AMEC environmental report highlights impact on UK economy of stricter maritime sulphur regulations

24/03/2013


London, United Kingdom (25 March 2013) - AMEC, the international engineering and project management company, has produced a report into the likely economic effect of the British maritime industry having to comply with strict new rules (MARPOL Annexe Vl regulations) further limiting sulphur emissions from ships' engine exhausts. 

The report, prepared by AMEC for the UK Chamber of Shipping, on behalf of several North Sea and Western Channel shipping operators, concludes that there will be a notable negative impact on the volume of shipping traffic and jobs in the sector, brought about by the increased costs to comply.

The International Maritime Organisation's MARPOL Annex VI regulations, intended to prevent air pollution from ships, set a 0.1% sulphur content limit for fuels in the SOx Emission Control Area (SECA), which will become effective from 1 January 2015.

The report identified three options open to operators to comply with the new regulations:
"¢ Option 1: fuel switching from 'Heavy Fuel Oil (HFO), to Low Sulphur Fuel (LSF).
"¢ Option 2: retrofit of a sulphur scrubbing system to ships.
"¢ Option 3: use of Liquefied Natural Gas (LNG) as an alternative fuel.

A major impact of adopting any of these options is an increase in costs for operators. In terms of fuel costs, analysis of the likely range of values for the increase in costs associated with switching from 1.0% to 0.1% sulphur content fuel is $275-350 per tonne, with an average of $315 per tonne.  It is assumed that the full cost of fuel price increases will be passed on directly as increased ticket prices.

The report further estimates that as many as 2,000 full time, part time and contract positions are likely to be at risk in the UK and on the continent, in maritime engineering, navigation, catering, customer service, cleaning and administrative occupations from those routes that are potentially unviable or would be threatened from the traffic reductions.

Report author Evan Williams, senior consultant with AMEC's Environment & Infrastructure business said: "Our customers trust our ability to give them unbiased assessments based on robust scientific and business analysis techniques. Our environmental expertise has played an important part in bringing out in the open the key economic impacts of the intended sulphur emissions cuts."

The report can be read at: http://www.ukchamberofshipping.com/

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