Section 1

Reading Passage 3

Maritime Shipping’s Heavy Fuel Oil Debate

In a world growing more and more concerned with pollution and the accompanying health issues, attention has turned to the heavy fuel oil (HFO) used by the world’s shipping industry. In a densely-populated port city such as Hong Kong, the shipping industry, from local tugs to ocean-going container and bulk cargo vessels, accounts for the largest amount of sulphur dioxide (SO2) emissions as well as the emission of particulate matter (PM), the mixture of minute particles and liquid droplets suspended in air. One estimate put forward is that PM emissions contributed to 87,000 global premature deaths in 2012 and these large port cities like Hong Kong and Busan in Asia, Rotterdam and Antwerp in Europe and Los Angeles/Long Beach in the Americas have borne the brunt of the health issues created by the growing volume of heavy emissions from the maritime industry.

Globally, there are more than 90,000 vessels in the international marine fleet, handling over 90% of international trade. Heavy fuel oil has been the mainstay of energy and propulsion requirements through the second half of the 20th century as global trade has become the lifeblood of economic growth, but it is acknowledged that this same shipping now accounts for nearly 10% of the total emissions of SO2, which has been responsible for the environmentally devastating acid rain, and is a heavy contributor to respiratory problems and other illnesses in humans. In the United States alone, the Environmental Protection Agency estimates that there are 14,000 premature deaths annually owing to toxic emissions, and it is noted that the fuel used by ocean-plying vessels is 600 times dirtier than land transport diesel fuel.

Once it was recognised that there was a strong causal relationship between pollutant emissions and health issues, the International Maritime Organisation, or IMO, a UN agency that sets and regulates industry standards for safety and the environment, began formulating guidelines to determine and control safe standards for emissions. Beginning in 2015, the IMO ruled that the first areas to be designated as Emission Control Areas, or ECAs, would be the Exclusive Economic Zones of North America and Northern Europe, where Marine Gas Oil with a permitted sulphur content of only 1,000 ppm (parts per million) would be allowed. This was a dramatic proposal, as the then-current sulphur content of what are called bunker fuels ranged as high as 35,000 ppm. Further, from the year 2020, the regulation is that all vessels sailing outside any ECA must cap their emissions at 5,000 ppm.

But all this comes at a huge economic cost, not only for the commercial enterprises, but also the shipping companies and, by extension, their shippers, and the national economies of the countries involved. As a result, much research has gone into determining the best approach to ‘clean up’, or even change, the fuel, and ultimately there seems to be two main approaches to comply with the requirements. Firstly, the oil industry would have to drop the sulphur content of the fuel from 3.5% to 0.5%, which would achieve the required emissions levels, or vessels would have to be fitted with what are known as ‘scrubbers’, technology that can clean the emissions. However, it is recognised that the refining industry is not yet moving towards complying with the regulations regarding sulphur content, and as far as scrubbing is concerned, at an estimated US$4 million per engine fit out, the cost is often too high for many shipping countries.

In addition, along with other industries such as land transport and airline companies, much research is being conducted into looking at alternative fuels. For shipping, this revolves around investigating alternative sources such as Liquid (or Liquefied) Natural Gas, solar fuel cells, wind (an ironic twist on where shipping originally began) and the controversial nuclear energy, used in many naval fleets. However, apart from the view that HFO is the cheapest alternative and that the merchant fleet is geared towards the continuing use of HFO, each alternative also presents some challenges. Natural gas takes up a large amount of storage on a vessel, thus reducing cargo-carrying capacity. Likewise, solar fuel cells, although effective, require huge amount of space and wind is not considered reliable enough. Nuclear energy remains a contentious issue, and many ports will restrict or deny entry to nuclear-powered vessels.

At the same time, the international shipping trade is experiencing a serious down-turn in profits. In 2007, the average daily revenue of a merchant vessel was US$34,000 but in 2017 that same figure was just US$9800, according to Clarkson Research, a global shipping consultancy firm. Part of this decline in profits is due to an excess of shipping vessels, but it also relates to the 2008 global financial crisis, and changes in the oil and export markets. All this means there will be a reluctance on the part of ship-owners, national state carriers and major shippers to contribute towards a scheme that, while benefiting the global environment and national health interests, sees little direct economic return.

But the way forward is appearing. Gas-powered vessels are now operating, with its cleaner and more efficient fuel. Which, interestingly, has given rise to what is known as the “fifth fuel”, that is energy efficiency. Because fuel traditionally accounts for up to half of all costs involved in shipping, there have always been innovative energy-saving approaches. One example is that during the 2008 global crisis in finance and costs, sailing speeds on ocean vessels were reduced by oftentimes up to half, which resulted in massive fuel savings. This has given rise to what is known as the Energy Efficiency Design Index, a compulsory outline of regulations that means that all new ships will be required to adhere to it from 2015.

Heavy Fuel Oil, however, will be the backbone of energy for the foreseeable future. If engine scrubbers are deployed, and are as effective as engineered, they can capture more than 90% of exhaust sulphur and they will continue to be the main force in energy requirements. Lloyds Registry, the industry classification organisation, believes that HFO will still make up nearly half of all fuels used in the maritime industry in 2030, albeit with the agreed-upon restrictions set out.

Reading Passage 3

You should spend about 20 minutes on Questions 27 – 40 which are based on Reading Passage 3.

Questions 27 – 31

Complete each sentence with the correct ending, A – I, below.

Write the correct letter, A – I, in boxes 27 – 31 on your answer sheet.

27. Populous port cities, such as Hong Kong,

28. Particulate matter emissions

29. The global merchant marine fleet

30. Guidelines to set safe standards of emissions

31. The sulphur content of bunker fuels

1. have been determined by the International Maritime Organisation.
2. must be capped at 5,000 ppm by 2020 in certain areas.
3. are 600 times more dangerous than other fuels.
4. suffer from high levels of sulphur.
5. has been as high as 1,000 ppm.
6. were not recognised by the Exclusive Economic Zones.
7. impact severely on large port cities.
8. accounts for 90% of all vessels in international waters.
9. relies heavily on HFO.

Questions 32 – 38

Do the following statements agree with the information given in Reading Passage 3?

In boxes 32 – 38 on your answer sheet write

TRUE if the statement agrees with the information

FALSE if the statement contradicts the information

NOT GIVEN if there is no information on this in the passage

32. The costs involved with ‘cleaning up’ the heavy fuel oil will be met by only the shipping lines.

33. The easiest approach to reduce emissions is to drop the sulphur content of fuel.

34. One alternative fuel source would mean returning to a previous method of power.

35. Nuclear energy is used mostly in naval fleets of many countries.

36. With 90% of international trade being carried on ships, the shipping industry is experiencing huge growth and profit levels.

37. One factor that is slowing down the move to cleaner fuels is that there are no significant direct economic benefits to the parties concerned.

38. The 2008 financial crisis helped introduce cost-saving measures for shipping lines.

Questions 39 – 40

Complete the following sentences, using NO MORE THAN THREE WORDS from the passage.

Write your answers in boxes 39 – 40 on your answer sheet.

• 39 In order to comply with regulations regarding lowering emissions, shipping companies have the option of installing to clean emissions.
• 40 Even with all the restrictions and guidelines, most industry analysts, such as Lloyds Registry, feel that will still be the shipping  industry’s main source of energy in the future.