Sulphur reduction targets for fuels will make “ferries uncompetitive”, say owners

The price of a sea crossing will soar, threatening jobs and businesses, unless ferry operators are exempted from imminent environmental regulation, shipowners have warned.

The UK Chamber of Shipping claims that the cost of new laws on sulphur emissions that will apply within the North Sea and Channel will mean longer ferry routes are no longer viable or competitive.

Regulation on shipping lags far behind laws on land-based pollution, with low-grade ship fuel having up to 2,000 times the sulphur content of diesel used in British cars. While the shipping body says it agrees that there is “a clear and unequivocal need” to reduce poisonous sulphur emissions from ships, it argues that the deadline is not feasible for UK operators.

Research it has commissioned from consultants Amec claims that absorbing the costs would mean ticket prices rising by between 5% and 29% across routes from Britain to continental Europe – pushing more traffic towards shorter crossings and meaning more lorries on the roads.

Shipping operators will be required to reduce emissions under an annex to a global maritime pollution convention, which designates the seas to the east and south of Britain a sulphur emission control area. Currently ships here have to use fuel with less than 1% sulphur content, compared with 3.5% for heavy fuel oil used elsewhere.

From 2015, the limit will be cut to 0.1%, forcing ships to use much cleaner fuel or employ technology to cut emissions. However, upgrading the UK’s ageing ferry fleet to run on liquefied natural gas or fitting sulphur “scrubbers” is seen as too onerous and expensive, and the chamber argues the technology is in any case unproven. That leaves operators switching to fuel that costs about 30% more. The shipping body claims this could affect the price of diesel for road users, with an increase of up to 2.8p a litre as demand for limited refinery supplies grows.

The International Maritime Organisation has set a global requirement for 0.5% sulphur in fuel by 2020. Action came after a belated recognition of the pollution caused by shipping, with sulphur emissions held responsible for thousands of premature deaths each year. The EU’s environment commission says the bill the continent’s shipping industry faces to clean up its act will be far outweighed by money saved on public health.

The chamber is to lobby transport ministers next week to secure exemptions for a limited number of ferry operators who operate entirely within the cleaner air zone and who, it claims, could go out of business. A steep rise in oil prices since the 2008 agreement has made the switch to cleaner oil a substantially greater expense.

David Balston, its director of safety and environment, said: “We fully support the need to reduce sulphur emissions from ships – but we are particularly concerned that many routes will become non viable and for those vessels operating on them we seek transitional arrangements, including very tight time limited exemptions to allow technology to catch up and provide a realistic alternative. We must protect our maritime jobs and the environment – this report shows these regulations do neither. The wider impact is hard to quantify – but these regulations will make the UK less competitive, making us a less attractive country for international investors – at the worst possible time for the UK economy.”

A Department for Transport spokesperson said the government would “carefully consider the findings” of the report, stating: “We support the aims of the Marpol convention to bring about a reduction in pollutant emissions, an improvement in air quality and consequent benefits for human health. We are aware of concerns about increased operating costs and last year ministers invited the maritime industries to consider the impact of the new sulphur limits for marine fuels.”

Source: The Guardian, 11th March 2013

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