When it comes to environmental sustainability, very few
industries face more elementary challenges than cruise ships. To
conform to the environmental regulatory standards,
) announced its plans to invest $400 million to reduce pollution
generated by its ships by more than 70%.
This announcement follows Carnival's announcement in April
regarding its targeted 20.0% reduction in greenhouse gas emissions
from shipboard operations by 2015. The company has already reduced
gas emissions by 19.0%.
The current expansion will cover 70 ships out of its current fleet
of 101 within the next three years. The improvements will be
carried out in 22 Carnival Cruise Lines ships, 9 Holland America
Line ships, 7 Princess Cruises ships, 3 Cunard vessels and dozens
of others in European cruise lines on AIDA Cruises and Costa
The cruiser company's decision comes after the International
Maritime Organization (IMO) recently capped sulfur within Emission
Control Areas (ECAs) at 1.0%, which is expected to drop to 0.1% in
2015. Further, the IMO's global sulfur limit for seas, other than
specifically designated ECAs, is currently 3.5%, and is expected to
drop to 0.5% by 2020.
Owing to April announcement, the Miami-based cruise operator
announced its plans to install scrubbers on 32 ships, to meet
pollution restrictions by the Environmental Protection Agency and
the IMO in September last year. Carnival installed a special
exhaust gas cleaning technology - ECO Exhaust Gas Cleaning
(ECO-EGC) - proven to eliminate key pollutants from exhaust gases
of a ship at sea, during maneuvering as well as at the port.
Carnival's pollution-reduction system combines technologies that
have been successfully used in onshore applications like power
plants, factories and vehicles to remove high-sulfur content from
exhaust fumes. Carnival will use a two-sided system - one to reduce
particulates from the ship's engine emissions, and another to use
seawater to purify sulfur compounds from the exhaust gases.
Therefore, Carnival's advanced ECO-EGC systems conform to both
North American and global IMO standards. Apart from this, it will
help the cruiser company to lessen the swelling fuel costs.
Additionally, as a result of the September announcement, Carnival
Cruise Lines will be able to return its ships to the registered
ports in Baltimore and Norfolk in 2015.
For all the seemingly inherent wastefulness of the cruise industry
and activists accusing these companies of taking environmental
regulations lightly, Carnival - one of the worlds's leading cruise
operators - seems to have taken a step in the right direction. With
intense effort to lower wastage, cut fuel consumption and generally
reduce their impact on the earth, Carnival is striving to enhance
sustainability and improve its environmental friendliness.
Carnival, currently, carries a Zacks Rank #3 (Hold). Better-ranked
stocks in the same sector include
Royal Caribbean Cruises Ltd.
Regal Entertainment Group
Speedway Motorsports Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
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