RoRoSECA project: presents tools to help the RoRo shipping sector with sulphur challenges

Friday 09 Jun 17
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Contact

Harilaos N. Psaraftis
Professor
DTU Management Engineering
+45 45 25 15 19

Final workshop - get access to programme and presentations

The final workshop for the RoRoSECA project: Sulphur challenges and solutions was held at DTU June 6 2017. The results of the project was presented and followed by a panel and audience discussion with key actors from the RoRo business.

For the programme and all presentations - please go to the web site www.roroseca.transport.dtu.dk

The introduction of new limits for the content of sulphur in marine fuels 1/1/2015 had the RoRo shipping business concerned and hence the RoRoSECA project was initiated in June 2015. The aim was to identify and assess possible technical, operational, regulatory and financial measures for the mitigation and reversal of the negative repercussions of environmental legislation.

 

So what has come out of the project? A final workshop was held at DTU June 6 this year, discussing just that. 

New limits for the content of sulphur in marine fuels within the European Sulphur Emission Control Areas (SECAs) was introduced 1/1/2015. Before the introduction there was wide concern that RoRo and other short sea shipping companies operating in these SECAs would face substantial additional costs, In fact some companies shut down some of their routes, in anticipation of the new regime. 

The RoRoSECA project, which has just held its final workshop at DTU, set out to investigate the consequenses of the new limits. The project was funded by the Danish Maritime Fund, with the Orient’s Fund providing supplementary funding.

Consequences - and the tools to meet it

As low-sulphur fuel (Marine Gas Oil-MGO or Marine Diesel Oil-MDO) is substantially more expensive than Heavy Fuel Oil (HFO), there is little or no room within the RoRo companies current margins to absorb additional cost. Unlike its deep-sea counterpart, in short-sea shipping a freight rate increase may induce shippers to use land-based alternatives (mainly road). A reverse shift of cargo would go against the EU policy to shift traffic from land to sea to reduce congestion, and might ultimately (under certain circumstances) increase the overall level of CO2 emissions along the entire supply chain.

After two years of research, and in collaboration with DFDS, the RoRoSECA project has now developed a set of tools that can help both RoRo companies and policy makers address the following issues (among others):

  • What is the economic impact of the new legislation?
  • What is the environmental impact of the new legislation?
  • What may be possible modal shifts?
  • What measures can the RoRo operator take to mitigate and reverse the situation?
  • What policy measures are deemed the most appropriate?

Final workshop at DTU June 6 2017

At the final workshop June 6 at DTU a number of key actors from the shipping business participated in a panel discussion on the way ahead, including the implementation of the 2020 0.5% global Sulphur cap and how these rules can be best enforced. 

According to Harilaos N. Psaraftis, Professor at DTU and Project Manager of RoRoSECA, this has been the first attempt to examine the effects of the new SECA limits, and the project managed to dissect them from the record low fuel prices that were observed in the last two years. According to Professor Harilaos N. Psaraftis, the main conclusions of the project can be summarized as follows.

  • Maritime shares actually increased due to observed low fuel prices
  • Maritime shares would have increased further if HFO were still allowed
  • Maritime shares would drop if fuel levels returned to 2014 levels
  • Slow steaming may be a good mitigation measure, but reducing speed is limited by logistical constraints. In 2016 certain routes actually sped up.
  • Frequency of sailing service can be used to improve load factors
  • Swapping vessels in some routes can help with load factors
  • Investing in scrubbers critically depends on fuel prices and level of subsidies
  • The freight rate is the most important component for the shipper, as opposed to transit time, which was deemed not so important
  • Typical annual cost for full mitigation of adverse effect is 2M€  per route
  • Policy measures are sensitive to fuel price
  • BAF (Bunker Adjustment Factor), eco-bonus, and internalization of external costs have similar effects

Potential users of the models developed by DTU include RoRo operators, intermodal operators, other short sea shipping companies operating in ECAs, and maritime policy makers including the EU. 

 

The RoRoSECA project: Mitigating and reversing the side-effects of environmental legislation on Ro-Ro shipping in Northern Europe

The project was initiated with a kickoff workshop on June 15 2015 and will end June 14 2017. The main objective of this project is to identify and assess possible technical, operational, regulatory and financial measures for the mitigation and reversal of the negative repercussions of environmental legislation to the market shares of RoRo shipping in Northern Europe. The project builds upon prior research by the Principal Investigator and his colleagues in recent years and will be under the umbrella of Maritime DTU. 

The main sponsor has been the Danish Maritime Fund, with the Orient’s Fund providing supplementary funding. RoRo operator DFDS has been an industry partner to the project, which also bears endorsements from Interferry and the European Community Shipowners Association (ECSA). 

Results of the RoRoSECA project can be found at its web site, www.roroseca.transport.dtu.dk

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