Maritime UK Warns that Sulphur ECA Regulations May Increase Bunker Fuel Costs

In a submission to the Transport Select Committee on Monday, Maritime UK warned of the potential side effects of plans proposed by the International Maritime Organisation (IMO) and the EU to reduce the levels of sulphur fuel, saying: “These regulations will create considerable financial, logistical, societal and even environmental impacts”.

The body highlights some of the likely major consequences of applying 0.1% low sulphur fuel that include:

• An average activity shift of 50% from sea to land in Emission Control Areas, increasing congestion and road pollution, raising fuel prices and undermining current efforts to reduce road freight by promoting short sea shipping

• An additional 12 million tonnes of carbon emissions in Europe alone through hydro-treating heavy fuel oil to meet requirements

• An increase in people using less environmentally friendly air travel as longer ferry routes close and cruise prices rise

• Considerable job losses in UK ports and associated infrastructures; especially if ‘fly cruises’ become the norm to avoid setting sail from ECAs.

Maritime UK requested an investigation into the effects of new legislation in Emission Control Areas (ECAs) in July and Monday’s submission is in response to a call for evidence from the Transport Select Committee on the issue.

Studies cited in the submission agree that the 2015 application of 0.1% low sulphur fuel would see an average activity shift of 50% from sea to land in ECAs, creating greater congestion on the roads and higher costs at the pumps as the shipping industry competes for their share of the fuel market. “Forecourt price rises are not likely to be popular with domestic drivers… nor with farmers who are already being squeezed by recent increases in fuel prices.”

Current efforts by shipping Minister Mike Penning to reduce road freight by promoting short sea shipping would also clearly be undermined by these fuel plans.

The submission also expresses concerns that the “net environmental benefits” of sulphur reduction will be lost under current proposals, and not just from a resulting increase in road pollution. A physical lack of availability of the desired criteria of fuel means the cost of hydro-treating heavy fuel oil to meet the requirements could add a further 12 million tonnes of carbon emissions within Europe alone.

With the likely closure of longer routes for ferries, a hit to port revenues in the cruise sector and price rises acrossboth, more people will make the switch to less environmentally friendly air travel. This would have the dual impact of affecting the UK’s ability to meet its carbon targets, as well as driving unemployment. The submission states:

“Job losses in UK ports and associated infrastructures could be significant… if ‘fly cruises’ become more of a norm then the UK ports currently the home of many cruise ships will face considerable job losses, the jobs going to Mediterranean and/or other non-ECA ports.”

The body highlights that the industry does recognise the sulphur problem, “Maritime UK fully acknowledges the need to reduce emissions of SOX from shipping for environmental and health reasons.” However, it stressed the need to avoid such likely impacts of the new regulations “that will impose considerable hardship, particularly on smaller companies with limited cash flow”.

[mappress]

Source: British-Shipping, October 7, 2011.