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Report: 2015 targets could cause adverse environmental effects

11 Mar 2013 13:02 GMT

Report claims that sulphur reduction targets could increase carbon emissions and result in the loss of up to 2,000 jobs.



A new report, published by AMEC Environment & Infrastructure U.K. Ltd. (AMEC), says that targets for shipping companies to reduce their sulphur emissions by 2015 could cause adverse environmental effects and result in the loss of 2,000 maritime services jobs, and place many more industrial jobs under threat. The report is the first of its kind to examine the full impact of hitting sulphur targets.

The report, commissioned by the UK Chamber of Shipping, on behalf of several North Sea and Western Channel shipping operators, provides details regarding the impact of reducing sulphur from ships’ emissions before the current deadline of 2015. The report claims the key impacts of hitting the 2015 sulphur reduction targets would be:

* Much more freight moved by road, rather than sea, thus increasing carbon emissions and causing more road congestion.
* Up to 2,000 jobs put at risk in maritime engineering, navigation, catering, customer services, and other areas.
* An increase of 2.8p per litre for the cost of road diesel.
* Significant increases (up to 29 percent in some cases) in the cost of passenger and container route ticket prices.

"The UK Chamber and the shipping operators who commissioned the report agree that there is a clear and unequivocal need to reduce sulphur emissions from shipping for both environmental and health reasons. However, the speed at which shipping operators would be required to meet reduction targets, at huge cost, without sufficient technology in place to support the changes, along with the failure to date for these targets to take account of the overall need to reduce carbon emissions has been causing ship operators great concern for some time. This report is the first of its kind to examine the full picture of the effects of the 2015 sulphur reduction targets," the U.K. Chamber of Shipping said.

The trade association points out that ships currently have three options in order to meet 2014 sulphur reduction targets: use low sulphur fuel, fit a sulphur ‘scrubber’ to their ships or use liquefied natural gas (LNG) as fuel.

The UK Chamber of shipping says that using low sulphur fuel would cost at least US$300 per tonne more than the current heavy fuel oil and fitting a scrubber 'is not yet sufficiently proven for ship owners to fit them with confidence before the 2015 targets'. The use of LNG as fuel was said to be feasible for newbuild ships, but not appropriate for most of the existing UK fleet.

Financial and employment implications

To cope with the major increase in cost of using low sulphur fuel, the new report claims that operators of sea routes around the UK not using LNG or investing in scrubber technology would need to increase ticket prices by up to 20 percent for passengers and up to 29 percent for freight.

Commenting on the issue, the UK Chamber of Shipping said: "This will threaten the viability of some routes, forcing them to reduce or even shut down altogether. In turn, this would threaten more than 2,000 jobs - related to those routes - in the UK and Europe in maritime engineering, navigation, catering, customer services, cleaning and administration.

"If vital trade routes are closed, the impact would be felt throughout the manufacturing sectors too as the cost of moving goods will increase - making the UK a less competitive and more expensive place to base internationally owned businesses.

Environmental implications

According to the report, increased ticket prices for sea passage in turn could lead to a significant shift in the way freight is transported, with a move to shorter sea passage and increased transport by road.

"Shipping is the lowest carbon form of mass transport, so a shift to greater road freight also has an environmental cost in terms of increased carbon emissions. Similarly, both the refining process needed to create low sulphur fuel and the power needed to run on board sulphur scrubbers have their own cost in terms of carbon emissions," the UK Chamber of Shipping said.

David Balston, Director of Safety and Environment at the UK Chamber of Shipping, remarked: “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."

To view the report, please click on the following link below:

Report: 'Impact on Jobs and the Economy of Meeting the Requirements of MARPOL Annex VI'.






Related Links:

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Interferry welcomes EEDI decision
EU adopts 2020 sulphur limit legislation
Eco-groups welcome EU sulphur vote
Sulphur regulation will prove costly, say experts
Shipping told to 'get ready' for fuel surcharge increases
ICS presses for early IMO study into LSFO availability

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