Carnival commits over $180 million to install exhaust gas cleaning systems on 32 ships

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Written by Teijo Niemelä Teijo Niemelä

Category: Top Headlines Top Headlines

Published: 05 September 2013 05 September 2013

Carnival Corporation & plc, the world’s largest cruise company, today announced it has received the support of the U.S. Environmental Protection Agency (EPA), the U.S. Coast Guard and Transport Canada to implement a significant advancement in environmental technology designed to reduce air emissions from cruise ships and large marine vessels.

As part of today’s announcement, Carnival has committed over $180 million for exhaust gas cleaning technology on 32 ships. These include vessels from Carnival Cruise Lines, Holland America Line, Princess Cruises and Cunard that sail regularly within the North American Emission Control Area (ECA).

"This is a significant accomplishment as well as an important milestone for our company," said Carnival Corporation & plc CEO Arnold Donald. "Working together with the EPA, U.S. Coast Guard and Transport Canada, we have developed a breakthrough solution for cleaner air that will set a new course in environmental protection for years to come."

Carnival has been a partner in the development of this technology and will take the lead in further refining both design and installation aspects on ships with a variety of engine configurations between now and mid-2016. This new generation of so-called “scrubber technology” combines the removal of sulfur with the substantial reduction of particulate matter and black carbon. Once the exhaust gas cleaning technology is installed and fully operational on the various Carnival subsidiary ships, they will exceed ECA standards. The International Maritime Organization’s MARPOL Annex VI places a cap on sulfur within ECAs at 1.0%, which took effect in North America in 2012. In 2015, the limit will be 0.1%.

Carnival’s design combines two established technologies, which have been successfully used in power plants, factories and vehicles to clean – or scrub – the exhaust from high-sulfur fuel. For the first time this combination is being developed to accommodate restricted spaces on existing ships.

In addition to exceeding stricter air emission standards – a significant public health advancement – Carnival’s technology will help the company mitigate escalating fuel costs. The agreement in principle from the EPA and Coast Guard would enable an exemption for Carnival to use the fuel source that makes the most sense from an environmental and economic perspective. The agreement in principle is a requirement for the flag states of each Carnival subsidiary to grant permission for implementation.

The implementation also produces an immediate significant public health benefit, as all of the ships that will have the scrubber technology installed will use either low-sulfur marine gas oil or shore power when in ports in the United States and Canada. Ships that use shore power turn off diesel engines and connect to local electric utility power.

As a next step, Carnival will be requesting permits from flag states to allow for the trial of the exhaust gas cleaning technology to proceed.

Looking ahead, Carnival plans to explore the possibility of expanding the installation of its scrubber technology beyond the initial 32 ships.

RCCL group to separate three brands to separate companies in the UK

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 04 September 2013 04 September 2013

Royal Caribbean Cruises Ltd (RCCL), the world's second largest cruise shipping group, has decided that RCL Cruises Ltd, its operating company in the UK, is to create three individual businesses for each of its brands in the the country as they have each now grown to a size that warrants “increased focus and investment," Travel Weekly reports in a newsletter emailed to Cruise Business.

The news comes on the same day as it emerged that Royal Caribbean International, the group's contemporary market brand, appears to replace Independence of the Seas in Southampton by the new Anthem of the Seas upon delivery from Meyer  Werft in  the spring of 2015.

The new structure, which will take effect from January 1, 2014, will see current associate vice president & general manager Jo Rzmowska become managing director for Celebrity Cruises. A recruitment process is already underway both internally and externally for separate managing directors for the Royal Caribbean and Azamara Club Cruises brands, Travel Weekly said.

Each individual managing director will also get his or her own commercial, marketing and sales teams, as well as separate agent trainers and trade marketing budgets.

Dominic Paul, who remains as vice president and managing director of Europe, the Middle East and Africa, said the proposed restructure was an important milestone in the history of the global RCL Cruises Ltd business:

“The only other market that we have this kind of focus is North America. This is the first time we have given any other market such attention. We have seen that when a market gets to a certain size of importance, this is the structure that works best to grow.

“The UK is the second-largest market globally and this move is a recognition of the growth achieved so far and to best position each cruise line for future development and growth.”

The three RCL brands collectively in the UK and Ireland have seen 8% growth in the last five years versus the overall cruise market in the UK and Ireland which has grown at 3% in the same period.

Asked if it meant the company, which is the second largest cruise operator in the world, would deploy more than the current five ships to the UK as a result of the restructure, Paul said: “This underlines our commitment to the UK market. We are investing in the brands and see the future potential for more growth. We hope that this will mean we can bring new ships into this market," he said.

The UK is an important location for the RCCL group also from the ship management point of view. In its 2012 annual report, RCCL said it operates 13 of its total fleet of some 40 vessels under companies which have elected to be subject to the United Kingdom tonnage tax regime. "The requirements for a company to qualify for the U.K. tonnage tax regime include being subject to United Kingdom corporate income tax, operating qualifying ships, which are strategically and commercially managed in the United Kingdom, and fulfilling a seafarer training requirement. Failure to meet any of these requirements could cause us to lose the benefit of the tonnage tax regime which will have a material effect on our results of operations," RCCL said.