Shipping lines that call at U.S. ports will have to comply with much stricter fuel requirements over the next several years, but Southern California’s ports are offering financial incentives to encourage carriers to voluntarily reduce vessel emissions even before the mandates kick in.
The Port of Los Angeles this month announced an incentive program based on the internationally accepted Environmental Ship Index. The comprehensive program encourages emissions reductions achieved through cleaner-burning engines, low-sulfur fuel and adoption of technology enhancements.
Neighboring Long Beach also announced an incentive program, with its plan focusing only on vessel engines. Long Beach will reward carriers that deploy vessels with Tier II and eventually Tier III engines at its port.
The first vessels with Tier II engines, which burn 15 percent cleaner than older engines, arrived last year. Tier III engines will be available in 2016, and will reduce engine emissions by 80 percent.
Oceangoing vessels are the largest source of pollution at many ports, especially because ports have cut back on truck emissions by encouraging, or mandating, the use of clean-diesel trucks introduced since 2007.
Ship operators face a series of deadlines for using low-sulfur fuel. Some European ports already operate under a mandate known as an Emissions Control Area established under the auspices of the International Maritime Organization.
A North American Emissions Control Area will take effect in August. Vessel operators will be limited to fuel with no more than 1 percent sulfur content within 200 miles of the coast. The California Air Resources Board will mandate the burning of fuel with no more than 0.1 percent sulfur within 24 miles of California ports beginning in 2015.
Los Angeles and Long Beach announced their own voluntary incentive programs to encourage vessel operators to move forward even faster with emissions reduction efforts.
The Environmental Ship Index adopted by Los Angeles encourages vessel operators to deploy their cleanest vessels in Southern California, to burn low-sulfur fuel, to equip vessels with the capability of operating from shore-side electrical power at berth and to participate in demonstration programs involving other emissions-reduction technologies.
Vessel operators that adopt some or all of the measures listed in the Web-based ESI will receive financial incentives ranging from $250 to $5,250 per vessel call. “The ESI sets the gold standard for green shipping, and we encourage other ports to follow suit,” said Geraldine Knatz, executive port director at Los Angeles.
The Long Beach program focuses only on the engines. Vessel operators deploying vessels with Tier II engines will receive $1,500 per call. When Tier III engines are available in 2016, vessel operators will receive $4,000 per call in Long Beach.
Lee Kindberg, environmental director at Maersk Line North America, said carriers appreciate that the incentives are offered before mandates take place. She also supports the ports in moving toward internationally accepted standards that provide uniformity for global carriers whose vessels call in many countries.
Opinions vary as to the merits of the incentive programs. Los Angeles potentially offers higher incentives, but the plan requires more intensive record-keeping and filing to claim the rewards.
The Long Beach incentive program doesn’t require extensive administrative costs, because the port is simply informed as to whether the vessels have Tier II or Tier III engines.
The financial incentives may appear to be minimal, given that modern container ships cost $100 million or more. Heather Tomley, assistant director of environmental planning at the Port of Long Beach, said the incentives aren’t meant for the shipping line to recover the cost of a new vessel, but rather to give the lines one more reason to deploy their newest, cleanest ships to Long Beach as soon as possible.
“This plan has a long-term focus. We’re not looking for amazing results in the first year,” Tomley said.
Maersk and other carriers say the financial incentives add up with multiple vessel calls, and carriers benefit from the positive message the ports send out to the trade community when shipping lines go beyond what is required to reduce emissions.
Progress in deploying newer, cleaner vessels will take time, however, because carriers deploy vessels in port rotations based mostly upon the commercial needs of their customers, Kindberg said.