The European Commission (EC) has adopted proposals to cut shipping fuel sulphur content on short sea routes in northern European waters to 0.1% from 1.5% from 2015. The proposal also aims to cut fine particle emissions from ships by up to 80%, according to the EC.
The proposal incorporates global standards agreed in 2008 under Annex VI of the International Maritime Organisation’s (IMOs) MARPOL regulations.
The EC predicted that the benefits for public health would be between €15 billion ($21.2billion) and €34 billion, which it claimed would far exceed the expected costs, estimated to be anywhere between €2.6 billion and €11 billion.
“Projections made in 2005 showed that without further regulatory action the continued growth in emissions of SO2 and NOx from the maritime sector will surpass total emissions of these pollutants from all land-based sources by 2020,” said the EC in an official statement.
There have been mixed reactions from ro-ro providers operating in the region. Some short-sea providers, including TT Line and Stena RoRo, have described the regulations in terms that range between “counterproductive” and “catastrophic”, as well as stating that they discriminate against any ro-ro business in the North and Baltic seas from 2015 onward. According to Agustín Fernández, chief operating officer at United European Car Carriers, it will mean a price increase of almost 50% per ton of fuel used.
He told Automotive Logistics: “Currently, a medium size car carrier/ro-ro vessel with an average size of the type that we operate in North and Baltic seas is burning between 35 and 40 tons daily of light sulphur 1.0% 380-CST fuel. Today's average price per ton of this type of fuel is €470 per ton, whilst marine gas oil 0.1 % sulphur is €699 per ton, resulting in a 48.73% higher price.”
As well as threatening a big increase in vessel operating costs and a lowering of competitiveness against other modes, the rules are regarded as running counter to the notion of an international shipping sector adhering to the same rules. This is because the sulphur cap for shipping outside the sulphur emission control areas will be kept at 3.5% until 2020 (when they will be reduced to 0.5%).
While UECC’s Fernández does not see the new rules discriminating against ro-ro in the context of other types of shipping he does see it has having a considerable impact versus transport modes including road and rail. It is also threatening to seriously affect the competitiveness of European products owing to the resulting higher transport costs.
However, while acknowledging the additional costs related to the legislation, other vessel operators are supportive of the measures.
“We don’t perceive this rule as discrimination but as a necessary step to reduce the carbon footprint in general and in our industry specifically,” K-Line’s director and general manager of the Car Carrier Group, Peter Menzel, told Automotive Logistics.
“Since we are committed to support the MARPOL regulations, studies are under way to determine how existing tonnage can be adjusted to the use of the low sulphur fuels,” he said. “Whilst this is a bigger challenge than legislators will ever understand, I think, we have come up with ways to comply with the new requirements.”
According to Menzel, K-Line has already introduced several measures and initiated studies to reduce sulphur emissions and fuel consumption, something UECC is also pursuing in cooperation with its main customers.
Both UECC and K-Line investigating exhaust cleaner systems, more efficient paint, more effective combustion mixes and new propulsion systems.
“Whilst all these systems are subject to considerable investments, there is unfortunately no legislative recognition,” added Menzel. “The MARPOL regulations are presently mainly focussed on what goes into the engine and not what is coming out of the funnel, or exhaust gas cleaning systems would already be in much wider use. That leaves us with the issues of the types of fuel used.” 
As for the increased operational costs Menzel said this needs to be considered in the context of the whole logistics supply chain. “Close communication with the OEMs will be the key to find a commercially sustainable solution,” he said.
UECC’s Fernández added that the additional operating costs will have to be integrated into final freight rates. “We are already trying to keep [these] to a minimum by means of more efficient trading patterns and optimised schedules,” he said.