By Kari Reinikainen
The cruise industry has been forced to raise billions in new debt to weather the Covid-19 storm and its aftermath. At the same time, it needs to invest in reducing its environmental footprint.
While the need to transition to green fuels commands the most attention, the challenge also includes the materials used on board.
“The question of using recyclable materials that have been produced without CO2 emissions in the interiors of cruise ships raises the discussion about emissions-free cruising from fuel efficiency to material efficiency,” said Vesa Marttinen, senior advisor at the Finnish consultancy MarineCycles. “Shipyards, who buy the steel used in building of a ship themselves, have been keen to reduce waste for a long time. But most of the materials used in the interiors on board are largely the same as those used by the construction industry ashore.”
When it comes CO2-free-produced and recyclable new materials, whoever is willing to pay for them will get them. “It seems that the maritime sector is not in a strong position in the competition for them,” Marttinen said, referring to the financial impacts of the Covid-19 pandemic on the sector.
While the cruise industry is gathering strength after the pandemic, it could start to reduce the environmental footprint of building passenger ship interiors by reducing waste. “If you need to build 100 units of something on board, you often need to buy materials for 120 to cover for waste. In some cases, the figure can be as high as 300,” Marttinen said.
To achieve this reduction, working methods should be standardised, and there should be more transparency in the supply chain so that it is possible to define how much material has left the facilities of each supplier and how much is actually fitted in the ship.
Setting benchmarks
Once this has been calculated, benchmarks could be set by a shipyard to reduce the waste by, say, 20 per cent over a five-year period. Because the CO2-free-produced, recyclable new materials are often more expensive than the standard ones in use today, the reduction of waste will become even more important as the cruise industry gradually moves towards their use. “Turnkey contractors rather than the shipyard itself often buy the materials used in the interior of the ships, so these companies should be brought in as well to make sure that the efforts to cut waste really will work,” Marttinen said.
Ships usually receive a major upgrade when they are roughly 15 years old, around halfway through their expected commercial lifespan of 30 years. This mid-life refit offers an opportunity to replace existing interior materials with environmentally friendlier ones; at the same time, investment is needed for the transition to alternative, greener fuels. These two aspects will compete with each other for funding.
“A key aspect in the ability of the cruise industry to invest in decarbonisation in the future will be the age profile of the fleet,” said Dr Magnus Gustafsson, research director in industrial management at Åbo Akademi University in Finland. “Transition to green fuels will be rather costly in many cases, and if the book value of a ship will increase as the result of a retrofit of technology to allow it to use a green fuel, the situation will be rather challenging. Fuel is the largest source of pollution from the cruise industry, so it is natural that the focus of efforts to reduce emissions to air plays such a dominant role in the industry’s green drive.”
Cost consideration
The higher cost is obviously a major consideration. Despite this, the industry is unwavering on the path to decarbonisation. Carnival Corporation & plc, for example, remains committed to its existing targets. “Obviously we are not in the same position as we would have been if there had been no pandemic, but we remain committed to our stated 2050 decarbonisation aspirations and are well on the way to meeting our 2030 reduction target,” said Tom Strang, Carnival’s senior vice president, maritime affairs. “We continue to right-size our fleet, invest in new technology to improve the energy efficiency of our existing ships, test and trial new fuels and technology, as well as explore ways to ensure that our operations and deployment are as efficient as possible.”
Royal Caribbean Group, too, recognises the need to use greener materials on board its ships. This is a critical topic for the company, according to José Ángel del Campo Martínez, manager of architectural outfitting and design.
Prices of materials are rising across the board, and the question is about a return on the investment and not just about the initial investment at the time of purchase of materials. “This trend on design and forecasting additional budgets will be a normal practice sooner than later,” said Campo Martínez. “Please take into consideration that, as soon as this first [vessel cost] impact is absorbed, for the following ship, if taking this area into consideration, the green stamp and related material cost will be at least diluted.”
A spokesperson for MSC Cruises noted that for some products there might be higher initial purchase costs but greater durability and more effective replacement and repair services; also, take-back obligations on suppliers could help to ensure that costs are in fact lower in the long term.
Trimline, the UK-based turnkey contractor that specialises in retrofits of cruise ships, has a more positive and rational view on the cost issues. It believes that, while greener materials are more costly, the situation is improving. “Certainly, the initial purchase price is an issue,” said Nick Farrell, Trimline owner. “Sustainable products, in general, cost more to buy in the first place. This is usually because they are currently manufactured in smaller quantities, and the components of those products will naturally cost more. The gap is definitely closing, though, and, as it does, then you should have a virtuous circle of larger supplier volumes and correspondingly lower costs.”
There is also the certification aspect to consider. Even smaller, niche manufacturers, who have focused on sustainability over volume, must comply with IMO regulations and other certifications, which all add to the cost initially.
“A lot of time has been spent working with suppliers and manufacturers, feeding back our thoughts on their ranges, and learning about our supply chains,” said Farrell. “We want to feel that year-on-year our refits are using more and more sustainable materials, or at least we can offer these products in the best possible light. Working closely with those clients who have sustainability high on their agenda is vital too. It lets us understand their brand aspirations and priorities, and we help them deliver on those – whether that’s low weight, low carbon footprint, using more recycled products, et cetera.”
Investment pressure
Carsten Wiebers, global head of mobility at the German international project financier KfW IPEX-Bank, said that the extra debt the cruise industry now carried had not brought things to a standstill when it came to sustainability “Without the Covid-19 crisis, the cruise lines would have had more financial recourses to fund investment into green technologies. It is like a professional sports player after a Covid-19 infection: first return to normal, then get back to professionality,” he told CruiseTimes.
In cooperation with the European shipyards, cruise lines continue to invest in various sustainable elements, such as:
Advanced waste management: ensuring no harmful discharge to the air or the ocean, no waste sent to landfill, and recycling all reusable materials.
Energy efficiency: reducing energy consumption on board to decrease the use of fuel.
Flexible ship design: to support sustainable operations throughout its lifetime.
Future fuel ready: ships are designed ready for the use of future carbon-neutral fuels.
No local emissions: smart power generation to switch between carbon-neutral and carbon-zero operations in sensitive areas.
Lifecycle management product: design and use of materials with focus on refit and end-of-lifetime transition.
Carbon–neutral production future: building process of vessels to become fully carbon neutral.
“The pressure to invest into green technologies – in hospitality and ship power – is still strong, also because cruising is a consumer product and image is very important,” Wiebers said.
Changes and investments which reduce the operational costs are driven even more ambitiously by several cruise operators. This is an industry trend. As for the use of greener materials on board, Wiebers said: “We assume that such investments would rather be done when newbuilds are designed/ordered.”
Assessing choices
The travel and logistics arrangements in the marine outfitting sector can have significant impacts too. On a large refit you might have 1,000–2,000 tradespeople on a vessel, all of whom will have likely taken flights to get to the ship. All of the materials for the refit will have been shipped, or flown, to the dockyard ahead of time. “The more time there is to plan a refit, the more likely it is we can choose more sustainable methods for logistics. If everything is decided by the client at the last minute, you may have no option but to send freight by air – a much more costly route, both in monetary terms and environmentally,” Farrell said.
With more time, you can send by sea or road, which tend to be much less impactful. “A lot of clients may well consider the sustainable credentials of the product they are using, but if you end up flying it in because the schedule is so tight, did that really help?” Farrell asked. Trimline has started building a product database in an effort to grade the available materials in as much detail as possible in respect to their sustainability credentials.
The argument for total cost of ownership is potentially easier with refits than with newbuilds. “Arguably, with a newbuild the client takes possession of the ship looking shiny and new, but unless they are willing to spend the extra money at build time and specify more sustainable materials, then the shipyard may not go out of their way to spend the extra and lose on margin,” Farrell said. “Refits could be considered slightly different, in that the client generally has to live with that decision and may think slightly longer-term – if a sustainable chair lasts 50 per cent longer than a non-sustainable one, but costs only 20 per cent more, then it’s quite a compelling argument.”
The whole area of sustainability remains difficult to navigate and assess. Farrell said: “If you take a relatively simple example like a chair, how do you assess how sustainable it is? You would need to take into account all the components: the glue, the wood, the upholstery. Where do each of those items come from? How many air miles have they flown? For each of them, what happens at the end of their useful life? Can they be reused or recycled? Bamboo might be considered more sustainable than oak, for example, but if that bamboo has to travel 5,000 miles to the furniture factory, and then a further 5,000 miles back to the ship, is it really more sustainable than some locally sourced oak, which might be twice as durable?”
Shipyards efforts
Shipyards are also looking at the question of sustainability from a perspective wider than just fuel technology. “We have currently dedicated research and innovation activities to reduce the impact of the ship in a life-cycle assessment perspective, including the possibility to adopt recycled and recyclable materials even if, to date, specific regulations and standards are not yet defined for certification of ships – differently from other sector applications,” a spokesperson for Fincantieri said.
Concerning the materials on board, there are strict regulations to be followed for marine applications and, to date, not all recyclable materials are compliant or fully tested according to marine rules and regulations. “Furthermore, we are also investigating the reliability of such materials in the marine environment, as well as availability and cost, which are important factors to be considered. We expect that in the near future, recyclable materials will find a progressive application on board of passenger vessels,” the spokesperson said.
Meyer Werft in Germany started exploring new and foremost sustainable materials before the pandemic. “One of the most interesting projects is the EcoCab research project, in which we collaborate with universities and research institutes,” said Florian Feimann, communications manager at the Papenburg-based shipyard. “EcoCab combines comfortable travel and environmental protection. The aim of the project is to develop a low-energy cabin with decentralised air conditioning. The concept also includes recyclable materials and innovative electrical systems, such as a DC network.”
Achieving a greater degree of sustainability is a broad challenge for the cruise industry, and many factors influence what can be done at a given time. As the industry sells its product to consumers, it is obvious that the pressure is there to take further steps forward. All the steps require hefty investment by a severely financially impaired industry.
