Fuel changeover in Chile
Fuel switch in Chile: Together for more sustainability
In spring 2017, in cooperation with our customer Electrolux, one of the world's leading manufacturers of household appliances, we launched a pilot project as well as in Mexico, Peru, and Chile in 2018, to reduce sulphur dioxide emissions. Among other things, sulphur dioxide can contribute to soil acidification and to respiratory diseases. The key to reducing emissions lies in switching from heavy fuel oil (HFO) as standard to higher-grade marine gas oil (MGO). The project proves that when shippers and shipping companies work together, it is possible to implement measures for greater sustainability that go beyond the minimum legal requirements.

Low-sulphur fuel has so far been used in commercial shipping mainly in designated special transit areas, called Emission Control Areas – for example in the North Sea and Baltic Sea or off the coast of the USA and Canada, where more stringent limit values for sulphur content apply. While marine gas oil permits a significant reduction in sulphur dioxide emissions, it is also significantly more costly than conventional heavy fuel oil – the average price difference in the reporting period was over 60 percent. As desirable as this sustainable solution is, the use of MGO also needs to be economically viable. In our project with Electrolux, both sides – carrier and shipper – accepted additional efforts to achieve greater sustainability.

The idea for a joint project was born in a working group of the Clean Cargo Working Group (CCWG), in which both Electrolux and Hamburg Süd have been members for many years. The CCWG is an association of shipping companies, freight forwarders, and leading brand manufacturers that have set themselves the goal of minimizing the negative environmental impacts of global freight transport and promoting responsible transport. Taking the project forward was then a question of teamwork, involving Electrolux and various Hamburg Süd departments from ship operation to procurement.

The pilot project was implemented during the layover of the Hamburg Süd ship “Santa Clara” (7,154 TEUs) in the Chilean port of Iquique from March 1 to 2, 2017. Instead of using HFO, the auxiliary engines and boilers were run on MGO. The latter has significantly lower sulphur content, allowing sulphur dioxide emissions to be reduced by more than 98 percent during the port stay. In 2018, the “Santa Catarina” (7,114 TEUs) voluntarily switched from HFO to cleaner MGO for the running of her auxiliary engines and boilers during her layovers in Manzanillo (Mexico), Callao (Peru) as well as Iquique and Puerto Angamos (Chile) between March 11 and 24. Due to the significantly lower sulfur content in marine gas oil, sulfur dioxide emissions for the cargo on board for the customer Electrolux were reduced by over 95 percent.

In respect of the container carriers in its supply chain, Electrolux has recently made reducing CO2 emissions a focus of its “For The Better” sustainability strategy. The next step is now to reduce sulphur oxides in ports where no corresponding regulations are in place. The innovative aspect of the project is not the fuel switch itself. Rather, it is the fact that both sides are accepting additional efforts and higher costs in order to jointly make the value chain more sustainable and environmentally friendly.