) $181,440 $181,440
Payback Period 1.35 years 1.01 years
7. 3.2 LNG as fuel for ship engines
The technology for using LNG as fuel is not new as it is used by LNG carriers. However it
is not widely used in other ships save for some ferry businesses in Norway and Japan, and
a few North Sea offshore support vessels. Norway is keen to promote LNG as a fuel since
it is much less polluting than diesel. Diesel/LNG dual-fuel engines are available as new
products or as retro-fit.
3.2.1 Policy
LNG as fuel is an obvious choice to meet emissions requirements of MARPOL Annex VI
ECA areas.
3.2.2 Challenges
Ship owners are reluctant to invest in LNG based ships without a reasonable infrastructure
in place, on the other hand LNG suppliers are reluctant to invest in this without a secure
demand for LNG.
3.2.3 Opportunities
The technology for using LNG already exists and has been implemented in LHG carriers
for many years.
A DNV project has shown that a concept VLCC design running on LNG would have the
following benefits over a traditional VLCC:
• emit 34% less CO2 emissions
• 82% less NOx
• 94% less SOx
• eliminate entirely the need for ballast water
• eliminate entirely the venting of cargo vapours (VOCs)
• use 25% less energy
The use of LNG in a single- or duel-fuelled engine also dramatically reduces the
production of SOx and NOx particles.LNG can be used for cooling the engine intake air,
allowing a more air into the cylinder before combustion. Cooling from theLNG can also be
used to prevent the loss of cargo (crude oil) via the evaporation of VOC vapour leaking to
atmosphere. A heat exchanger using LNG cools the vapour from the cargo holds so that
they condense back down to liquid form. These ‘light fractions’ can be stored for selling at
port or can be used to drive the engine.
DNV estimates a cost saving of 45% over a 20 year period compared to using Heavy Fuel
Oil. However one of the stumbling blocks to the uptake of LNG is the relatively limited
availability of LNG. Ship owners are reluctant to invest in LNG based ships without a
reasonable infrastructure in place, on the other hand LNG suppliers are reluctant to invest
in this without a secure demand for LNG.
The German Classification society Germanisher Lloyd have guidelines for using gas as a
ship fuel which have already come into force.
8. 3.3 Offshore Wind Energy
On-shore wind energy technology is well developed whilst the same is not true of offshore
technology. In addition there are logistical issues with offshore wind installation and
maintenance which are not relevant for onshore wind. The offshore wind industry is
unusual in that it requires the whole marine supply chain.
Offshore wind can be categorised into shallow water (up to about 50m water depth) and
deep water installations. A deep-sea installation may operate from a floating platform and
will obviously require longer transmission lines to reach the end user and a mooring
system.
3.3.1 Policy
In 2007 more than 40% of the new electricity generation capacity was from wind. While a
large proportion of this was onshore installations at sea will become increasingly
important. In theory the energy available could meet the entire electricity demand for
Europe (5). Offshore wind can make a significant contribution to all three of the key
objectives of the New Energy Policy: reducing greenhouse gas emissions, ensuring
security of energy supply, and improving EU competitiveness.
3.3.2 Challenges
Offshore wind is relatively expensive and technologically underdeveloped compared to
onshore wind meaning that investors have been cautious. Turbine manufacturers tend not
to have experience of offshore application. In addition there are several bottlenecks in the
supply chain [EC COM(2008) 768] :
• Limited availability of turbine components
• Affordable installation vessels
• Suitable harbour facilities
• Skilled personnel
• Equipment infrastructure
• Lack of access to grid connection points at sea. There is little or no demand at the
point of production.
• Little experience of applying environmental legislation to offshore industry (e.g.
“Birds”, “Habitats” and “Environmental Impact Assessment”
At the moment the offshore wind industry competes on one hand with onshore industry for
turbine components whilst on the other hand it competes with the oil and gas exploration
industry for equipment and expertise. CESA and EWEA have urged the European
Commission to develop programmes and funding mechanisms to ensure that there is
sufficient infrastructure to support the offshore renewable industry. They argue that
US$7.87bn is needed for the building of heavy turbine installation vessels (TIVs) cable
laying vessels to support the offshore wind industry.
Design and operation challenges include forces and interactions of sea and wind on the
installed structure; the mooring system design and the risk of collision of floating platforms
with passing ships.
9. 3.3.3 Opportunities
Although the onshore wind energy industry is fairly mature the offshore industry presents
challenges which shipyards are suited to meet.
Offshore wind energy has higher installation and maintenance costs compared to onshore
systems but it has a number advantages.
• Offshore turbines can be larger than those onshore due to the difficulty and logistics
of transporting large components by land to an onshore installation site.
• Offshore winds are typically stronger and more stable.
• Turbines at sea generally cause less concern for stakeholders in the region (e.g.
noise, visual impacts)
The UK government has stated a need for 33GW of installed power by 2020 (6) and they
have also set aside £60m for establishing world class offshore manufacturing
infrastructure for offshore wind energy at port sites in England. There are separate
devolved agreements for ports in Scotland, Wales and Northern Ireland. Applications will
be welcome from manufacturers, or joint applications from manufacturers and ports.
Offshore wind manufacturers will be able to apply for support for major investments and
funding will be available from April 2011 to March 2015 (7).
Offshore projects will create an opportunity for grid lines that connect both new generation
capacity and establish or increase transmission capacity between different regions –
however cross-border synergies are not currently being exploited (5)].
3.4 Tidal/Wave Energy
There are two established techniques for harvesting energy from tides :
• Tidal Barrage – a dam retains water on an outgoing tide and generates power on
the head of water
• Tidal stream generator – using a submerged turbine or oscillating device
A tidal barrage has a large generating capacity (for example a proposed barrage on the
river Severn, UK could generate 17TWh (4.4% of UK demand). However it involves huge
civil works and can be hugely detrimental to the local environment. For example the loss of
75% of the inter-tidal habitat (which is internationally protected).
Tidal stream generators divide into two categories: turbine and oscillating device. The
turbine device is similar in design to a commonly seen wind generator whilst an oscillating
device may have blades which alternately move up and down.
3.4.1 Opportunities
Pulse Tidal have a 100kW device operating on the river Humber, UK and plan to install a
10MW system off the Isle of Skye in 2012.
In February 2010 The Carbon Trust announced £22m to support six marine energy
projects from it’s Marine Renewable Proving Fund (8).
3.5 Arctic Resources
10. Figure 1 Map of Artic Oil&Gas Resources (from USGS)
In 2008 the US Geological Survey estimated that there were 90 billion barrels of
(technically recoverable) oil in the North of the Arctic Circle. In addition they estimated
1,670 trillion cubic feet of natural gas and 44 billion barrels of technically recoverable
natural gas liquids. These resources were contained in 25 geographical areas. These Artic
resources account for 13% of the world’s undiscovered oil, 30% of the undiscovered
natural gas and 20% of the undiscovered natural gas liquids in the world.
3.5.1 Policy
No-one owns the Arctic region : countries which surround the region are limited to a
370km (200 nautical miles) economic zone from their coast. These countries are Russia,
Norway, Greenland, Canada and the United States. Under the United Nations Convention
of the Law of the Sea Russia, Norway, Canada and Denmark (via Greenland) are trying to
lay claim to certain territories in the Arctic region. (Although the USA has been involved in
the Law of the Sea Convention it has not ratified it).
The Arctic is comparatively free off pollution although it does suffer from ‘long range’
pollutants carried by prevailing global winds and sea currents. In some areas the pollutant
levels are greater than urbanised regions.
3.5.2 Challenges
Environmental concerns: The World Wildlife Fund (WWF) defines 200 global
ecoregions. These are a “unit of land or water containing a geographically distinct
assemblage of species, natural communities, and environmental conditions.” The Arctic
11. region contains 11 of these ecoregions, 4 of which are considered to be seriously
threatened by oil&gas development and transportation (9). These areas are:
• the Alaskan North Slope Coastal Plain ecoregion (Arctic National Wildlife Refuge
and National Petroleum Reserve)
• the Barents/Kara Sea ecoregion
• Canadian Low Arctic Tundra
• Canadian Boreal Forests ecoregions (the Mackenzie River Valley and Delta).
Business concerns: In 2009 Russia warned that disputes over Arctic oil & gas resources
could lead to armed conflict. Mr Putin said “Many conflicts, foreign policy actions and
diplomatic moves smell of oil and gas. Behind all that there often is a desire to enforce an
unfair competition and ensure access to our resources.”In a separate document it stated
that the Arctic resources were important for their energy security and they set out a plan
for establishing military bases along it’s Arctic border (10).
In August 2010 Greenpeace activists halted drilling from a Cairn Energy rig for two days.
Later Cairn admitted that they had spent $185m and had not made a commercial
discovery of hydrocarbons – this caused a 7% drop in their share price.
Cairn Energy may start drilling off Greenland in April 2011. This is two months earlier than
the usual drilling season. Greenpeace are concerned that difficult weather conditions
increase the risk of environmental catastrophe especially since Cairn Energy is a small
company with no experience in Arctic waters. There are also financial risks. Richard Rose
from Oriel Securities (stockbrokers), said "Drilling in Greenland is still seen as high risk
given the lack of drilling to date and frontier nature of the acreage. It's a huge opportunity
but I wouldn't describe the market as being confident that it will make a commercial
discovery. After some positive drilling results last year, I'd say the odds have gone from
20-1 to 10-1." (11).
3.5.3 Opportunities
BP and Gazprom (via joint venture Slavneft) are investing an estimated $15 - $18bn in the
preliminary development of the Messoyakha field which has 560 million tonnes of oil
reserves and 230 billion cubic metres of gas. The capital expenditure target for 2011 is
$4.6bn.
3.6 Maritime Tourism
Demand for cruising worldwide increased 110% over the period from 1998-2008 whilst in
Europe the figure was 165%. Recreational boat ownership is growing at a rate of 5-10%
per annum.
A European Commission report on Maritime Tourism focuses on the facilities available on-
shore for tourists and recognises the environmental impact of cruise shipping (12). Most of
the port calls are in the Mediterranean. Piraeus has the largest number of port calls at 900
whilst Barcelona receives the greatest number of passengers (1,600,000 annually).
The report also looks at the investment into ports. This investment divides into facilities for
tourism and those which reduce the environmental footprint.
On the topic of technologies to reduce the environmental impact of maritime tourism the
report focuses on shore-side electricity (“cold ironing”) and compares it to two ship-based
12. systems: sea water scrubbing (SWS) and selective catalytic reduction (SCR). Shore-side
electricity has the advantage that it eliminates airborne emissions and noise from the ship.
However, since the electricity must be produced somewhere the overall reduction in
emissions is not so large. Using a cost-benefit analysis which measures societal benefits
in Euros so that they may be compared with investment costs the report finds that shore-
side electricity gives a benefit ratio of €1.84 – that is to say that for every €1 invested the
societal benefits are €1.84. (This is not a value, just a unit of measurement). For SCR
and SWS the figures are €15.42 and €6.55 respectively indicating that shore-side
electricity is less beneficial. The reasons for this are that EU regulations require a low
sulphur fuel so the emissions from the ship are not that much greater than from shore;
SCR and SWS reduce emissions at sea and at shore; there is no time required for
connection/disconnection.
3.7 Ship Slow steaming
Ship operators started to operate “slow steaming” on their routes in response to fuel price
increases and economic slow-down. Traditionally container ships would steam at
maximum speed to their destination and then may have to wait at port for or anchor out of
port for a few days before unloading/proceeding to their next destination. The thinking
behind slow steaming it is that it is more beneficial to operate a ship at lower than normal
speed and reduce fuel consumption and port costs.
Traditionally it has been thought that slow-steaming will be a permanent feature of
container shipping however 47% of the trans-pacific strings are choosing not to slow down.
Brokers have suggested that this may be due to the current shortage of 400teu containers.
According to Maersk Line chief operating officer Morten Engelstoft, slow steaming is a
permanent and industry-wide shift that will not be abandoned after the economic recovery
(13).
Dr. Hermann Klein of Germanischer Lloyd also believes that rather than returning to full
speed, shipowners would demand vessels with a more flexible optimum speed to allow
owners to react more efficiently to market demand.
3.7.1 Challenges
Ship main engines are optimised to run at a particular load and therefore operating a slow
steaming regime on an unmodified engine decreases it’s efficiency. Engine manufacturers
such as Wärtsilä have developed a ‘slow-steaming package’ which can be retro-fitted to
their some of their engines. This enables the engine to run optimally at a range of speeds
without a permanent de-rating of the engine. It gives a better combustion at lower loads
(down to 20% load in the case of the Wartsila retrofit system) leading to lower fuel
consumption and lower engine component temperatures a wider range of optimum engine
operating point meaning that the engine can operate more efficiently in the slow-steaming
regime.
3.7.2 Opportunities
Opportunities may be limited since this type of retro-fit is undertaken by service engineers
from the engine manufacturer.
13. 3.8 Brazil
Many companies are increasing their presence in Brazil to take advantage of it’s growing
offshore industry. Two shipyards have been built to service orders from the government
owned Transpetro. Transpetro are the largest shipowner in Latin America and the main
fuel transport and logistics company in Brazil. The shipyards are Estaleiro Atlântico Sul
(EAS) and Estaleiro Promar S.A (14) Estaleiro Promar S.A. is a jointly owned subsidiary of
STX and PJMR. Some contracts awarded in 2010 include:
• Hamworthy: design and supply of cargo handling systems for eight LPG tankers
operated by Petrobras
• Roll-Royce: £15m contract for the supply of propulsion and control systems for
seven newbuild offshore vessels. The vessels are being built in Brazil
• Keppel Offshore and Marine (Singapore) delived an FPSO conversion under
contract from SBM Offshore N.V. and Petrobras Netherlands B.V. The FPSO is for
the Jubarte field, Brazil.
• STX Norway Offshore and PJMR will invest around US$100m over 3 years to
support the building of more complex vessels. They will set up a new shipyard in
Brazil (Forteleza, Ceará state) with an area of 320,000m2 which will employ 1500
people in addition to subcontractors. The capacity will be about 20,000tonnes of
steel per annum.
• This year DOF have signed contracts for a total of 7 new builds altogether worth
$1,200m.
3.8.1 Challenges
According to Paul Bartlett (15) offshore companies in Brazil face some challenges:
overheads are higher and regulations can be difficult to comply with ( e.g. the requirement
to employ a certain number of Brazilians when Brazilian personnel are in short supply and
productivity can be an issue).
3.8.2 Opportunities
Brazil lacks a ship repair infrastructure which will be a problem in coming years given the
increasing number of vessels operating there. DOF ASA operate a fleet of 67 vessels
comprising of anchor handlers, platform supply vessels and subsea construction vessels
and they are increasing their presence in the region. Chief Executive Mons Aase said that
growth seen in 2009 had continued in 2010 (15).
3.9 Russia
Traditionally Russia shipyards worked almost exclusively on naval projects; merchant
shipbuilding work was carried out in other countries such as Poland, Finland, East
Germany and Ukraine. Russia shipyard capacity is huge and only third of this is being
utilised, the government is therefore keen that Russian commercial shipping companies
place more orders with Russian shipyards. The state owned shipbuilding company is JSC
United Shipbuilding Corporation (“USC”) and their goal is to strengthen commercial
14. shipbuilding in Russia but they will be starting from almost nothing and they will need
foreign help to achieve this.
However they have identified a need for service vessels for the Shtokman gas field and
Pacific shelf projects; commercial ships and ice-breakers for Artic shipping routes which is
expected to increase 400% over the next 10 years
3.9.1 Policy
USC estimates a requirement for 1400+ commercial vessels in the period to 2020. These
are:
Vessel Type Quantity
Icebreakers (Nuclear + Conventional) 24
Research vessels 27
Offshore Platform-mounted nuclear power plants 7
LNG Carriers 25
Exploration and drilling rigs 54
Supply/Auxiliary vessels 90
Tankers (> 70,000dwt), bulkers, mulit-purpose 230
Passenger and freight ro-ro vessels 30
Fishing vessels 180
River vessels, mixed river/sea, industrial ships, Russian Federal Supervision 750
Service vessels
According to UKTI Russia is looking for foreign help to build up it’s shipbuilding market.
Rolls Royce has established a sales office in St. Petersburg, Singapore and Korea are on
board and Germans and French have shown interest. (16)
3.9.2 Challenges
The problem that Russian shipyards face is that they are not big enough to produce
80,000 dwt Panamax containers which are the most commonly required. Also many of the
shipyards do not have room to expand due to their location.
3.9.3 Opportunities
As stated, USC will require foreign help to grow their merchant shipbuilding industry so
that they can service their oil and gas interests.
3.10 India
India has a large but disorganised ship repair market with an estimated value of $500
million. The overall shipbuilding market in India is projected to be around $20 billion by
2020 (17). Ship repair consist mainly of small shops which are unable to offer a “one-stop-
shop”. In addition there is a lack of faith or trust in the existing businesses – there is a
perception that they are unprofessional. The shipping ministry has asked all major port
trusts to diversify from being just a port to ship repairing business to increase their revenue
and provide more repair units to the country. They produced a table of the potential market
measured in Rupees crore (crore is a unit in the Indian numbering system equivalent to
107) (18)
15. .
Potential
(Rs € million
Type of ship crore) equivalent
Foreign ships on overseas trade visiting Indian Ports 1,400 227.4
Domestic ships on overseas trade 200 32.5
Coastal service vessels 190 30.9
Offshore rig 400 65.0
Naval and coast guard vessels 100 16.2
Other merchant vessels 500 81.2
TOTAL 2,790 453.2
In November 2009 it was reported that Goltens aim to target at least 10 per cent of this
market saying that they estimated an investment of at least $10 million over 3 years (17).
They aim to offer professionalism and specialised services.
The main market for Goltens is in marine (~75%) with most of this being in ship repair. But
their business also includes the operation, maintenance and servicing of power plants.
This is a competitive sector but they have an advantage in that they also make the parts
for these plants. This accounts for about 20% of their business and while offshore is about
5%. Their main competitors are engine manufacturers since they also carry out engine
maintenance and would like to sell spares. The advantage for Goltens is that they are
independent. They are also trying to set up a training centre in the Philippines and now in
India, because the majority of seafaring and technical people come from these two
countries.
3.10.1 Opportunities
The shipbuilding industry could be worth $20billion by 2020 with a requirement for
quality/trustworthy service and ‘one-stop-shops’.
3.11 Ship Recycling
3.11.1 Policy
The International Convention for the Safe and Environmentally Sound Recycling of Ships
will come into force when it has been ratified by 15 states which is likely to be sometime
between 2012 and 2015. It will require ships to have an inventory of hazardous materials
(IHM) also known as a Green Passport, and will prohibit the use of certain materials in new
builds. Ship recycling facilities must be authorised and must submit a plan of how a ship
will be recycled which must be approved. Ships flying a flag of a country which approves
the convention can only be recycled in authorised centres.
In 2004 Lloyds Register were the first classification society to issue an inventory of
hazardous materials. They have published a document entitled “Guide to the Inventory of
Hazardous Materials (GreenPassport)” (19).
16. 3.11.2 Opportunities
Shipowners which have adopted the convention include FLOPEC, Gulf Energy Maritime
(GEM) PJSC, Wallenius Marine AB, Odfjell Management AS and Caledonian Maritime
Assets Ltd (CMAL). They have obtained a Lloyds Register approved Inventory of
Hazardous Materials.
3.12 Short Sea Shipping and Inland Waterways
Environmental concerns may help to shift the emphasis from road and rail transport to
inland waterway and short sea shipping routes. This will increase demand for new builds
and ship repair. According to the European Barge Association only 25% of the inland fleet
is less than 20 years old while in the deep sea fleet more than 300 transport ferries are
greater than 30 years old (1).
Figure 2 Specific emissions of NOx per passenger-km or tonne-km and per mode of transport, 1995-
2009 (20)
However, inland shipping is also subject to stringent emissions regulations. Looking at the
left hand side (Freight) of the graph in Figure 2 it can be seen that inland waterway freight
transport performs better in terms of NOx emissions compared with road freight. However
the gap between the two is closing. Referring to Figure 3, in terms of particulate matter
inland waterway freight is now has higher emissions than road freight. This is due mainly
to the fuel type used which has meant that the use of gas fuelled engines is becoming
more widespread in coastal vessels. For example Sea-Cargo (Norway) has recently
17. Figure 3 Specific emissions of PM per passenger-km or tonne-km and per mode of transport, 1995-
2009 (20)
ordered two ro-ro freighters powered by a single Bergen V12 gas engine (Rolls Royce)
and NSK Shipping (Norway) ordered a 70m LNG-fuelled coaster. Rolls-Royce have
produced a series of new ship designs for coastal and short sea shipping using gas
engines and low resistance hull forms. It is claimed that the new hull forms are 20-30%
more efficient. The designs have come out of a Norwegian Research project called
NyFrakt (21)
B9 Shipping envisage 300dwt sailing cargo ships which could be 100% carbon free using
existing technology. These could be operational within 24 months (22).
3.13 Green shipping
Whilst shipping carries 80% of the global trade it only accounts for 3% of CO2 emissions.
Ernst-Christoph Krackhardt of the European Marine Equipment Council (EMEC) suggest
that a short term target for green shipping would be to increase the energy efficiency of
ships by 30% and in the long term to do so by 60%.
3.13.1 Opportunities
There are seven main areas in which to consider improvements on ships to reduce their
environmental impact:
• Gas emissions (SOx, NOx, CO2 and particulate matter)
• Ship waste disposal
• Bilge water treatment
• Black waste water treatment
18. • Grey waste water treatment
• Ballast water treatment
• Underwater coatings
In terms of new-build ships, additional technologies that might be considered are
alternative forms of ballast and light-weight materials. The main barriers to the
implementation of lightweight materials are fire safety and class regulations which may lag
behind the technology. Traditional methods and equipment may hinder the implementation
and a Life Cycle Assessment may have to be undertaken to justify the technology.
3.13.2 Policy
EMEC have written a guide to the equipment available for the greening of ships. For each
issue the guide is divided into the legal basis (if any) relating to the issue, a statement of
the problem and possible solutions/mitigations. The guide is available at http://www.emec-
marine-equipment.org/green/
4 Bibliography
1. CESA. Annual Report 2009-2010. 2009-2010.
2. IMO “Special Areas under MARPOL” . www.imo.org. [Online] Jan 2011. IMO “Special
Areas under MARPOL”
http://www.imo.org/OurWork/Environment/PollutionPrevention/SpecialAreasUnderMARPO
L/Pages/Default.aspx.
3. www.dieselnet.com/standards/inter/imo.php. www.dieselnet.com. [Online] Jan 2011.
www.dieselnet.com/standards/inter/imo.php.
4. Sørensen, Kim. Exhaust Gas Cleaning, Aalborg Industries. [pdf] December 2010.
5. European Commision. EC COM(2008) 768. 2008.
6. Offshore Marine Tech. 2010, 4th Qtr 2010.
7. DECC. http://www.decc.gov.uk/en/content/cms/news/pn10_111/pn10_111.aspx.
[Online] 2011. http://www.decc.gov.uk/en/content/cms/news/pn10_111/pn10_111.aspx.
8. Carbon Trust. www.carbontrust.co.uk. [Online] 2010.
http://www.carbontrust.co.uk/news/news/press-centre2010/2010/Pages/marine-energy-
ready-for-mass-deployment.aspx.
9. World Wildlife Fund. http://wwf.panda.org/. [Online] 2010.
http://wwf.panda.org/what_we_do/where_we_work/arctic/area/ecoregions2/.
10. The Times (newspaper). www.timesonline.co.uk. [Online] 14 May 2009.
http://www.timesonline.co.uk/tol/news/environment/article6283130.ece.
11. www.guardian.co.uk. [Online] 04 Jan 2011.
http://www.guardian.co.uk/business/2011/jan/04/cairn-energy-greenland-desire-petroleum-
falklands?INTCMP=SRCH.
12. EC. http://ec.europa.eu. [Online]
http://ec.europa.eu/maritimeaffairs/tourist_facilities/report_en.pdf.
13. Lloyd's List. http://www.lloydslist.com. [Online] 08 06 2010.
http://www.lloydslist.com/ll/sector/ship-operations/article170715.ece.
14. A&A Thorpe. Ship Repair Journal. 2010a, Aug/Sep.
15. —. Ship Repair Journal. 2010b, Oct/Nov.
16. Corcut, Paul. Russia's New Shipbuilding Industry. SMI Annual review. 2010. pp. 31 -
34. http://www.maritimeindustries.org/news/files/SMIAnnualReview2010.pdf.
17. Project Monitor. [Online] 2009. http://www.projectsmonitor.com/PORT/goltens-aims-
to-be-a-major-player-in-indian-ship-repair-market.
