In several countries bordering the North Sea and the Baltic Sea, concentrations of sulphur dioxide (SO₂) have come down by 50 per cent or more in 2015 compared to previous years, according to a recent study by the Dutch research consultancy CE Delft conducted on behalf of the German environmental group NABU (Nature and Biodiversity Conservation Union).
The study has investigated the experiences of the first year of applying stricter marine fuel sulphur standards in the Sulphur Emission Control Area (SECA) covering the North Sea and the Baltic Sea. It focussed on air quality, socio-economic effects, impacts on business, and on compliance and enforcement.
As from 1 January 2015 the maximum sulphur content of marine fuels used in SECAs was reduced by 90 per cent, from 1.0 to 0.1 per cent. The resulting health benefits of better air quality were estimated to amount to between €4.4 and 8 billion. This can be compared to the cost to the maritime sector of moving to low-sulphur marine gas oil (MGO) in the North Sea and the Baltic Sea, which was estimated at €2.3 billion.
The researchers conclude that the health benefits of lower emissions of SO₂ and particulate matter (PM) were between 1.9 and 3.5 times higher than the increase in fuel costs, which means that the benefits of introducing the new regulations clearly outweighed the cost.
Before its implementation, there were industry concerns that the stricter fuel standard would significantly increase fuel costs and that there would be problems with the availability of low sulphur fuels. There were also concerns about impacts on the industry, such as closures of companies or services, and potential shifts towards road transport. The lack of effective surveillance schemes to ensure compliance and enforcement were also subject to debate.
The study found that the availability of MGO has proven to be sufficient and that the price of MGO actually decreased – the latter mainly as the result of reduced oil prices in general. However, the MGO price decreased more sharply than the price of heavy fuel oil (HFO) and automotive diesel. In fact, by the end of 2015, the price of 0.1 per cent sulphur MGO was at the same level as the price of high-sulphur HFO was at in the beginning of 2015.
No significant shifts towards road transport were found for RoRo transport, which is regarded as the market segment that is most sensitive to a modal shift. Moreover, no company or service closures, nor any decrease in cargo turnover in Northern European ports, was found that could be clearly linked to the introduction of the stricter sulphur standard. Interestingly, some shipping companies reported a financial record year for the year 2015 and established new services.
According to data for 2015 from the European Maritime Safety Agency (EMSA), between three and nine per cent of the ships were non-compliant in the Baltic Sea and North Sea, respectively. It should be noted that countries typically use a margin of up to 20 per cent above the legal threshold during control in ports for reporting deficiencies and 50 per cent for applying sanctions.
It is believed that the rate of non-compliance on the open seas might be significantly higher, but the limited data available does not allow any firm conclusions. More and better data are needed in order to estimate the actual compliance rate on the open seas. In addition, fuel sampling needs to be intensified in 2016 in order to meet the required 30–40 fuel samples per 100 administrative inspections, as required by EU legislation.
It is recommended that there should be further development of monitoring and control techniques, including control on the open seas, to improve the effectiveness of the inspection regime. The authors also recommend that countries apply sanctions that are proportionate to the economic benefits of non-compliance.
Christer Ågren
Sources: CE Delft press release and Ends Europe Daily, 20 April 2016
The study: “SECA Assessment: Impacts of 2015 SECA marine fuel sulphur limits” (April 2016). By CE Delft, the Netherlands. Downloadable at: http://www.cedelft.eu/publicatie/seca_assessment%3A_impacts_of_2015_seca...
