Energy & environment

No compromise on compliance

2019 marked huge gains for the cruise sector in terms of environmental commitments, with operators placing sustainable investment at the very heart of their business models. However, in a struggling market, with many lines more focused on short-term survival than long-term benefits, what is the impact on environmental stewardship? Abi Millar speaks to Chris Donald, SVP of corporate environmental compliance for Carnival.

2019 was a watershed year for cruise ships’ environmental performance. With sustainability now far more than a buzzword, the industry took significant steps to improve its green credentials. According to CLIA’s 2019 Environmental Technologies and Practices report, it “made unprecedented, year-over-year progress” in implementing these technologies and practices.

To take a few examples from the report, 44% of new-build capacity will rely on LNG fuel for primary propulsion, a 60% increase in overall capacity over 2018. Eighty-eight per cent of the new ships are being fitted with shore-side electricity systems, allowing them to turn off their engines in port. And every single new ship on order was specified to have advanced wastewater treatment systems, an increase of 26% over 2018.

“While cruise ships comprise far less than 1% of the global maritime community… the industry leads in environmental stewardship,” said Michael Thamm, Chairman of CLIA Europe. “The entire shipping industry benefits from early adoption of innovative technologies by cruise lines, many of which did not exist five to 10 years ago, such as exhaust gas cleaning systems (EGCS), LNG as fuel for passenger ships and shore-side power capabilities.”

This was also a year when the industry was held to account, with Carnival reaching a $20m settlement for pollution allegations, and environmental protestors blockading one cruise ship in Germany. With the IMO 2020 rule due to come into force, and media scrutiny at an all time high, operators reckoned with the business risks of the industry’s polluting image.

“Sustainability is an absolute business imperative that impacts all our actions, going beyond any outside influences or consumer trends,” says Chris Donald, SVP of corporate environmental compliance for Carnival. “If we don’t protect the environments and oceans we all enjoy, we won’t have a business to operate, which is why sustainability is a core value and remains at the heart of everything we do.”

If 2020 had worked out as anticipated, we would doubtless have seen an even greater focus on the environment. IMO 2020, which caps the sulphur content of marine fuel, could well have been one of the biggest stories of the year. And of the new ships supposed to make their debut, many came with well-publicised green features – think Carnival’s LNG-powered Mardi Gras, or Virgin Voyages’ carbon-neutral Scarlet Lady.

“It’s wonderful to welcome Scarlet Lady today,” said Virgin Group Founder Sir Richard Branson, shortly before the ship’s planned maiden voyage in March. “I’m so proud that as we start this exciting journey, we also bring to life Virgin Voyages’ commitment to preserving the ocean and the first of many steps towards a net zero carbon future.”

We all know what happened next. With the industry forced to pause operations, its environmental compliance dropped down the media agenda and the big story was simply ‘Covid-19’. Many of those much-hyped new ships were delayed, while other ships missed out on being retrofitted with scrubbers.

For those in the latter category, the situation has been especially vexing. There was already a backlog in some Chinese shipyards, and Covid-19 exacerbated the situation. A number of ships, then, remain in dry dock with non-compliant fuel on board, meaning they’re unwittingly flouting the IMO 2020 regulation. 

“The IMO does not consider COVID-19 to fall under force majeure. In addition, the ‘unforeseen delay’ clause in MARPOL only applies to new buildings and not alterations/conversions,” warned DNV-GL, an advisor to the maritime industry.

The big question then, is what happens to environmental stewardship during these unprecedented circumstances? Is there really scope to think about green investments when liquidity is at a premium? And with many lines now focused on short-term survival, are they paying attention to long-term sustainability?

For Donald, the answer is a resounding yes. “Throughout this challenging period for the entire world, including travel and tourism and certainly the cruise industry, we have remained committed to our top priorities as a company,” he says. “These are always compliance, environmental protection and the health, safety and wellbeing of our guests, the communities we visit and our shore-side and onboard employees.”

He adds that the company has made significant financial and operational moves to protect its future, and endure this hiatus in operations. (All lines have needed to do similarly, with many facing the biggest existential threat of their history.)

“Even in the face of these challenges, we will not compromise on compliance and will continue in our obligations to comply with all environmental regulations,” says Donald.

This includes maintaining what Carnival calls ‘non-operational manning’ for its fleet, a staggeringly expensive activity. As of September 2020, its ships remain in ‘warm layup’ around the world, which means that around 100 crew members stay on each ship to operate major systems and perform routine maintenance. It falls to these crew members to ensure the ship complies with environmental and safety standards.

“Additionally, we are reinforcing our commitment during this pause in operations to ensure we restart in a compliant manner and sustain compliance longer term,” says Donald. “We are in the process of releasing our 2019 Sustainability Report, which announces that we achieved our remaining targets within our 2020 sustainability goals and have set new goals as part of our initial 2030 sustainability goals.”

Carnival says that in 2019, it achieved a 29.1% reduction in CO2 emissions relative to its 2005 baseline. It introduced its second LNG-powered ship, Costa Smeralda, last year, and expects to release its third (P&O UK’s Iona) in 2020. It has equipped nearly 80% of its fleet with scrubbers, has committed to cutting back on single-use plastics, and recently put together a dedicated ethics and compliance team intended to ‘drive a culture of integrity’. 

As for the delayed Mardi Gras, the lead vessel of the fleet’s new Excel class, its maiden voyage has been pushed back from August 2020 to next February. Known primarily for featuring the first rollercoaster at sea, it will also be the first ship in North America powered by LNG. Carnival plans to add 11 LNG-fuelled vessels to its fleet in total, as well as working to optimise on-board energy usage.

“We continue to work together across the cruise industry on a shared commitment to reduce the global cruise fleet’s rate of carbon emissions by 40% over the next 10 years,” says Donald. “We will all work to make important contributions toward achieving that significant goal as an industry. Longer term, through a focus on innovative solutions for the future, we also share in the International Maritime Organization’s vision for a carbon-free shipping industry by the end of the century.”

In short, environmental investment will continue because it has to, even if it isn’t making headlines for now. The job for the industry will be to rebuild public trust, tempting passengers back on board once they’re able to. And while factors like hygiene, health and safety will presumably be the immediate priority, sustainability is part of the bigger picture.

“Certainly some travelers factor in key issues like corporate citizenship and environmental leadership when making vacation decisions,” says Donald. “Ultimately, we know there is demand for cruising now, and there will be demand for the value of great cruise vacations in the future. Our strong focus on sustainability could potentially attract some vacationers, but we believe all of our guests expect us to be a responsible company and an environmental leader overall.”

For now, it’s hard to say when and how the industry will be able to begin the journey towards recovery. Despite some promising signs – cruise passengers are notoriously loyal and bookings for 2021 are reportedly almost at their normal levels – there will be a long road ahead before emissions levels are, once again, the worst PR challenge facing the industry.

In the meantime, this break in operations might be construed as a moment of reset – chance to work out what a cleaner, greener industry might look like as we move past Covid.

“If anything, a pandemic has shown the world more than ever that we are all in this together, and that every industry, business and region of the world can be linked together by unforeseen circumstances,” says Donald. “Ultimately, we all share the same planet, and we are all in this together to do our part in protecting the environment. At our company, our resolve has only strengthened to continue doing all we can to have a sustainable cruise industry and forge a path toward zero emissions in the future.”

This article appears in the 2020 vol 2 edition of World Cruise Industry Review

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