Stena ups freight rates, plans switch to methanol fueling

SEPTEMBER 25, 2014 — The new sulfur limits that will apply within the North European SECA area from January 1, 2015, are good news for the environment but pose a particular challenge to Gothenburg, Sweden, headquartered ferry giant Stena Line. It has 39 vessels in operation on 23 ferry routes in Scandinavia, around the U.K. and to the Baltics. It is now being forced to increase freight prices as a direct result of increased fuel costs —and is looking to use alternate fuels, including methanol.

"We have a positive attitude to environmental improvement rules as long as they are the same for everyone and are implemented at a rate that we and our customers can handle - but this isn't the case with the new sulfur rules," says Stena Line's CEO Carl-Johan Hagman. "Ultimately, the increasing fuel costs affect the North European export and import industry negatively because a significant share of transports are done by sea."

For Stena Line, the changes mean increased fuel costs of SEK 1 million (about $140,000) per day, or around SEK 450 million (about $63 million) per year as a result of the more expensive low sulfur fuel.

"On the freight side, we thereby have to increase prices by around 15%. We want to be able to deliver the same quality and service and continue our efforts to offer environmentally effective transports. This means that we must charge our freight customers more to compensate for the increased costs," says Mr. Hagman.

Since 2005, Stena Line has worked to reduce its environmental impact through as energy saving program that has successfully reduced vessel energy consumption by 2.5 per cent every year. In parallel with the change to low-sulfur oils, Stena Line is running a number of projects to look at alternative fuels and different techniques for emission purification.

"In early 2015 we will be starting a trial with methanol as a fuel on one of our ferries," says Mr. Hagman. "At the same time we are investigating scrubber technologies and also looking at LNG as a fuel. Naturally, converting and rebuilding our ferries will both take time and cost a lot of money."

According to earlier reports, Stena Line has been looking to switch up to 25 vessels to methanol fuel. In a presentation at Interferry last October, it was reported that the Stena Germanica is the subject of an EU funded full scale conversion that will see all four Wärtsila 8ZAL40S main engines converted to methanol-diesel operation, with the tanks and systems scheduled for installation in the first quarter of this year, conversion of two main engines following in the fourth quarter and the other two in fourth quarter 2015.

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