Sustainable Shipping reported on Monday that P&O Ferries has announced that compliance with Emission Control Area (ECA) legislation will increase its fuel bills by ~US$48 million annually from 1 January 2015, but remains tight lipped on how this will impact fares. Surcharges in relation to ECA regulations have been seen to vary from company to company. It has been reported that MSC have announced one of up to US$165 per TEU, whilst Maersk says it expects surcharges of US$50-150 per FEU on certain routes. The question is, of course, what impact this will have on freight and passenger transport. The CEO of Dutch container operator Samskip, Diederick Blom, has predicted that “in the short term, the new regulations would likely drive companies to shift back to road transportation on certain European shortsea routes. In the long term, however, he expects transport by sea and rail to increase far more than road” It is these primarily ECA based operators who will see the biggest impact and who have the most compelling reason to respond proactively. If all of an operator’s fuel consumption takes place within an ECA, the case for making a capital investment in technology to abate emissions is strong. Such operators have an opportunity to invest in technologies like sea water scrubbing, which will allow them to return to consuming the cheaper residual fuels they currently use, and place themselves in a strong position to compete with those opting to comply with the use of more expensive fuels. Perhaps this is what Mr Blom means when he predicts rises in sea and rail transport in the longer term, the cost of compliance will drive investment?-
