Green fuel regulations affects cruise ships

New environmental regulations aimed at reducing harmful emissions at sea will result in fewer small cruise ships and simplified itineraries, according to the world’s largest cruise ship operator.

David Dingle, the chief executive of Carnival UK, which operates 11 cruise lines – including Cunard, Holland America and Costa Cruises – described the changes as the “biggest single threat to the cruise industry” and warned they may also lead to an increase in prices.

The new rules, approved by the International Maritime Organisation (IMO) earlier this year, will force cruise lines travelling through low-sulphur zones, known as Emission Control Areas, to use fuel that emits no more than 0.1 per cent sulphur by 2015.

The Baltic, North Sea and the English Channel currently fall within these zones, and all seas within 200 miles of the North American coastline – and the waters around Puerto Rico and the US Virgin Islands – will be added in 2012. Cruise operators believe the Mediterranean is likely to follow.

The US Environmental Protection Agency claims that the changes could prevent as many as 14,000 deaths in the US each year through respiratory illnesses.

The IMO also wants a global limit on sulphur emissions of 0.5 per cent by 2020. Existing controls allow ships to burn fuels that emit up to 4.5 per cent sulphur.

Dingle warned that the regulations, which could cost some vessels an extra £10,000 a day, would have a significant impact on cruise lines. Carnival has previously reported that the changes will add up to £45 million to its annual costs.

“A refined fuel capable of meeting these regulations typically costs twice as much,” he said. “It could mean that older and smaller ships become unprofitable, encouraging operators to gravitate towards big, new ships.”

He also suggested that many operators would run their vessels at a slower speed, spending more time at sea and visiting fewer ports, a strategy Carnival has already implemented on some of Cunard’s transatlantic crossings. Carnival is also reconsidering the number of Baltic cruises it operates, according to Dingle. “We will do our best to avoid raising prices, but operators who run smaller ships will find it more difficult,” he said.

The number of orders for new cruise ships has fallen by about 50 per cent in the last five years, a trend Dingle attributed to caution within the industry, and a need for greater fuel efficiency.

Nigel Lingard, marketing director at Fred Olsen, the small ship specialist that runs a large number of Baltic cruises, said that there were “concerns” about the regulations, and admitted that prices may rise and itineraries may include fewer ports of call.

The company suggested earlier this year that it might stop running its solitary North American cruise in 2012.

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