The IMO just took a significant step toward reducing the use of heavy fuel oil in the Arctic
Last week, Canada, Finland, Germany, Iceland, the Netherlands, Norway, and the United States asked the International Maritime Organization to formally consider the risks of using heavy fuel oil in ships operating in the Arctic. The proposal was supported by the Czech Republic, Denmark, Estonia, France, Poland, Singapore, Spain, and Sweden. No Member State objected—a rarity for the IMO. The IMO will consider concrete proposals on ways to reduce the risks of HFO at the next meeting of its Marine Environment Protection Committee, MEPC 72 in April 2018. A decision on what should be done to mitigate the risks of HFO could come as early as 2019. Advocates are calling for a ban on the use and carriage of HFO as a marine fuel in the Arctic in 2020.
Heavy fuel oil is a type of residual fuel, and it is the densest, most viscous, and most difficult marine fuel to clean up. Reducing the chances of spilling residual fuels, like HFO, in the Arctic would be a big deal. An example of why that’s so: In December 2004, the bulk carrier Selendang Ayu’s engine failed. She drifted and ran aground off the Aleutian Islands in Alaska. Shortly after, in severe weather, she broke in two and began to sink. Tragically, six crewmembers lost their lives, and 1,200 tonnes of residual fuel spilled into Alaska’s National Wildlife Refuge. Oil contaminated the water column, the sediment, and the shoreline. The spill cost over $100 million to clean up, plus an additional $9 million in fines to the ship operator.
Any spill is difficult and expensive to clean up, but cleaning up residual fuels, like HFO, tends to be the costliest. HFO is already banned in the Antarctic because of the risks of using it in polar regions. But in the Arctic, HFO represents 57% of the fuel ships burn and 76% of the fuel ships carry.
In 2015, about 2,100 ships sailed in the “IMO Arctic.” Nearly 900 of these ships operated on HFO, and they burned about 250 thousand tonnes of HFO that year, as shown on the map. In 2020, when the 0.5% global marine fuel sulfur cap takes effect, we project ships will use 260 thousand tonnes of residual fuels, mainly HFO blends, but some ships will install scrubbers and continue to use HFO.
Heavy fuel oil used by ships in the Arctic in 2015. The Arctic region as formally defined by the IMO is outlined in blue. [Sources: exactEarth, IHS, ArcGIS]
But ships don’t have to use these residual fuels. And abandoning residuals in the Arctic would not be very costly—certainly not relative to the costs of cleaning up a spill. In our recent study on alternatives to HFO in the Arctic, we estimated that fueling the entire Arctic fleet with distillate fuels in 2020 would cost ship operators $255 million. Normally, we would expect them to spend $246 million on fuel that year. That is to say: in 2020 and beyond, we could eliminate the use of residual fuel in the IMO Arctic for around $10 million per year, or less than one-tenth the cost of cleaning up the Selendang Ayu spill. That works out to about $11,000 per ship per year to switch them from residual fuel to distillate.
It may be tempting to keep using cheaper residual fuels in the Arctic, but it comes at an ecologic and economic price. Cleaning up a distillate spill is expensive enough; cleaning up the same mass of residual fuel can be up to 7 times more expensive. This means that the economic benefits of continuing to use residual fuel, like HFO, will only continue for so long as ships do not spill it. But accidents at sea are a question of when, not if. The private and social costs of spills are not trivial, and the total costs will be borne not only by the ship’s insurance, but also the ship operator, the ship owner, and the people who depend on the Arctic.
The ICCT will continue to analyze the impacts of abandoning HFO in the Arctic and other ways to reduce the risks of using and carrying residual fuels, like HFO. Keep an eye out for new analyses leading up to the next IMO MEPC meeting in April 2018.