Tighter emission standards for ships could cost Finland in excess of EUR 800 million

Price-tag only became clear to politicians last week

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The additional costs relating to tighter regulations on ship emissions on the Baltic Sea and the North Sea have come as a surprise to the representatives of Finnish industry, shipping companies, and the government alike.
      The project has been prepared by Finnish civil servants for four years, but it has never been presented to politicians and neither have any policy lines been drawn in this respect.
      From the beginning of March 2010 onwards, the sulphur concentration of fuel used by ships will be limited to a maximum of 1.0%, and from the beginning of 2015 the limit will be lowered to 0.1%. The current limit is 1.5%
     
The first restriction would raise the price of fuel by some 10 per cent, while the next step would be a good deal more expensive, up by some 60 to 70 per cent.
      The Finnish Shipowners’ Association calculates that with current prices the additional costs could be EUR 840 million annually, as ships would have to use appreciably more costly fuel than before.
      Theoretically, all Finns would have to participate in the environmental improvement of Finnish navigation by some EUR 160 per year.
     
According to the Confederation of Finnish Industries (EK), the planned lower sulphur limits would increase the logistics costs of industry, commerce, and construction by three to four per cent in one fell swoop.
      The Finnish forest industry in particular would suffer losses, at its share of sea transports is almost one-third.
     
In addition to sulphur , the limits for nitrogen oxide are also being tightened, while emissions trading is expanding to the seas as well. These restrictions are not included in the figures given by the shipowners.
      Vice President Olof Widén from the Finnish Shipowners’ Association admits that their calculations are imperfect. They are based on a parallel product, as the 0.1% bunker fuel does not exist yet. Moreover, even the capacity required to make such low-sulphur fuel is insufficient.
      If a product is in short supply, it will certainly affect the price.
     
While agreeing that the new regulations on ship emissions are necessary, Widén says that the one-time reduction is too large, whereas a 0.5% level would be a better solution.
     
The Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) is expected to adopt the proposed amendments to the regulations when it meets at IMO Headquarters in London this week.
     
”It is true that we all have been asleep at the helm”, commented Director-General Juhani Tervala from the Ministry of Transport and Communications.
      For example Prime Minister Matti Vanhanen (Centre) and Minister of Transport Anu Vehviläinen (Centre) as well as Minister of the Environment Paula Lehtomäki (Centre) were all informed of the potential costs of the restrictions only last week.
      Tervala promised that the Ministry will make new calculations on the effects of the new regulations to reduce harmful emissions from ships.
      However, Finland does not intend to oppose the proposed amendments and endanger the international consensus, reports Lehtomäki.
      The Baltic Sea and the North Sea belong to the so-called Sulphur Emission Control Area (SECA), in which sulphur emission restrictions will be stricter than in other waters.


Previously in HS International Edition:
  Baltic Sea panel calls for tighter emission restrictions (19.5.2008)
  Baltic Sea needs urgent attention (14.4.2008)

Links:
  Finnish Shipowners´ Association
  International Maritime Organisation (IMO)
  Ministry of Transport & Communications

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