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Cruise industry braces for tighter emissions rules
The Canadian Press
Date: Tuesday Jul. 20, 2010 6:43 PM ET
HALIFAX Some cruise lines are reconsidering voyages to Canada as they brace for tighter emission regulations on the horizon, but one industry expert says they would be unwise to pull out of one of their largest markets.
As of 2012, all ships within 200 nautical miles (370 kilometres) of North American shores will be required to use fuel with no more than one per cent sulphur content. In 2015, that maximum will fall to 0.1 per cent.
The average sulphur content in fuel used by cruise ships is about 2.5 per cent, with the global limit at 4.5 per cent.
Ross Klein, a professor at Newfoundland and Labrador's Memorial University who has researched the cruise industry, says companies will have virtually no choice but to comply with the new emission limits.
"If Canada and the U.S. refuse to back off, is the industry really going to give up 95 per cent of its market and go someplace else?" Klein said.
He noted that stricter regulations already exist elsewhere. In Europe, for example, ships must use fuel with a sulphur content of 0.1 per cent while in port.
The Cruise Lines International Association voiced its concerns to the International Maritime Organization last year after the new limits were proposed, recommending that the 0.1 per cent limit be increased to 0.5 per cent.
The CLIA said the U.S.-based Environmental Protection Agency, which proposed the regulations, had not "adequately predicted the economic costs."
In an article last September in cruise industry publication Seatrade Cruise Review, Tom Strang, vice-president of policy and regulation for cruise line company Carnival Corp., said "every line will be looking at itineraries" because of the additional costs of meeting the fuel requirements.
Earlier this month, British cruise line company Fred. Olsen said it may end service to Canada and the U.S. in 2012, citing increased fuel costs.
The company, which has a fleet of four ships and doesn't visit North America regularly, estimated its fuel expenses would increase by $16,000 a day under the new regulations.
But Klein says other lines that do more business in North America "can certainly afford cleaner fuels."
He pointed to Carnival, which operates 11 cruise lines and reported a net income of $1.7 billion last year.
Aly Bello-Cabreriza, an official with Carnival, said the regulations would add about $50 million to $70 million in costs annually.
Julie Benson, vice president of public relations for Princess Cruises, a subsidiary of Carnival, said Princess would continue to serve North America under the new regulations, noting that they already operate in the North and Baltic Seas, where the one per cent sulphur limit was implemented this month.
But she said Princess would seek to reduce fuel consumption through "itinerary optimization," such as reviewing the number and order of ports visited.
Despite the industry's protests, the International Maritime Organization approved the new sulphur limits in March. Klein said the concerns over fuel expenses were trumped by those of health.
A 2007 study, published in the Journal of Environmental Science and Technology, found that up to 60,000 deaths are caused each year by shipping emissions.
It also found that these deaths could increase by 40 per cent by 2012, due to steady growth in shipping traffic worldwide.
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