EU bodies agree on new Directive limiting sulphur content in marine fuels

The EU Directive on sulphur contend in marine fuels will be amended. The pulp and paper industry, especially in the Nordic countries, feels disadvantaged and says additional fuel costs will limit its competitiveness on the global market.

The European Council, Parliament and Commission have reached a provisional agreement on changes to the Directive limiting the sulphur content of marine fuels. As the European Council announced on 23 May, the EU bodies have agreed that emissions caused by high sulphur content in marine fuels should be reduced considerably to protect the environment. To this end, amendments to Directive 1999/32/EC are planned.

The amendments would reduce the maximum sulphur content in marine fuels in SO2 Emission Control Areas (SECAs) to 1% by 31 December 2014 and to 0.1% from 1 January 2015. The SECA region includes the North Sea, the Baltic Sea and the English Channel. In other EU waters, the International Maritime Organisation’s (IMO) upper limit of 0.5% would apply from 2020. Until then, these waters would continue to be subject to a limit of 3.5% sulphur content.

CEPI, the European Confederation of Paper Industries, criticised that the new Directive will only initially be implemented in the SECA area in Northern Europe, which will particularly limit the competitiveness of states bordering on the North and Baltic Seas. For the paper industry, CEPI expects an estimated increase in shipping costs of 20-45% and even more if low sulphur fuel becomes scarce. "Sulphur emissions have to be reduced indeed but in a cost-efficient and fair way. This requires more time and better coordination”, the organisation said. This will be "a major blow to the competitiveness” of the European paper industry.

Similar views were expressed by the Swedish industry association Skogsindustrierna and the Finnish Forest Industries Federation (FFIF). Skogsindustrierna said that entire Swedish forestry industry was anticipating additional costs of SEK1.3bn and this would severely limit the competitiveness of Swedish companies competing in a global market. Swedish forestry companies mainly compete with countries beyond the Baltic Sea region, which are thus not affected by this decision, the association pointed out.

FIFF expects the legislation will lead to €200m in additional costs for the Finnish forestry industry and is calling for compensation from the EU. "Subsidies for the development and implementation of sulphur-emission-reducing technologies as well as for promoting the adoption of liquefied natural gas in maritime transports will also be needed,” said Timo Jaatinen, Director General of FFIF.

The UK industry association CPI declared that the new Directive was distorting competition at a time when the EU as a whole should be concentrating on measures that lead to more growth and jobs.

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