Cleaner fuel law to raise shipping costs

27 March 2008 22:02  [Source: ICIS news]

By Ivan Lerner

NEW YORK (ICIS news)--The cost of shipping freight will likely increase due to a proposed US bill that would require that ships burn low-sulphur fuels, a director for a trade group said on Thursday.

“One has to take into account that any change in legislation requiring lower emissions will come at a cost, and no alternative solutions is going to be cheap,” said Dragos Rauta, technical director for the International Association of Independent Tanker Owners (INTERTANKO).

Large ships generally use bunker fuel, which costs $460-490/tonne. Low-sulphur marine diesel fuel costs $790-860/tonne.

Hearings are being held regarding the US Marine Vessel Emission Reduction Act of 2007, proposed by Senator Barbara Boxer (Democrat, California).

If passed, the act would require all ships, foreign and domestic, that sail into US ports to switch to lower-sulphur fuel when travelling within 200 miles (322km) of the US coast.

Rauta has said that this change would not happen overnight, and would create “some serious changes [with] the current practices.”

However, it would create “a drastic reduction of various emissions from ships,” he said.

After the fuel switch, he estimates a decline of sulphur oxides by 80% and particulate matter by 90%. Nitrogen oxides should decline by 10-15%, and carbon dioxide by 4-5%.

[For more on the state of shipping and pollution, read the 3 September issue of ICIS Chemical Business.]

By: Ivan Lerner
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