From May 1, 2025, the Mediterranean will become an Emissions Control Area (ECA) to reduce pollution levels. The first consequence is that the maximum sulfur content of fuel used on board any vessel sailing in its waters will decrease from 0.5% to 0.1%, unless the vessel is equipped with an exhaust gas scrubber. To control SOx, NOx, and particulate emissions from ships, including cruise ships, the International Maritime Organization (IMO) has defined Emissions Control Areas (ECAs), which influence cruise planning.
Article from CruisesNews magazine no. 72 – March 2025
The cruise industry is no stranger to Environmental Quality Assurance Companies (EQAs). They already exist on the coasts of the United States, in the Caribbean, the Baltic, and the North Sea.
Its implementation is a consequence of the introduction of the IMO 2020 regulations, after which refineries, bunkering companies, and the shipowners themselves have had enough time to adapt to the changes.
However, significant emissions are still associated with shipping operations. Emissions from the shipping industry are closely linked to its fuel consumption, which has been estimated at between 279 and 400 million tons. Because ships move between different jurisdictions, international regulations are necessary. The International Maritime Organization (IMO), a specialized agency of the United Nations, is responsible, among other things, for preventing marine pollution from ships.
The MARPOL Convention is the main international convention concerning the prevention of marine pollution from ships, and in 1997 the convention was updated with Annex VI, which more specifically addresses air pollution from ships and sets limits on NOx and SOx emissions from ships. In 2008, the IMO agreed on the latest version of Annex VI, which established a global limit for the sulfur content of marine fuel of 3.50% (from 2012), followed by a reduction to 0.50% from 2020.
MARPOL also previously defined four Emission Control Areas (ECAs): the Baltic Sea, the North Sea and the English Channel; and the North American coasts, as well as the US Caribbean islands. Within these ECAs, there is even stricter control of sulfur emissions, with a limit of 0.1% in ship fuel as of January 1, 2015. Initially, this regulation aimed to reduce sulfur oxides (SOx) and was expanded in 2005 to include nitrogen oxides (NOx) in several areas. ECAs with restrictions only on SOx are sometimes called SECAs. ECAs with restrictions on NOx are sometimes called NECAs. The Mediterranean area will be a SECA.
The ECAs of North America and the North Caribbean also regulate NOx emissions. They are therefore SECAs and NECAS. Furthermore, the EU has adopted legislation transposing IMO regulations into EU law, the latest version of which is Directive 2012/33/EU (also known as the Sulfur Directive). This decision meant that a 0.50% reduction in sulfur content was unilaterally applied in the EU on January 1, 2020.
The next two ECAs will be the Canadian Arctic, from the Labrador Peninsula to the Alaskan border, and the Norwegian fjords, from approximately Bergen to the Russian border near Kirkenes. Both will be SECA (starting March 1, 2027) and NECA (starting March 1, 2026).
Impact on Fuel Prices:
At first glance, the primary consequence could be a rise in the price of fuel paid by shipowners. Current total demand for marine fuels in the Mediterranean is estimated at around 21.5 million tons (Mt), of which more than 50% is VLSFO (Very Low Sulphur Fuel Oil) with a maximum sulfur content of 0.5%. Starting next May, demand for this fuel in the region is expected to decrease. According to data from Marine and Energy Consulting Ltd, VLSFO demand is projected to halve, driven by an increase in the consumption of MGO (Marine Gas Oil) and ULSFO (Ultra Low Sulphur Fuel Oil).
In theory, demand for conventional fuel oil, or HSFO (High Sulphur Fuel Oil), should remain stable, as ships equipped with scrubbers can continue to use high-sulfur fuels. However, older scrubbers are incapable of reducing the sulfur content to 0.1%, so it remains to be seen how many shipowners will be forced to refit their vessels, use lower-sulfur fuels, or scrap them.
In any case, ships operating in the Mediterranean will face higher costs. Using Gibraltar as a reference point, MGO with 0.1% sulfur has reached a cost of $798/mt, compared to $590/mt for VLSFO (+35%), which could translate into higher passenger fares.
The introduction of the Mediterranean ECA will also have implications for the transport of refined products within and outside the region. According to Gibson, a decrease in demand for VLSFO in the Mediterranean Sea will be inevitable, which should boost exports from the region, most likely to the east of Suez. Likewise, the structural deficit in diesel fuel will increase, which will be offset by imports from the US and the Middle East, and perhaps from Russia once the war in Ukraine ends.
Another potential side effect of ECAs relates to speed and route decisions. Speed is a key determinant of fuel costs, as fuel consumption is approximately proportional to the cube of speed. Shipping companies operating both within and outside ECAs face different speed decisions in each zone due to the varying fuel costs. One possible consequence of the restrictions is that vessels will sail at lower speeds within ECAs, where fuel is more expensive, and may increase their speed outside to compensate for the longer sailing time. It has been shown that if a vessel sails at higher speeds outside an ECA to compensate for the time lost within it, total fuel consumption, and therefore CO2 emissions, will increase.
Existing ECA Zones:
The establishment of ECAs has been remarkably successful in controlling marine pollution, but it has had some side effects on the cruise industry. These side effects primarily manifest as increased operating costs. Fuel costs are the main factor affecting total operating costs, and low-sulfur fuel is more expensive than regular bunker fuel, thus increasing the overall operating costs of operating a cruise ship in an ECA zone. ECA regulations also affect speed and route decisions, which are critical determinants of fuel costs.
However, existing Environmental Control Areas (ECAs) have not hindered the development of the cruise industry. ECAs encompass the world's most important cruise homeports, both in the United States, including all of Florida's ports (Miami, Port Everglades, Port Canaveral), and in Europe (Southampton, Kiel, Copenhagen, etc.). As for destinations, ports of call such as Puerto Rico, Bergen, Amsterdam, and Stockholm are also located within ECAs. Cruise ship owners have adapted to these regulations, not only complying with strict environmental standards but also implementing improvements on their vessels that exceed IMO regulations.
In the Baltic, the ECA was implemented in 2006. According to Cruise Baltic, around 2.5 million cruise passengers called at its ports that year. In 2019, the number reached a record high of almost six million cruise passengers. In 2023, there were approximately 4.5 million cruise passengers. This means that the Baltic destination, the first ECA, has practically doubled its cruise tourism, despite the war in Ukraine. However, the number of port calls has only increased marginally, from approximately 2,200 in 2006 to 2,800 in 2019, the record year.
In Alaska, there were 1,719,000 cruise passengers in the summer of 2023. This represents a 19% increase between 2019 and 2023. Furthermore, the share of cruises in Alaska within the overall tourism market grew from 60% to 65% during that period. The North American Cruise Area (ECA) was established in 2012; that year, there were 980,000 cruise passengers in Alaska.
For cruise lines, determining fleet deployment according to ECA zones is a significant strategic decision. Once the ships serving ECA destinations are identified, more tactical decisions follow, such as optimizing speeds, sailing patterns, and port of call sequences, which will reduce fuel costs both within and outside ECAs
In the North Sea, a good indicator is the number of cruise passengers using British ports. In 2007, when the ECA for that area came into effect, around 750,000 passengers embarked from a British port. By 2017, those figures had risen to 1.9 million passengers; in 2022, the 2017 figure was matched; and in 2023, it was far surpassed, reaching a record 2.896 million passengers.
In the U.S.-going Caribbean islands, the impact of their designation as an ECA zone has also been negligible. In Puerto Rico, the number of cruise passengers jumped from 1,364,000 in 2014, the year the ECA took effect, to 1,780,000 in 2019, its record year. In 2024, Puerto Rico registered virtually the same number of cruise passengers as in 2014, a consequence of the post-pandemic downturn that engulfed tourism on the island.
It can therefore be concluded that the introduction of an ECA zone, rather than a hindrance, is an incentive for the cruise industry, due to its trade policy of strict compliance with all environmental legislation, including the goal of net zero emissions by 2050.
Alternatives to comply with the Mediterranean ECA
But the cruise ship companies' commitment to complying with IMO environmental legislation is backed by a huge investment in their fleets. Cruise ship owners essentially have three alternatives to meet the sulfur content standards set by the Mediterranean ECA (or SECA, to be more precise) regulations.
The first approach is to install a scrubber system to remove sulfur from the exhaust gases, allowing cruise ships to continue using HSFO (heavy fuel oil) in any ECA. The second method is to deploy ships in the Mediterranean that run on new fuels, the most popular being LNG (liquefied natural gas), given its zero sulfur content. The final option is to switch fossil fuels, allowing a cruise ship to use HSFO outside ECAs and MGO (marine gas oil) within them. MGO is a clean fuel with an extremely low sulfur content (0.1%) and can be used in ECAs.
This last method is undoubtedly the most widely used, even in combination with the installation of scrubbers. For a vessel operating entirely within an ECA, the capital cost of conversion to use low-sulfur fuel, such as MGO, ranges from $10,000 to $100,000, depending on the vessel, but in any case, it is approximately an order of magnitude lower compared to the other two compliance options. For vessels operating both inside and outside ECAs, fuel switching is a simple compliance alternative. This means that the vessels burn marine gas oil (MGO) inside the ECA, while heavy fuel oil (HSFO) is used outside. The ability to switch fuels is a necessity for ocean-going vessels that move in and out of ECAs, so these ships must maintain two separate sets of fuel tanks, one for HFO and one for MGO. Segregating the fuel tanks would require retrofitting the vessel. Modifications to the fuel system are also necessary, as the HFO must be preheated. However, in the Mediterranean ECA, as in the Baltic ECA, the low-emission zone encompasses its entire area. This means the vessel must always sail using low-sulfur fuels. In the US coastal ECA (except in Alaska), cruise ships can change fuel during the cruise itinerary once they leave US waters and sail a significant portion of the voyage on conventional fossil fuels until they return to their US home port.
Cruise lines like Hapag-Lloyd and Ponant have made the decision to always use MGO, regardless of their ships' itineraries, demonstrating the cruise industry's environmental commitment. Since 2019, the entire Ponant fleet has used marine low-sulfur diesel (MGO), with a sulfur content of less than 0.05%, significantly limiting its atmospheric impact. Ponant was the first cruise line in the world to abandon heavy fuel oil and support international authorities advocating for the extension of the Sulfur Emission Control Area (SECA) to all oceans, as outlined in the Rome Declaration. Hapag-Lloyd also discontinued heavy fuel oil in 2020.
The choice between these two options (MGO and scrubber) depends on the price differential between MGO and HFO. If the alternatives are evaluated according to a range of criteria, such as operating and capital costs, operational difficulty, and maintenance requirements, the results show that shipowners prefer fuel switching for SOx control, while scrubbers may become more important under stricter future limits.
The second option is to install a scrubber, which is a filtration/cleaning system to remove sulfur from exhaust gases. This allows the ship to use HSFO in its ECA (Exhaust Gas Acquisition) system. The implementation of scrubbers in the cruise fleet is significant: according to CLIA, by the end of 2024, 58.3% of cruise ships had scrubbers. In terms of capacity, these ships represent 75.6% of the total. Scrubber technology has evolved in recent years, moving from initial open-loop models to the current closed-loop systems. The waste from closed-loop scrubbers is discharged in port for treatment by authorized environmental management companies.
The capital cost of scrubbers is currently high, ranging from $500,000 to $5 million, depending on the manufacturer and the vessel. The time required for such an upgrade is currently just a slight extension of a typical scheduled dry-dock overhaul. Mediterranean shipyards have carried out numerous such operations.
The third alternative is to use Liquefied Natural Gas (LNG) as fuel. This reduces sulfur emissions and, potentially, many other substances, such as nitrogen oxides. However, its implementation on an existing cruise ship is practically unfeasible because its storage tanks are different from those used for other fuels. Methanol, another future option for fuel-powered ships, faces the same problem. Nevertheless, it is the most widely used option by major cruise line groups, such as Carnival, Royal Caribbean, and MSC. In fact, almost all of the ships these lines operate on Western Mediterranean routes already use LNG (Costa Smeralda, Costa Toscana, MSC World Europa, AidaCosma, Sun Princess). Silversea also sent its two LNG-powered ships to the Mediterranean last summer, as did the Ritz-Carlton's Ilma for its inaugural season. And Royal Caribbean will also send the Legend of the Seas, its third Icon ship, which uses LNG, to the Mediterranean in 2026.
In addition to the significant investments required to modernize ships so they can store and burn LNG, shipping companies must also ensure adequate LNG refueling logistics along their planned itineraries. Currently, only four ports in the Mediterranean have LNG bunkering facilities: Barcelona, Marseille, Trieste, and Gibraltar. Barcelona plays a particularly important role, as it supplies LNG to the entire Carnival fleet (Costa, Aida, Princess, and P&O). This network will need to be expanded into the Eastern Mediterranean to further attract LNG-powered cruise ships to the Mediterranean. The proportion of LNG-powered ships is projected to exceed 10% by 2028.
Fuel costs have become a major expense in shipping, sometimes accounting for more than 50% of total operating costs. Low-sulfur fuel is substantially more expensive than regular bunker fuel, and new ECA regulations will affect international shipping in several ways.
How to demonstrate compliance with ECA legislation:
The country in which the cruise ship is registered must issue an International Air Pollution Prevention Certificate (IAPP). This certificate must include a section stating that the ship uses fuel with a sulfur content that does not exceed the applicable limit, as documented on the fuel delivery notes, or that it has an equivalent approved device. This will be recorded in a Fuel Change Plan, which sets out the procedure for entering and leaving a SECA (Seaside Enclosure Area), as well as in the ship's logbook or record book. Ships carrying fuel oil for use on board must have a fuel delivery note stating the sulfur content of the VLSFO (Very Low Sulfur Fuel Oil) supplied. The logbook must contain all details for refueling and fuel changes, including:
• Fuel volume in the ship's tanks;
• Date;
• Ship's position;
• Etc.
The competent authorities may control the fuel used in an ECA. Fuel samples may be taken for verification by the ship's flag state. The competent authorities in ports and coastal states may use the mechanisms established by MARPOL (“State Control”) to verify that the ship complies with the regulations.
They could also use any other means of surveillance, for example, aerial surveillance to assess the smoke plumes from ships, and other techniques to identify potential violations. This situation is rare, but it has occurred with some regularity, for example, in the North Sea. Failure to comply with the regulations of an ECA zone is punishable by fines.
In Spain, the Maritime Captaincies of the Directorate General of the Merchant Marine, under the Ministry of Transport and Sustainable Mobility, are responsible for carrying out the corresponding inspections. In 2024, they performed a total of 1,112 inspections to verify that the fuel consumed by ships, both in port and at sea, is compliant with regulations and meets the sulfur limits established by the MARPOL Convention.
Of those 1,112 inspections, 11 sanctioning proceedings were opened for not using low-sulfur fuel, none of them to cruise ships, which represents 1% and shows the level of commitment of shipowners to the use of low-sulfur fuels.
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