Samskip COO says sulphur regulations will take traffic from ship to road

Samskip COO says sulphur regulations will take traffic from ship to road
Samskip predict regulations will increase fuel costs

The chief operating officer of logistics company Samskip, Diederick Blom, has said that new sulphur regulations will increase its fuel costs by 50%.

He said that certain operators had already closed shortsea services, anticipating a shift to road transport when the regulations come into force in January.

Blom said: “The European white paper on transportation says that one third of road traffic that travels more than 300km will have to be off the road by 2030 and, in total, 50% will need to be off the roads by 2050. So the European Commission will have to make road transport less efficient than it is today in an attempt to support transportation by sea and by rail.”

The regulations affect the North Sea, Baltic Sea and English Channel as well as both coasts of North America.

Sulphur emissions will be limited to 0.1%, as opposed to the 1% that is permitted in these areas now.

Samskip predicts a US$10m fuel cost rise as a result of having to switch to more costly marine gas oil, assuming that marine gas oil stays the same price; it may rise as a result of increased demand caused by the regulations.

The company intend to introduce a surcharge on affected services, the amount of which has not yet been announced. Blom said that it will not be a blanket charge and will be broken down to individual routes.

Shipping companies Maersk Line, Meditterranean Shipping Co, CMA CGM and Unifeeder have all announced surcharges.

According to Blom, Samskip do not intend to use scrubbers or gas technology as it does not consider the technology mature or cost-efficient.

The company is also wary of using open-loop scrubber systems, which put the water used to clean the sulphur from emissions back into the sea, as it believes these may be regulated in future.

Blom denied claims that the penalties for not meeting the target were not low enough to act as a deterrent, saying that the market was “responsible” and that polluters risk not just fines but further sanctions, including from banks as well as regulators.

Sulphur dioxide is a gas that, when breathed in, irritates the nose and throat and causes shortness of breath. It can react with other substances to form sulphuric acid and sulphate particles.