EU emission rules will add 30 per cent to sea freight costs, warn shipping firms

Will Green is news editor of Supply Management
18 June 2014

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18 June 2014 | Will Green

Shipping companies have warned that EU rules on CO2 emissions will add up to 30 per cent to freight costs unless they are given more time to introduce new technology.

In a letter to The Daily Telegraph, executives from 19 maritime organisations say EU rules on sulphur reduction come into force in January 2015 but switching to low-sulphur fuel will push up costs by almost a third.

The letter said: “When European shipping shifts to low-sulphur fuel, costs will rise by up to 30 per cent for passengers and freight. The only alternative is to reduce sulphur by use of technology that is only just ready, and which could take two years to fit to all our ships.”

The letter warns a rise in costs could lead to “the loss of 2,000 British jobs, thousands more lorries clogging our roads, 12 million tonnes of additional CO2 emitted each year and about £300 million a year in additional costs for shipping operators and customers.

“We urge the government to take action to prevent these damaging consequences by insisting that the EU allow pragmatic transitional arrangements, and support measures designed to lessen the economic impact on customers and operators,” said the letter.

Signatories to the letter include the president of the UK Chamber of Shipping and bosses from Maritime UK, Brittany Ferries, CMA CGM, Carnival UK and various ports.

In response, shipping minister Stephen Hammond said: “It is wrong to suggest we are not helping the maritime industry on this. We have been pushing Europe hard for a solution that minimises the economic impact on shipping while delivering health and environmental benefits. I have met with industry leaders and the secretary-general of the International Maritime Organization to discuss the way forward on this issue. We are also exploring the scope for securing EU finance for ship owners and ports to help further.”

Meanwhile, a plan by three shipping companies to share vessels to improve efficiency and cut CO2 emissions has been dropped after the Chinese Ministry of Commerce failed to give its approval following a review under merger rules. The P3 Network, announced in June last year, involved Maersk, MSC and CMA CGM in a long-term ship sharing agreement on east-west trade routes.

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