Thursday, August 16, 2012

California Grants Boost Public Health and Vessel Owner Capital

By Suzanne Seivright

Air along the coast of California will be a little cleaner, and vessel owners and operators will spend less on fuel, thanks to government grant dollars that target older, polluting marine engines.

Catalina Express offers year round service from the Ports of Long Beach, San Pedro, and Dana Point to Catalina Island for more than one million passengers each year. Over the last ten years, Catalina Express has partnered with the Port of Los Angeles, using government grants, to replace most of the propulsion and auxiliary engines in six of their fast ferry vessels.

“The Port of Los Angeles is working on many fronts to reduce the harmful emissions here at the Port. We’ve had great success in the last several years; we’ve reduced emissions approximately by 50 percent or more throughout the Port over the last 6 years. So, it’s partners like Catalina Express and doing everything on land and sea to clean up the air that is making this a success” says Phillip Sanfield, Spokesman for the Port of
Los Angeles.

Partnerships between vessel owners and operators and government agencies, through grant programs, not only benefit public health significantly, but also reduce a vessel’s capital expenditures related to fuel costs, regulatory compliance and other factors. In some cases, switching to newer diesel engines can substantially reduce fuel consumption.

Marine Engine Government Grants
Grants inclusive of the Carl Moyer program, administered by agencies such as the South Coast Air Quality Management District, have offered varied opportunities to vessel owner and operators intended to inspire strategies for reducing air pollution. Grant funds replace or retrofit older, high-emission diesel marine engines and result in substantial reductions in nitrogen oxide (NOx) emissions, an ozone precursor pollutant, and toxic diesel particulate matter (PM).

Sam Atwood, Spokesman for the South Coast Air Quality Management District, says “Reducing the air pollution emissions from commercial marine vessels is a very important piece to the entire puzzle of reaching our federally mandated air quality standards. Commercial vessels, of course, have very large diesel marine engines, and they can be a large source of nitrogen oxide emissions which is typical for a diesel engine.”

Marine vessel grant applications are evaluated on the cost effectiveness for reducing NOx and diesel PM based on annual fuel use, rated horsepower, engine emission factors, and the cost of the new engine.

Under these government grant programs, funding is restricted to the use of engines that have been verified by the US Environmental Protection Agency (EPA). “Technology has evolved to make diesel engines more efficient and cleaner than ever,” says Gina McCarthy, Assistant Administrator for EPA’s Office of Air and Radiation. Government grants enable owners of older diesel engines to make investments that modernize their equipment while making the air in their communities cleaner and healthier.

Grants typically cover up to 80 percent of the total cost of the approved marine engine, related labor, sales tax, shipping costs, and other costs related to vessel modifications needed to install the new engine.

Vessel owner and operators invoice the government agency, and are required to destroy and render useless the old engine that will be taken to a metal recycling/salvage yard. After the grant project is complete, vessel owners and operators are required to maintain their new engines as recommended by the equipment manufacturer and must submit operation reports to the correlating government agency. Vessels are typically required to demonstrate historic usage in ports, estuaries, and bays within 24 nautical miles of California’s coastline.

“As tug boat operators, such as the Sause Brothers have shown, it’s practical and very feasible to change out older diesel engines for newer and much cleaner models,” says Sam Atwood. “Through the Carl Moyer funding, I believe that most of the tug fleet has already been retrofitted to cleaner power. So this is something that is feasible and [a] very important piece of the puzzle, especially when we can get significant cost effective reductions of nitrogen oxides from these commercial vessels.”

‘Commercial Harbor Craft’ Regulation
Grant programs typically only reduce emissions from marine diesel engines that are surplus to government regulations. Pursuant to Carl Moyer grants, eligible vessels include fishing, ferry excursion (whale watching, harbor cruises, diving), tugboat, towboat, and other applications that must have their grant project completed at least three years prior to regulatory compliance deadlines.

On November 15, 2007, the California Air Resources Board (CARB) approved the ‘Commercial Harbor Craft’ regulation to reduce emissions from diesel engines on commercial vessels that operate in regulated California waters. The regulation supports the “Risk Reduction Plan to Reduce Particulate Matter Emission from Diesel-Fueled Engines and Vehicles” adopted by CARB’s Governing Board on September 30, 2000, and the “Goods Movement Emission Reduction Plan” adopted in April 2006, as well as the current State Implementation Plan.

The regulation establishes in-use emission limits for both propulsion and auxiliary diesel engines of ferries, excursion vessels, tugboats, towboats, and other specified vessel applications consistent with the US EPA marine engine emission standards.

The regulation’s goal is to reduce the public’s exposure to diesel PM and NOx by requiring vessel owners to replace in-use engines with cleaner Tier 2 and Tier 3 engines. Additional information regarding the ‘Commercial Harbor Craft’ regulation can be obtained at

Reduced Capital Expenditures
Some vessel owners and operators have claimed cuts of nearly 50 percent in fuel consumption once new diesel engines are installed, which results in savings from day one of operation. Do the math – calculate the capital expenditure (the price of the new equipment and boatyard labor) in relation to potential grant funding, fuel savings, and other factors such as regulatory compliance in order to realize what a grant truly means to a marine vessel and overall business operation.

In addition to grant funding, some government agencies have partnered with financing authorities to encourage banks and other institutions to make loans to small businesses that have difficulty in obtaining financing. For example, CARB in coordination with the California Capital Access Program, established a loan guarantee program to provide $5 million in loan assistance to business owners of marine vessels for diesel engines. This is a one-time loan assistance opportunity with the objective of assisting vessel owners to upgrade their marine vessels for early compliance with CARB’s ‘Commercial Harbor Craft’ regulation. Participants are limit to companies with fewer than 500 employees in addition to other requirements which can be viewed at

Vessel owners and operators should consider any or all government grant programs to enhance short-term and long-term goals. The Carl Moyer program has allocated funding annually since its inception, and hundreds of vessels have had engines replaced or retrofit taking advantage of this “free money”. Grant programs are typically administered through a government organization such as a local air district, state agency, or port authority. The applications are fairly straightforward to complete, however, vessel owners and operators should discuss potential projects with a grant coordinator early in the process to make sure its proposed project is eligible and to determine the best approach to ensure funding.

Suzanne Seivright is the Manager of Regulatory Affairs and Compliance at Valley Power Systems, Inc. She has experience in the environmental field working in both the public and private sectors. Seivright has focused on legislation and rules related to engines, existing fuels and their respective opportunities and challenges, engine emission control devices, and alternative fuel/advanced vehicle technologies. She has been instrumental in identifying opportunities that includes market and channel development, collaborating with early adopters, and sourcing of government funding.