Transport Pro

On the 1st of January 2015, the EU Sulphur Directive 2012/33/ EU will bring about a major reduction in sulphur dioxide emission from ships, and that will heavily impact shipping in northern Europe. The Directive will require ships sailing in the English Channel, the North Sea and the Baltic Sea (the North European emission control area) to use bunker oil with a maximum 0.1% sulphur or apply alternative methods in order to achieve the same effect.The fuel with 0.1% sulphur content is the marine gas oil (MGO), which is significantly more expensive than heavy fuel oil (HFO) with 1% sulphur, which is currently allowed and commonly used inside the North European ECA. As a result, fuel prices will increase and so will the costs of shipping. It has been estimated that ships trading within this area consume around 13,000,000 tons of HFO per year. Switching this to 0.1% MGO would mean an extra cost of about EUR 3 billion per year. It is entirely up to the shipping industry to cover this extra cost.

The new rules will come into effect in 2015 and there will be no exemptions. There are basically three ways to comply with the new legislation:

1. Switch to the MGO fuel

2. Change to liquefied natural gas (LNG).

3. Invest in scrubbers that remove sulphur from the exhaust gases from ships.

All three options will lead to significant cost increases for shipping companies. Legislation for their use is still not fully in place and there is a significant lead time for such major conversions to existing vessels.

Scanlin Oy Ltd will inform all our customers immediately when shipping companies will publish their increased costs.