Shipping is on the verge of a fueling transformation… and our mission is to help facilitate and accelerate this evolution. In order to understand shipping emissions, it helps to think of the magnitude of the maritime industry, and how much we rely on it. About ninety percent of all the goods traded globally spend some of their transit time on a ship.
In order to meet our needs, almost a hundred thousand ships are operating around the globe, 24/7, 365 days a year. These ships still primarily use Heavy Fuel Oil (ie. the dirtiest/cheapest fuel available) with SOx, NOx and particulate matter emissions that are linked to tens of thousands of deaths per year in port areas. The total CO2 emissions from shipping is equal to that of the 6th largest nations.
EMISSIONS CONTROL AREA
The shipping industry is facing increasing regional and global regulation designed to drastically limit sulfur oxide and nitrogen oxide emissions. With the new International Maritime Organization (IMO) sulfur emissions limit in effect as of January 1, 2015 in North America and Northern Europe, ship owners operating within the Emissions Control Area (ECA) face a challenging set of options for compliance:
1. Continue operating as usual but burn ultra-low sulfur (but high cost) diesel
2. Install a ‘scrubber’ to capture sulfur emissions & burn low cost heavy fuel oil
3. Convert to a dual-fuel engine and burn low cost and clean burning Liquefied Natural Gas (LNG)
SWITCHING TO A CLEANER FUEL
CME believes the most viable and economic compliance alternative for ship owners and the environment is to convert vessels to be able to burn LNG as a fuel. Using LNG to fuel a ship reduces CO2 emissions by 20-25%, NOX emissions by 85-90% and SOx and particulates by ~100%. Achieving a 10% LNG share of total fuel burned in US waters would reduce NOx emissions by the equivalent of 15 million cars being taken off the road.
Natural gas is abundant in North America. By converting to dual-fuel, ship owners will not only be able to burn the cleanest fuel, but also less expensive fuel – making their vessels the most competitive in the global fleet.
Please use our calculator for a quick economic look at how a ship is impacted by the new regulations, and the savings that could be created by switching to LNG fueling.
WHAT WE DO
CME has partnered with WesPac Midstream to build a vertically integrated platform, funded by Oaktree Capital. This best-in-class partnership has the ability to tie together supply, distribution and conversion finance into a cost-effective fueling option for ship owners.
CME has been actively advising shipping businesses in planning for emissions compliance since its inception in 2012. Because of our ship owning roots, we understand the inherent nuances of ship owners’ particular needs in different situations, which enables us to deliver solutions and value to every client.
LNG FUELING INFRASTRUCTURE
Our LNG Supply partnership with WesPac Midstream uniquely positions us to develop LNG procurement strategies and provide the best possible LNG fuel pricing and logistics for our clients. WesPac develops, constructs, owns and operates energy infrastructure including liquefaction plants across North America, and is currently constructing LNG supply sites (ie. natural gas liquefaction, marine terminal) in Jacksonville, FL and Tacoma, WA. WesPac is developing LNG fueling infrastructure in several other strategic ports in North America as well, with project in various stages.
Additionally, CME and WesPac are building LNG distribution infrastructure to connect customers to the LNG supply, and are currently constructing the first LNG bunker barge to begin serving North American markets in early 2016. Additional barges are expected to enter our fleet in the near future to serve the growing markets. Similar to LNG supply, we are able to offer tailored LNG delivery solutions to meet unique and specific requirements.
Designed by ship owners for ship owners, our proprietary Emissions Compliance Service Agreement (ECSA) is a funding mechanism that can help cover the capital costs for LNG conversion. The ECSA can be utilized to finance the conversion of any type of vessel that meets certain engine technology and minimum horsepower requirements. This funding model enables the ship owner to use the future fuel savings to pay for the upfront retrofit capital cost.
CME does not represent the interests of any type of technology or emissions compliance solution, providing transparent consultancy across the choice of available options in the marketplace. We simply provide the capital required, so that the ship owner can achieve dual-fuel, ECA compliance without adding to the ship’s cost-basis – and can use their own capital for other more accretive, customary investments.
MEET THE TEAM
We are CME. Our team is a tight-knit group that can work quickly and effectively to help ship owners reach their goals. Our mission is crystal clear, we wholeheartedly believe in what we do, and we don’t let barriers get in the way of forward progress.
We are friends that enjoy working hard together. We are outdoorsmen and skiers that want to see our snow stick around for generations to come. We are fathers and significant others that care about the health and future of those we love. We believe climate change needs to slow down to sustain our quality of life as we know it. We believe our country needs to use its domestic natural gas to achieve energy independence and reduce the need for war to secure foreign resources. We find the shipping industry absolutely fascinating. And we believe things can change – one ship at a time.