Ports of LA and Long Beach Approve Low Sulfur Fuel Incentive for Vessels

25 March 2008

In a special joint meeting, the Los Angeles and Long Beach (California) Boards of Harbor Commissioners have approved a low-sulfur fuel incentive for ocean-going vessels (OGV) to encourage vessel operators to switch to low-sulfur fuel (0.2% sulfur) within 40 miles of the ports of LA and Long Beach.

Use of low-sulfur fuel will cut sulfur oxides by as much as 11% and particulate matter by 9%.

Under the incentive proposal, the ports will pay the difference between the price of bunker fuel and the more costly low-sulfur distillate fuel for vessel operators who make the fuel switch within at least 20 miles and out as far as 40 miles from the ports.

Vessels will also be required to use low sulfur fuel in their auxiliary while at berth in the port complex. To qualify for the incentive program, the ships must also participate in the ports’ voluntary Vessel Speed Reduction Program, limiting speeds to 12 knots during the switch to low-sulfur fuel. Most ships already participate in the speed reduction program, which also curbs emissions.

The incentive program is expected to cost the Port of Los Angeles as much as $8.6 million and the Port of Long Beach as much as $9.9 million annually. The staff proposal is for a one-year program, which would begin July 1 and expire June 30, 2009, unless extended by the two commissions.

The program was developed in partnership with the Pacific Merchant Shipping Association.

On 1 July 2009, a pending California Air Resources Board regulation would require the use of low-sulfur fuel (with a limit of 0.5%, going to 0.1% or 0.2% in January 2012) in cargo vessels’ main propulsion engines within 24 nautical miles of the state’s coast. The ports’ Clean Air Action Plan also calls for the ports to accelerate ship emission reductions by including lease-based limits on sulfur content in fuel. This is still planned. The incentive program is aimed at reducing more emissions on an even faster schedule.