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A Green Agenda is Top of Mind for the Cruise IndustryMarch 26, 2009 By: Susan Young
“Even in a recession, maybe especially in a recession, environmental issues must remain a priority for our company and for our industry, certainly in these times” said Adam Goldstein, president and CEO, Royal Caribbean International, in delivering a report card on the cruise industry’s environmental report card at Cruise Shipping Miami in March. “Climate change has emerged as the defining environmental issue of our time for all industries.”
Dan Hanrahan, left, president & CEO of Azamara Cruises & Celebrity Cruises, speaks during the State of the Industry discussion at the Cruise Shipping Miami Conference & Exhibition. Other cruise line executives who participated include, from second-to-left, Kevin Sheehan, president & CEO of Norwegian Cruise Line; Stein Kruse, president & CEO of Holland America Line; Rick Sasso, president & CEO of MSC Cruises (USA); Adam Goldstein, president & CEO of Royal Caribbean International & Gerry Cahill, president & CEO of Carnival Cruise Lines.
Goldstein also said that “the protection of the marine eco-systems is a special responsibility that we have. It’s both necessary and good for the environment, for our guests and for our investors. It’s good for business.”
In order to be successful in the future and to continue to provide guests with a fabulous and environmentally friendly vacation experience, he said the cruise industry understands it must take action to protect the priceless assets of the environment.
“The green agenda is obviously omnipresent today,” Goldstein said. “It’s a global phenomenon. Much greater than travel [as a focus], it’s about our future, it’s about our children’s future, and children ‘get’ that. It requires our active participation to do right by the environment. Passivity – being passive – is not an option.”
He said individual lines can do much to be proactive. And he noted there are external opportunities for the cruise industry to demonstrate leadership given its positive impact of $38 billion on the economy of the United States. For example, Goldstein serves on the Energy Security Leadership Council, a group of business CEOs and retired top military leaders. The group has pushed for national energy policies to enhance U.S. national energy security and provide a platform for solutions to climate change.
Dan Hanrahan, president & CEO of Azamara Cruises & Celebrity Cruises and Kevin Sheehan, president & CEO of Norwegian Cruise Line examine their notes just prior to the State of the Industry discussion.
Goldstein noted this is “a pivotal year” as the world approaches environmental meetings in December in Copenhagen. Under the umbrella of the United Nations, global leaders will meet to discuss a new environmental treaty to replace the Kyoto Protocol.
Goldstein said the industry via CLIA is actively working closely with Conservation International on climate change issues. He also noted that the cruise industry is part of the shipping industry so it looks to the IMO (International Maritime Organization) for leadership to ensure environmental sustainability on the oceans.
But given the differences between cruising with its hospitality features and the rest of the shipping industry [where hauling cargo is the prime business], Goldstein acknowledged that regulation is not an easy task: “it’s a balancing task of the first order.” Goldstein said the cruise industry recognizes the need for reasonable standards in reducing its carbon footprint, reducing emissions and protecting the environment in other ways. Ultimately, he said the cruise industry wants to contribute to the development of solutions.
But he stressed that it also wants to be treated fairly in a broader context. He cited Alaska as a place with varying standards of regulation. In the aftermath of a voter referendum a few years back, “we are being held to a wastewater discharge standard that we don’t know how to meet today, while other Alaska industries are not required to meet those same standards,” stressed Goldstein.
He noted that the industry does understand that the areas of Alaska it operates in are exceptional and that’s the reason why guests want to be there. “We simply ask to be held to the same reasonable standards -- achievable standards -- as [other] industries.”
Elsewhere, he said both Royal Caribbean and the industry have been focused on maximizing energy efficiency – with the goal of reducing greenhouse gas emissions and reducing operating costs. “There has been an aggressive pursuit in many areas, which are already paying energy dividends,” Goldstein said.
He cited optimization of hull design and investment slick hull coatings; pioneering next-generation LED and compact florescent lighting to replace halogen lights and incandescent lighting; introduction of highly efficient heating and air conditioning systems; the pursuit of heat recapture from machinery.
Goldstein also cited the industry’s efforts to work with guests and crew on operational measures. “Use less water,” he stressed. “Turn off the lights. Put the AC setting on neutral. Reuse your towels. It all helps.”
He noted that some of the industry’s most important work has been done in the area of itinerary management – essentially adapting itineraries to become more fuel efficient on the operational side. Goldstein said the industry is now balancing guest satisfaction with fuel economy in ways it would have never thought about five or 10 years ago.”
More is on the way, he said, citing cold ironing opportunities (the use of shore power to run ships while docked, rather than having the ship generate its power from onboard power generation) as one option. He also said the industry was investigating new scrubber technologies and looking at future new potential energy sources that are not fossil fuels.
On top of efforts to manage its energy footprint, the cruise industry is strongly dedicated to managing its waste streams, he said. “We are proud as an industry of the progress that we have made, and in many ways we lead the world in this area – for example, in our efforts in advanced wastewater purification (AWP), in recycling and generally in waste management.”
Thus, Goldstein said, the industry now approaches the climate change issues with the same degree of intensity that it puts into developing activity options for guests. He also said the industry becomes frustrated at times when the media portrays the industry as being less than environmentally responsible citizens.
“The only anecdote to that is to continue to demonstrate unquestioned environmental leadership for as long as it takes for everybody to understand the leadership role that this industry plays,” says Goldstein. He noted that investment in several hundred million dollars across the industry in the AWP systems is the key to that.
“In summary, we recognize the magnitude of the challenge,” said Goldstein. “We are completely aware of the significance to our collective future. We want to be actively engaged as a company and as an industry in being part of the solutions regardless of the economic situation.”
Also at Cruise Shipping Miami, Stein Kruse, president and CEO, Holland America Line tackled the issue of “cold ironing” -- using shore power while at dock. Half of HAL's fleet is cold ironing equipped.
But for cold ironing to truly have a positive effect on the environment in terms of emissions, the source that a ship draws its land power from must be clean, he said.
It’s optimum for cold ironing power to come from such clean sources as hydroelectric power, wind power or solar power. “If you’re just drawing power from a coal burning power plant or an oil burning plant, you’re simply just transferring the problem,” Kruse stressed.
Kruse also said it’s necessary for the destination to have excess power as it takes a lot of power to run a ship. Cost-wise, he said the technical requirements of outfitting a ship for cold ironing is about $1 million per ship, with a bit more than that needed for any shoreside installation including the transformer. Half the Holland America Line fleet is now capable of hooking up to shore power in ports where that’s available
West Coast ports have taken a leadership role in cold ironing, Kruse said, but “there is no doubt that shore power connection hook-ups are coming [in many places in the world],” Kruse stated. “It’s just a matter of when not if.”