Benefit & Progress from Passenger Ships?
 

Who benefits from passenger ships?

The State: Receives tax revenues through lighthouse dues and customs clearance fees.
Ports: Income from port and service fees.
Service Providers: Those who directly service the ships.
Ship Agents: Handle services for the passenger ships and manage communications with ports, public authorities, and local suppliers.
Tourism Operators: Organize tours for the shipping companies.
Bus Companies and Guides: Transport tourists to their destinations under guidance.
Suppliers: Provide supplies on board the ships.
Other Service Providers: Repairs of various equipment, entertainers, waste management, etc.
Shops, hotels, airlines, museums: Benfits from all sorts of service providers benefit from tourists visiting by cruise.

In 2023, a survey conducted by Reykjavík Economics on behalf of Faxaflóahafnir and other stakeholders showed that the economic activity of the cruise ship sector in Iceland was estimated at 37.2 billion ISK in 2023. The report indicates that luxury cruise ship passengers spend significantly more than other tourists, with total expenditures of all categories amounting to at least 22-30 billion ISK. The sector has seen a tenfold increase in passenger numbers over two decades. It serves as a stabiliser for the tourism industry overall, as adverse news, such as of volcanic eruptions, do not seem to affect the number of cruise ship tourists.

See the survey results regarding the economic impact of passenger ships on Iceland here.

Fuel Progress

On January 1, 2020, a regulation came into effect stipulating that the sulphur content in marine fuel used in Iceland and its pollution jurisdiction must not exceed 0.1% (m/m). This means that it is nearly impossible to use heavy fuel oil unless ships are equipped with scrubbers that ensure sulphur content does not exceed 0.1%.

The Icelandic Environmental Agency oversees compliance with these rules in Iceland.
When passenger ships dock in Icelandic ports, their main engines are turned off, although the generators remain running due to high energy needs.
All ships at berth are required to use shore power instead of marine fuel if possible.
This also applies to large ships such as passenger ships, but unfortunately, the power grid is not equipped to provide such services as these ships require high-voltage connections.

Faxaflóahafnir is among the first ports globally to offer shore power connections to cruise ships. Cruise ships have been connected to shore power at Miðbakki and Faxagarðar, significantly reducing fuel use while docked.

Air Purification Systems and Waste Progress

Many passenger ships have special filters to prevent soot from being released into the atmosphere.
New air purification systems on passenger ships reduce sulphur dioxide (SO2) emissions by 98%.
Sulphur dioxide (SO2) is a common pollutant released into the environment from the burning of fossil fuels. SO2 emissions are highest from aircraft, followed by cars, and least from ships.
More and more passenger ships are equipped with solar panels to reduce the need for polluting power generation.
Passenger ship operators are committed to ensuring no untreated sewage is discharged anywhere in the world.
All waste on passenger ships is sorted and delivered to reception facilities in port.

Progress by environmental actions by cruise ships are numerous and targeted with great progress, with operators aiming for carbon neutrality using biofuel, hydrogen, electricity, and sails. In Iceland, Faxaflóahafnir has implemented the Environmental Port Index (EPI) system, and more ports plan to introduce it. Additionally, the Port of Akureyri has already begun data collection based on the Environmental Port Index (EPI) with the aim of mapping the success of the system’s implementation when EPI-based charges are permitted. Increasingly, shore power is being offered to smaller cruise ships, with plans to extend this to larger ships by 2027. The system enables ports to define the environmental footprint of cruise ships during their stay and introduces financial incentives for more environmentally friendly and sustainable operations.

Air quality measurements for 2023 show that pollutant levels such as sulphur dioxide, nitrogen compounds, and particulate matter were well below regulatory limits at Skarfabakki, according to regulation 920/2016. This was also the case in 2022. Results can be found here, with data processed and analysed by Vatnaskil. Measurements were conducted using air quality stations in Laugarnes, operated by Vista, and another station at the Lundur preschool. Most of the pollution detected could be traced back to traffic and volcanic activity on the Reykjanes Peninsula, rather than specifically to cruise ships. Air quality stations track wind direction and speed to trace the source of pollutants. They also used data on ship presence at Skarfabakki. In all cases, nitrogen compound levels were well below limits, as were levels of other substances.

Innovation Progress

Passenger ship operators emphasize innovation progress by renewing their fleets with the best available technology.
An increasing number of passenger ships are powered by natural gas (LNG).
Operators are investing hundreds of billions of ISK to make ships more environmentally friendly, as most countries now require it.
There are exciting opportunities to develop new services and products for cruise ships and their guests, increasing the variety of entertainment, tours, software, and various service components.
Thus, Icelandic creativity and innovation can further enhance the value and economic benefits of this rapidly growing service sector.

Benefit of Passenger Limitations (CAP)

Several municipal ports have realised the benefit for implimenting passenger limitations (CAP) to ensure infrastructure can manage the tourist flow. Grundarfjörður Port has limited the number of guests to 4000 passengers, Seyðisfjörður Port to 3500 passengers, Borgarfjörður Eystri to 500 passengers, and Djúpivogur to 2500 passengers. Ísafjörður has planned limitations for 2025 and 2026, with bookings already in place for 2024. The optimal number for Ísafjörður Port is 5000 passengers, with a maximum of 7000. Akureyri is currently working on policy development in this regard.

Reykjavík City and Faxaflóahafnir have started formulating a policy on the carrying capacity and reception of cruise ships in Reykjavík, in collaboration with the official tourism organization Visit Reykjavík. The project’s goal is to create a shared vision among stakeholders to define load management measures that impact the community, nature, economy, and local environment. The project supports Action C.7 in the government’s tourism policy and action plan until 2030, focusing on collaboration on cruise ship reception and infrastructure utilization to create value in harmony with society and nature. A steering group with representatives of key stakeholders has been appointed, and this is the first of three phases, culminating in a policy document with a shared vision on the carrying capacity and reception of cruise ship passengers in Reykjavík. Other phases will follow, including the formulation of an action plan, implementation, and execution. Cruise Iceland is part of the steering group.

Guidelines for Tourists

On October 29, 2018, Iceland became part of the AECO operational area.
The Association of Arctic Expedition Cruise Operators (AECO) is an international organization of expedition cruise operators and their partners in the Arctic, dedicated to environmentally friendly, safe, and considerate cruise operations. AECO has about 70 international members, including 40 ship operators, owners, and managers, and 50 expedition cruise ships, representing many of such operations in the Arctic. AECO members transported 26,000 passengers to Svalbard, Greenland, Iceland, Canada, and Franz Josef Land in 2018. Cruise Iceland and North Atlantic Agency in Iceland are AECO members.
The association’s operational area includes Svalbard, Jan Mayen, Greenland, northern Canada, and the Arctic National Park in Russia, as well as Iceland since 2019.
The association has established numerous rules that its members must follow, including rules regarding operations, wildlife, guests, specific locations, and more.
In 2019, the first AECO guidelines for turists for Seyðisfjörður were issued. These guidelines were developed in collaboration with local stakeholders.
The Environmental Agency has also issued guidelines for the Hornstrandir Nature Reserve. Guidelines for tourism operators can be found here.

What are cruise ship operators doing for the environment? Learn more here.