A bombshell new report from The Independent has revealed global shipping companies have spent billions rigging vessels with "cheat devices" that evade new environmental legislation by dumping pollution into the sea instead of the air.
More than UK$12bn (NZ$23bn) has been spent on "open-loop scrubbers", which are designed to extract sulphur from the exhaust fumes of oil-powered ships.
According to DNV GL, the world's largest ship classification company 3,756 ships, both in operation and under order, have already had scrubbers installed.
Only 23 of these vessels have had "closed-loop scrubbers" installed, a version of the device that does not discharge into the sea and stores the extracted sulphur in tanks before discharging it at a safe disposal facility in a port.
Astonishingly, the vessels without closed-loop scrubbers will meet standards demanded by the International Maritime Organisation (IMO) that kick in on 1 January.
However, the sulphur emitted by the ships with open-loop scrubbers is simply re-routed from the exhaust and expelled into the ocean.
This greatly increases the volume of pollutants being pumped into the sea and also increases carbon dioxide emissions.
For every ton of fuel burned, ships using open-loop scrubbers emit approximately 45 tons of acidic washwater containing carcinogens including polycyclic aromatic hydrocarbons (PAHs) and heavy metals, according to the International Council on Clean Transportation (ICCT.
The change could have a devastating effect around the world, experts have warned.
Heavy metal pollution has been connected to damage to the central nervous system while PAHs have been blamed for many cancers.
The acidification of the world's waters is currently killing coral reefs, threatening many oceanic food chains.
Bryan Comer, a senior researcher at ICCT, said the use of scrubbers by cruise ships is a particular concern.
Cruise ships with scrubbers will consume around 4 million tons of heavy fuel oil in 2020 and will discharge 180 million tons of contaminated scrubber washwater overboard, the ICCT estimates.
"About half of the world's roughly 500 cruise ships have or will soon have scrubbers installed," said Mr Comer. "Cruise ships operate in some of the most beautiful and pristine areas on the planet, making this all the more concerning."
"Worse, scrubbers increase fuel consumption by about 2 per cent, increasing carbon dioxide emissions.
"Imagine how far $12bn could have gone if it was applied towards developing and deploying technologies for zero-emission vessels."
NZ lags before 2020 deadline
The Herald reported in July that New Zealand's reluctance to adopt international regulations on cleaner marine fuel was causing confusion and uncertainty in the domestic shipping industry as a January 1, 2020, deadline approaches.
Refining NZ - which is responsible for meeting about 70 per cent of New Zealand's fuel needs - doesn't make low-sulphur fuel but oil companies are expected to make available fuel that meets the standard.
Associate Minister of Transport Julie Anne Genter said at the time that New Zealand is a party to MARPOL, an international treaty to reduce various types of maritime pollution.
"Previous governments, however, chose not to sign up to Annex VI of MARPOL which regulates shipping emissions affecting human health and the climate," she said in comments supplied to the Herald.
Genter said she was "keenly aware" that the shipping community needed certainty about signing up to the treaty, and she expected to take a recommendation on this to the Cabinet this year
The ports sector and Refining NZ have made a case for delaying its introduction until 2023.