Slower boats to China as ship owners save fuel

By Erik Kirschbaum

BERLIN (Reuters) - Oil at more than $90 a barrel is concentrating minds in the shipping industry. Higher fuel costs and mounting pressure to curb emissions are leading modern merchant fleets to rediscover the ancient power of the sail.

The world's first commercial ship powered partly by a giant kite sets off on a maiden voyage from Bremen to Venezuela on Tuesday, in an experiment which inventor Stephan Wrage hopes can wipe 20 percent, or $1,600, from the ship's daily fuel bill.

"We aim to prove it pays to protect the environment," Wrage told Reuters. "Showing that ecology and economics are not contradictions motivates us all."

The 10,000-tonne 'MS Beluga SkySails' -- which will use a computer-guided kite to harness powerful ocean winds far above the surface and support the engine -- combines modern technology with know-how that has been in use for millennia.

But if Skysails is a relatively elaborate solution, another development shows the march of progress is not always linear: shipping companies seeking immediate answers to soaring fuel prices and the need to cut emissions are, simply, slowing down.

The world's 50,000 merchant ships, which carry 90 percent of traded goods from oil, gas, coal, and grains to electronic goods, emit 800 million tonnes of carbon dioxide each year. That's about 5 percent of the world's total.

Also, their fuel costs rose by as much as 70 percent last year.

That dramatic increase has ship owners clambering onto a bandwagon to reduce speed as a way to save fuel and cut the greenhouse gases blamed for global warming, said Hermann Klein, an executive at Germanischer Lloyd classification society.

"The number of shipping lines reducing speed to cut fuel costs has been growing steadily," Klein, whose organization runs safety surveys on more than 6,000 ships worldwide, told Reuters.

"Slowing down by 10 percent can lead to a 25 percent reduction in fuel use. Just last week a big Japanese container liner gave notice of its intention to slow down," he added.

Shipping was excluded from the U.N.'s Kyoto Protocol to slow climate change, and many nations want the industry to be made accountable for its impact on the climate in the successor to Kyoto, which runs to 2012.

GO-SLOW

In Hamburg, the Hapag-Lloyd shipping company is not waiting for 2012. It reacted to rising fuel prices by cutting the throttle on its 140 container ships traveling the world's oceans, ordering its captains to slow down.

The company in the second half of last year reduced the standard speed of its ships to 20 knots from 23-1/2 knots, and said it saved a "substantial amount" of fuel.

The calculation used in shipping is complex: longer voyages mean extra operating costs, charter costs, interest costs and other monetary losses. But Hapag-Lloyd said slowing down still paid off handsomely.

"We've saved so much fuel that we added a ship to the route and still saved costs," said Klaus Heims, press spokesman at the world's fifth-largest container shipping line. "Why didn't we do this before?"

Climate change was an additional motivating factor.

"It had the added effect of cutting carbon dioxide emissions immediately," Heims said. "Before, ships would speed up to 25 knots from the standard 23-1/2 to make up if time was lost in crowded ports. We calculated that 5 knots slower saves up to 50 percent in fuel."

Slowing down has not involved a decrease in capacity for the company. For container ships carrying mainly consumer goods from Hamburg to ports in the Far East, the round-trip at 20 knots now takes 63 days instead of 56, but to make up for this it added a vessel to the route to bring the total to nine.

Hapag-Lloyd board member Adolf Adrion told a news conference in London on January 10 speeds are now being cut further, to 16 knots from 20, for journeys across the Atlantic: "It makes sense environmentally and economically," he said.

The world's largest container shipping operator, Danish group A.P. Moller-Maersk, is also going slower to cut emissions -- although Eivind Kolding, chief executive of the group's container arm, told the January event this would mean a delay to clients of 1-1/2 days. He added he believed that was a price customers were willing to pay for the sake of the environment.

"We reduce speeds where it makes sense," said Thomas Grondorf, Moller-Maersk spokesman in Copenhagen. "It entails careful planning and is only appropriate on certain routes."

FERRIES TOO

Not only are giant ocean-going vessels slowing down, the trend is also catching on among ferry services.

Norway's Color Line ferry between Oslo and Baltic destinations said in early January it would add 30 minutes to the 20-hour trip from Oslo to Kiel: "It's good for the environment and it's good for us economically," said Color Line spokesman Helge Otto Mathisen in Oslo.

Color Line CEO Manfred Jansen has said the company will save 1.4 million liters of fuel per year by sailing slower.

But if fuel prices keep rising, innovations like the kite powered 'Beluga SkySails' could also pay off. German-based Beluga Shipping has already ordered two more vessels and Wrage's company has a total of five orders in hand.

If the maiden voyage is a success, inventor and chief executive Wrage hopes to double the size of its kites to 320 square meters, and expand them again to 600 square meters in 2009. The company hopes to fit 1,500 ships by 2015.

At Germanischer Lloyd, Klein said the classification body has urged ship owners to explore other simple ways to save fuel, including using weather forecasts to pick optimum routes for vessel performance, regularly cleaning their vessels' hull and propeller to remove sediments that cause resistance, and using fuel additives to improve combustion efficiency.

"'Ship efficiency' is of paramount importance considering a fuel bill for a big container ship over a 25-year lifespan adds up to nearly $900 million," he said.

He also saw scope for designers to create slower speed engines with better fuel efficiency rather than just having ship owners operate fast-propulsion engines at reduced speeds.

(Additional reporting by Stefano Ambrogi in London, John Acher in Olso and Mette Fraende in Copenhagen; editing by Sara Ledwith) -- For Reuters latest environment blogs click on: http://blogs .reuters.com/environment/