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emerging risks briefing

shipping cOnTinUed

Regulating carbon from shipping although shipping is the least environmentally damaging form of commercial transport, a recent eU directive has been passed that requires member states to implement legislation which restricts the amount of sulphur in fuels burnt by ships while in an eU port.

The new regulations are part of a broader eU drive to further reduce the environmental impact from shipping and reects wider global initiatives focusing on the same goal.

impact of low sulphur fuel The aim of using low sulphur fuel is to reduce emissions. it goes hand in hand with other efciency improvements such as hull design. however, the legislation only covers vessels while they are in port, which means higher content sulphur fuels are still burnt on the open seas.

switching of fuels can also have serious implications for the functioning and safety of engines. in two stroke engines corrosion can occur with calcium ash build up on the pistons. in four stroke engines, ash can build up on the exhaust valves, turbocharger and combustion chamber. if the fuel is used without the correct equipment or maintenance procedures in place, damage will occur which could materially damage vessel engines and endanger lives of crew members.

as ships are now increasingly technically sophisticated, they must be properly maintained and have the right equipment installed to ensure safe use of these fuels. This all takes time and obviously has a material

  • nancial impact.

A wider impact The full life cycle impact of the reduction of sulphur dioxide emissions from low sulphur fuel needs to be considered.While using low sulphur fuel reduces emissions this could be cancelled out by the potential environmental impact from the additional maintenance and new equipment installed.While no formal studies have been completed into assessing the relative merits of low sulphur fuel, the potential consequences as listed above demonstrate the need to consider environmental regulation in more detail.

How to tackle the issue a good maintenance programme and use of suitable lubricant can help to eradicate the detrimental effects of using the low sulphur fuel.These measures will help lower the risk of potential claims and reassure insurers that the vessels are being properly managed and have the environmental benets realised from the fuels.

it is important that shipping companies have a detailed understanding of the damage that can occur with the use of these fuels and have dened loss prevention and maintenance programmes in place.

nickAndrews,Marine Risk Manage ,RSA

“The shipping and logistics industry has been under immense pressure to cut costs due to the economic downturn.The industry has responded by lowering speeds to conserve fuel, reducing crew sizes and taking ships out of service.

“While slower speeds and less trafc are positive for the environment, lower crew sizes tend to go hand in hand with a reduction in maintenance. This is a concern for insurers and could have implications for safety standards.

“rsa supports initiatives to reduce environmental impacts but it is important to recognise that some regulatory measures do not always deliver what they intended. in the case of low sulphur fuels a proper understanding of their effects on vessel engines must be understood to ensure the savings in sOx are not negated by increased cO2 due to additional repairs and replacement of parts.”

© rsa


  • Impact of retrotting engine and components

  • Lower carbon from sulphur content reduction

  • Increased carbon from extra parts and maintenance

systemIc rIsk


  • Price of carbon

  • Increased maintenance costs

  • Fuel conservation (slower)

  • Reduced crew sizes

emerging risks briefing


  • COP15

  • EU directive

  • Management of fuel switch

  • Preventative maintenance

  • Less care from fewer crew

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