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Freight by Water Conference Teesside 7 September 2012 Sulphur Directive Impacts.

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Presentation on theme: "Freight by Water Conference Teesside 7 September 2012 Sulphur Directive Impacts."— Presentation transcript:

1 Freight by Water Conference Teesside 7 September 2012 Sulphur Directive Impacts

2 The Solutions Fitting scrubbers –estimate €4m per ship Using MGO at –+€200 per tonne Switching to LNG in the longer term –Not widely available currently

3 Operator View Scrubber is the best short term solution - technology permitting LNG coming (long term) Both may be part of the solution, but not the entire answer in 2015. More time needed for technical development (Reliability)

4 Operator View – use scrubbers The technology works, but… Not yet ready for use on 60% of ships –Rules for using scrubbers (washing of materials into the sea) not yet in place (needed for investment decisions) –Practicalities for waste disposal from scrubbers not yet in place Loss of energy efficiency = greater emissions of CO2 (1.5%) Expensive investment solution = higher operating costs –Possible 10% cost increase to customers where it is available

5 Mitigating Solutions Derogation/exception/transitional period for the 2015 requirement? Grants New/upgraded technology - scrubbers Increased infrastructure availability – LNG Increased compliant fuel availability – MGO

6 Wider Context Everybody faces the environmental challenge… …and the regulatory challenge

7 UK Targets UK climate change reduction targets against 1990: –34 per cent by 2020 –60 per cent by 2030 –80 per cent by 2050 Influences public policy decisions

8 Corporate Emissions Reporting –Increasing requirement for companies to report their carbon footprint From April 2013 all quoted companies will have to report on GHG emissions in the Directors’ Report section of their Annual Report Transport operators have to report GHG emissions Users “encouraged” to report third party emissions – guidance provided on freight –Review in 2016 – possible expansion of requirement

9 Rail Non-Road Mobile Machinery Directive –Regulates carbon oxide (CO), hydrocarbons (HC), nitrogen oxides (NOx) and particulate matter pollution from rail engines (and inland waterway vessels) –Affects new and refitted engines –Applied at the start of 2012 –Flexibility for UK to end of 2014 –Rolling effect as new engines have to be purchased Track Access Charges

10 Road Euro standards –Progressively tighter emissions standards for engines since 1992 –Euro 6 emission standards for newly-manufactured trucks applies from start of 2014 particle emissions halved and oxides of nitrogen emission reduced by 77 per cent Expected to increase fuel consumption Road Fuel Taxation Road Charging Fuel Prices –Demand imbalance for diesel Increase in driver costs –Levelling of living standards with east European states –Shortage of drivers

11 END

12 Sulphur Directive Limit sulphur content of marine fuels to 0.10% from 2015 within defined areas Based on MARPOL Annex VI amended in October 2008 Effectively ban heavy fuel oil unless emission abatement methods employed SECA at 0.1% sulphur defined as Channel, North Sea and Baltic

13 The Sulphur emission control area

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