Exhausting the Options
Major Boat Manufacturers Attempt to Comply with 2021 Marine Diesel Emissions Rules
From Maine to Italy, from one-traffic-light North Carolina hamlets to the Taiwanese coast, boatbuilders churn out vessels one at a time in converted Quonset huts or several per week on busy production lines at massive facilities. While many builders are currently riding on the ascent of fortune’s wheel, it remains a tough business imbued with vivid memories of bleaker times. A handful of today’s major players have weathered storms that wiped their competitors off the map. One such builder is Viking Yachts, which survived—and lobbied against—the 10 percent luxury tax that devastated the industry for three years before being repealed in 1993. Afterwards they became what they are, stalled by the late aughts recession but always investing in their product, emerging stronger than ever.
An emission regulation set to go into effect next year is now threatening costly implications for not only Viking’s flagship products but builders of large yachts throughout the world. Taking a cue from the past, Viking President and CEO Pat Healey didn’t stay on the sidelines with a wait-and-see attitude but instead adopted an offensive scheme to address it, with a big press event at last year’s Ft. Lauderdale boat show.
The NOx Tier III emission limits for marine engines has actually been around since 2016, but the International Council of Marine Industry Associations (ICOMIA) won a five-year extension for recreational yachts that expires in 2021. What it calls for, in a nutshell: All vessels with a load line length greater than 78 feet (the total length of a ship’s waterline measured from the top of the keel, or the length from the foreside of the stem to the axis of the rudder stock) will require the installation of Selective Catalytic Reducers (SCR) that scrub emissions via urea. While this sounds like simple, engineering bolt-on, adapting the systems to an existing vessel is complicated, costly and according to many will not have the environmental impact the regulations are designed to address.
Before Healey’s press conference, there was little talk about the impending regulations. This may have been because ICOMIA and many others were confident they’d again be granted an extension—perhaps too confident. And when that failed, with little hope for an upcoming appeal, the issue really hit home. “It’s going to affect this industry like the luxury tax,” Healey said as he spoke to dealers and the press at the show, opening up on how, along with the NMMA and MTU, Viking had spent the last couple of years in negotiations. “How do we live with this?” Healey asked the assembled. “[The] regulations did not consider builders and engineers … and in the end, it’s about jobs.” Viking revealed their plan to suspend production of their 92- and 93-footers and furlough the builders of those boats until an engineering solution from both builder and engine manufacturer can be reached.
“We are all concerned,” Galati Yacht Sales head Carmine Galati told me from the spacious engine room of a Hargrave G120. While a boat of this size has more capacity to accommodate a mandated SCR—it would still take up considerable room—other vessels would require what essentially adds up to a redesign. ICOMIA Technical Consultant Patrick Hemp summarized: “SCR require a large amount of additional space to be made available in the engine room … our initial study found that the majority of engine room bulkheads would need to move approximately 1 meter [3.208 feet]. This will have a major impact on the interior layout.”
Based on renderings supplied by Viking, what Hemp explained is spot-on: SCR installed above the powerplants run the entire length and width of the engines. “If we install the systems, we have no room to work on the engines,” Healey said. And this doesn’t take into account the urea, not widely available and which needs a dedicated tank to be approximately 10 percent of the fuel load and topped off when the mains take on diesel. (On a Viking 92 Sky Bridge, that’s over 400 gallons of urea.) The SCR also generate a significant amount of heat that will require additional engine room ventilation.
Designed for commercial sector vessels and cruise ships, an SCR doesn’t come online until about 80 percent engine load, the norm for a working vessel but an often rare occurrence for recreational cruising. “One of our primary points [for the extension] was to highlight the inefficiency of carrying around SCR units and urea tanks … There is a marginal NOx savings but increased greenhouse gas emissions due to the inefficiency of SCR,” Hemp said.
Nearly everyone I’ve spoken with has claimed the gains are minimal on recreational craft. “It appears the data states very little environmental impact and considerable costs,” Galati said. Hargrave Custom Yachts President Michael Dicondina told me that he had an SCR system installed on a 186-footer that he had built to commercial code, but smaller recreational yachts “are not the same as a cruise ship or commercial boats that operate for longer periods and at higher loads.”
Like others in the industry, Dicondina does not see it going away (“We’re gonna have to suck it up,” he deadpanned) but recognizes that engine manufacturers and boatbuilders need more time to get ready for the systems’ impact and a price increase. A yacht with an SCR is estimated by ICOMIA to increase in cost from $550,000 to over $1.3 million, perhaps enough to scare buyers back to the sideline.
As Viking and engine manufacturers work on sizing down the system for boats in the 90- to 130-foot size range, they also are continuing to lobby for an appeal. “As of now, the technology does not exist [to size down the SCR],” Executive Co-Chairman of Viking Bob Healey told me. “Another extension may allow us to design a smaller system.” For now, the millions in tooling that Viking has in its 92 and 93 Yachts may have to be scrapped for a redesign to accommodate SCR.
Viking may be the largest American builder to be impacted, but you can be well assured that Italian, Turkish and Asian builders with qualifying craft are working with engine manufacturers and their own in-house R&D teams to find a solution. When I reached out to ICOMIA to get an idea of how the European builders are planning for the fast-approaching mandate, I got a quick reply from Secretary General Udo Kleinitz: “Given the proximity of the 2021 compliance date I would expect every builder to be now in full preparation to comply with Tier III at least as a backup option should any proposals fail,” he said, adding that the probability of successfully delaying the regulations is very low.
Looking at the facts, it seems builders and the engine companies thought an extension was inevitable. No builder is suggesting dropping production of qualifying vessels into overdrive to beat the deadline—boats with keels laid before January 1, 2021 are exempt—but to continue lobbying and utilizing their investments in R&D to come up with a solution. In an industry where altruism and mutual respect for competitors goes a long way, perhaps a united front of builders with the mutual goal of solving this issue will do just that.
This article originally appeared in the February 2020 issue of Power & Motoryacht magazine.