EU Sets Tougher Limits on Sulphur Content of Shipping Fuels

25 May 2012

The Council of the EU and European Parliament have reached an agreement to set tougher limits on the sulphur content of marine fuels used by ships. Officials say the proposal is meant to achieve a "high level of protection for human health and the environment."

According to an EU press release, the new sulphur limit for marine fuels will be lowered to 0.5 percent for all ships, down from the present 3.5 percent for cargo ships and 1.5 percent for passenger ships. This will be phased in starting from January 2015, and will apply to all ships in EU waters by 2020. An even lower limit of 0.1 percent will be imposed in sulphur dioxide "Emission Control Areas" - the Baltic and North Seas and the English Channel.

Ships can either switch from "bunker fuels" - traditional shipping fuel that is highly polluting - to low sulphur fuels, or they could be allowed to use bunker fuel on a ship with modern filtering technologies, such as exhaust gas cleaning systems. Non-complying ships will face fines set high enough to cancel out any cost savings from non-compliance, officials said.

At least one study estimates that the fuel switch could increase costs by some 60 to 90 percent. Additionally, the cost could be passed on to consumers of final or intermediate goods. With more than 90 percent of global trade being transported by sea, the impact on trade could be significant.

Brussels acknowledged the cost implications of the measure, estimating that the cost of switching fuels or fitting exhaust filters will cost the shipping industry between €2.6 billion and €11 billion. Officials, however, stress that the costs would be far outweighed by public health savings, which they say could be has high as €30 billion.

Officials say governments can help shipping firms offset these costs by making "full use of financial instruments that are already in place [to] promote the development and testing of alternative technologies to reduce emissions from ships."

"Without this directive, emissions from shipping would exceed emissions from all land-based sources by 2020," said Janez Potočnik, the European Commissioner for the Environment.

While sulphur dioxide is not a greenhouse gas, it is highly polluting and has been identified as a contributor to a number of respiratory illnesses. The EU has been working diligently to reign in transport emissions - most notably in the field of climate change. In January of this year, Brussels controversially included aviation emissions into its emissions trading scheme (ETS) and it is rumoured that the bloc is also considering expanding the scheme to include greenhouse gas emissions from shipping.

ICTSD Reporting.

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