Effective January 1, 2021, the yacht industry is expected to comply with new IMO standards. The technology has been successfully deployed in commercial vessels, but is not ready to be integrated into smaller luxury craft.
While I support environmental responsibility, and believe in climate change, this technology is not ready for market. It makes full engineering a must, can increase the cost by 25%, and most companies will be affected just as the 10% yacht tax of 1991.
Government can help. It can harm. In this case, I suggest financial participation in the practical development and implementation of a solution that supports both the yachting industry, its’ employees that depend on it for their income, and the environment that we all enjoy.
Please continue to read the press release from Viking Yachts:
Emissions Rule Dooms Large Diesel Yachts
SCR is marine industry’s greatest threat
since 1990 Luxury Tax
(Fall/Winter 2019, New Gretna, New Jersey)—A looming emissions mandate could spell doom for large diesel- powered yachts unless an international governing body realizes its premature implementation will only devastate the marine industry, crippling boatbuilding production and causing substantial job losses.
“This is the greatest threat to the marine industry since the luxury tax of 1990,” Viking President and CEO Patrick Healey said at a press conference at the Fort Lauderdale International Boat. “It is going to rock the industry. They’re mandating impossible regulations that require solutions that don’t exist in today’s world.”
The International Maritime Organization (IMO) is prematurely forcing commercial regulation compliance of Tier III emissions limits on diesel-powered yachts, which would push boatbuilders like Viking to terminate production of its largest vessels. Compliance with the mandate, which is scheduled to take effect on January 1, 2021, requires the installation of heavy, bulky and potentially dangerous Selective Catalytic Reduction systems in the enginerooms of yachts with a “load line length” of 24 meters (78 feet).
The systems will increase purchase and operating costs of the boat; add significant weight; reduce performance; hinder accessibility for service; compromise safety; and require additional ventilation and onboard tankage.
“These requirements are going to force us to stop production of our 93 Motor Yacht and our 92 Convertible,” says Healey. “We’ve spent a combined $18 million in R&D on these two yachts. Viking will not compromise the engineering integrity of our yachts with a technology that would have so many negative effects. We would not be building a better boat by using this technology in its current state.”
Fighting the Unfeasible
The technology to scale down the SCR system to a level where it can be effectively engineered for installation in the Viking 92 Convertible and 93 Motor Yacht “simply does not exist yet,” according to Lonni Rutt, Viking’s Vice President of Design and Engineering. “We don’t have the space in our enginerooms. These boats would become heavier, slower, use more fuel and have higher operating and maintenance costs. The systems also generate significant heat, so there is a safety issue as well. These are just some of the negative effects.”
“In speaking with the engine manufacturers, all of them are communicating to us that they are not going to be compliant with this until 2022 at the earliest,” says Healey. “And then we have to go through the bugs and the engineering design. This probably won’t be implemented properly for another two years after that.”
Discontinuing production of Viking’s largest vessels will have severe employment implications on the New Gretna, New Jersey, plant. “This is a jobs issue,” says Healey. “We will continue to fight the unfeasible application of IMO Tier III limits, but we need your help in our demand for a reasonable alternative. This is not just about Viking. This is about the entire marine industry, both here in the U.S. and internationally. We’re talking about an entire segment of boatbuilding – yachts from 90 to 130 feet – being wiped out.”
Tier III of the IMO NOx regulations aims to reduce nitrogen oxide emissions (NOx) by approximately 70 percent compared with the current IMO Tier II standards. The regulations apply to vessels in North America, the US Caribbean, the Baltic Sea, the North Sea, and all future NOx Emission Control Areas: any boat that might pass through must comply, which basically means all must adopt these regulations. Last year, the International Council of Marine Industry Associations (ICOMIA) attempted to delay the implementation beyond January 1, 2021, but was unsuccessful, with key member states such as Norway, Germany and Canada voting against the extension.
“We do have an appeal process that we’re going through, but like many appeals, there’s only a 20% chance of winning,” says Healey, referring to the IMO MEPC 75 meeting March 30-April 3, 2020. “We’re up against the majority of the EU and Canada. They’ve blocked the extension of the exemption.”
Jobs at Stake
Norway led the charge against this extension, arguing that “these are ships that are used for recreational purposes by a group of people who have the financial resources to employ the best technologies” but ignoring the non-existence of technology for SCR for these yachts and the severe job losses that will occur because of the mandate. “This was a decision made without any thought about the people who build the engines, who build the boats, who sell the boats and maintain the boats,” says Healey. “It’s not about the money to afford these systems. These systems belong in boats 150 feet and larger. They will not fit in our boats.”
The IMO Tier III regulation is a separate international mandate. Viking and other boatbuilders are already in compliance with the U.S. EPA’s Tier III requirement. The current diesel technology is far ahead of the current clean air standard. “Our engine manufacturers have done a tremendous job,” says Healey. The IMO standard is based on commercial shipping where vessels log tens of thousands of hours annually compared to a few hundred for recreational yachts. “These systems are running in ships, ferries and other commercial vessels that run 24/7,” says Healey. “Recreational boats in Europe are running 200 hours a year, and in the U.S., 400 to 500 hours year.”
Going Public
Another variable that makes the mandate’s timeline ill-conceived is SCR’s reliance on the use of urea to treat
the engine exhaust. A remote urea tank, which needs to be 10% of the fuel load, is required. “To say that urea is not widely available is an understatement,” says Healey. “We simply don’t have the resources and the infrastructure to maintain and service these systems.”
“There will be very few ports that have urea, certainly not your mom-and-pop marinas or remote locations,” says Bob Healey Jr., the Executive Co-Chairman of the Viking Group. “Only your major ports like Miami and Fort Lauderdale will have urea.”
In addition, SCR is only effective when the engines are running at an engine load of 80% or higher, which
amounts to only a fraction of the overall operation time of Vikings and most yachts in this segment. The system works best only when combined with high exhaust gas temperatures and runs non-stop. “The systems will run urea during all phases of operation – there is no off switch,” says Bob.
“We’ve been fighting this battle quietly and without going through the public eye,” says Healey. “But now we need to go public and spread the message. We have one more bite at the apple.”
The need to gain traction on this issue grows daily as does the threat of the expansion of the Tier III emissions mandate to smaller boats. “If the cutoff is 78 feet [24 meters] today who is to say they won’t try to drop it to 60 feet [18 meters] tomorrow?” says Healey. “This regulation is being pushed upon us by people who are disconnected completely from the marine industry and the companies and people who build boats.”
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