Carbon emission rules worry cash-strapped lines

As the deadline for the
reduction in carbon emissions
ruling draws closer, shipping
lines are calling for clarity on
enforcement as they count the
cost of compliance.
European Union (EU)
rules – stating that all ships
operating in the North
Sea, Baltic Sea and English
Channel will have to use a
fuel with a maximum sulphur
content of 0.1 percent – will
come into effect on
January 1 next year.
Meanwhile, all ships across
the globe will, by 2020, have
to abide by International
Maritime Organisation
(IMO) rules dictating a
sulphur content limit in fuels
used of 0.5 percent.
Mads Stensen, Maersk
Line’s global adviser –
sustainability, told FTW that
the line supported the new
EU regulation as it would
reduce sulphur emissions by
90% but added that there
were “significant” additional
costs related to switching
from the current 1.0 percent
sulphur fuel to the new 0.1
percent version. “We have
estimated our additional
costs to be approximately
US$200 million per year,”
he said.
Danish transportation
group DFDS issued a report
last month on
the impact of
the sulphur
directive,
noting that
switching to
marine gas
oil (MGO) which has the
required 0.1 percent sulphur
limit on the EU routes would
cost the shipping industry a
total of around ¤300 billion.
“As a result, the costs of
shipping will increase,” said
the DFDS report.
But aside from the costs,
there seems to be a lack of
clarity on how enforcement
will work as, according to a
statement by the European
Commission, each EU
member state is responsible
for deciding its own methods
of enforcement, including
penalties.
An industry source said
that many countries had yet
to decide on the penalties,
how to monitor the sulphur
content or how frequently
to check ships. The source,
who wished to remain
anonymous, told FTW that
this created the risk that
many firms would choose
to simply wait to be fined
or penalised rather than
go to the upfront expense
of changing fuels or fitting
new technology to ensure
compliance.
Stenson noted that if the
regulations were not enforced,
compliant companies could
face a major financial burden
and would, in the worst case
scenario, not be able to compete
with noncompliant
operators
in the longrun.