Since 1 January 2015 the maximum sulphur content of marine fuels used in Sulphur Emission Control Areas (SECAs) has been reduced from 1.0% to 0.1%. Prior to implementation, the reduction of the SECA fuel sulphur content led to discussions about the availability of marine gasoil (MGO), economic impacts and the need for effective compliance and enforcement.
The objective of this study, commissioned by the German NGO NABU, is to present an ex-post assessment of initial experiences under the 0.1% fuel sulphur regime, focussing on the aforementioned aspects.
Air quality and socio-economic benefits
Available studies show a noticeable improvement in air quality in port areas and along coastlines in 2015 compared with the previous year. Sulphur concentration reductions of 50% and over have been reported. Estimated health benefits resulting from these air quality improvements range from 4.4 to 8.0 billion euro. The additional fuel costs for the maritime sector of using 0.1% MGO in the North Sea and Baltic Sea have been quantified at 2.3 billion euro. The health benefits due to lower emissions of SO2 and PM are thus 1.9 to 3.5 times higher than the rise in fuel costs, showing that the benefits of introducing the new regulations have far outweighed the costs of that policy.
Fuel availability, economic impacts and modal shift
The availability of MGO has proven to be sufficient. While it was estimated that a fuel shortage would result in an increase in MGO price, the opposite occurred, mainly as a result of reduced oil prices. No significant shifts towards road transport have thus far been found for RoRo transport, which is deemed to be the most sensitive market segment for modal shifting. Neither have there have been any company or even service shutdowns, nor any decrease in cargo turnover in Northern European ports, that can be clearly linked to the introduction of the 0.1% sulphur cap.
It should be noted, however, that with increasing oil prices the situation might worsen, as RoRo transport is more sensitive to fuel price increases than truck transport.
Compliance, enforcement and surveillance
The first year of the 0.1% sulphur SECA regulation has shown that in ports, where controls are performed, a large majority of ships use fuel that is compliant or within the accuracy margin used by European inspectorates. According to EMSA data, between 3 and 9% of the ships are non-compliant in the Baltic Sea and North Sea ports, respectively. Figures on compliance on open seas are rather scarce, while experts have pointed to the risk of non-compliance in such areas, given the major economic incentives.
It is recommended to further develop monitoring and surveillance techniques, including (remote) control on open seas, to increase the intelligence of the monitoring system. This will contribute to the effectiveness of the inspection regime.