EUROPEAN COMMISSION 
Brussels, 15.7.2011 
SEC(2011) 918 final 
  
COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT 
Accompanying the document 
Proposal for a Directive of the Euro pean Parliament and of the Council 
amending Directive 1999/32/EC as regards the sulphur content of marine fuels 
{COM(2011) 439 final} 
{SEC(2011) 919 final}  
 
EN  EN Abbreviations  
 
CEN European Committee for Standardisation 
ECA Emission Control Area 
EMSA European Maritime Safety Agency 
ETS Emissions Trading Scheme 
EU European Union 
GHG greenhouse gas 
HFO heavy fuel oil 
IMO International Maritime Organisation 
ISO International Organisation for Standardisation 
LNG liquefied natural gas 
LoLo lift on, lift off freight ship 
MARPOL International Convention for th e Prevention of Pollution from Ships 
MEPC Marine Environment Programme Committee (IMO) 
MFO marine fuel oil 
MGO marine gas oil 
NECA NOx Emission Control Area 
NOx nitrogen oxides 
PM particulate matter 
PrEN Preliminary European Standard 
RoPax roll on, roll off passenger ship 
SECA Sulphur Emission Control Area 
SO2 sulphur dioxide 
SSS short sea shipping 
UNCLOS United Nations Convention on the Law of the Sea 
 
 
EN  2  EN  
Table of Contents 
1. Introduction................................................................................................................ ...........................4 
2. Procedural issues and consul tation of interested parties ...................................................................4  
2.1. Organisation, timing, and cons ultation of interested parties .............................................................. .....4 
2.1.1. Impact Assess ment Steering Group ........................................................................................ ................4 
2.1.2. External expertise and public information ............................................................................... ...............4 
2.1.3. Public consulta tion..................................................................................................... .............................4 
2.2. Impact Assessment Board ................................................................................................... ....................5 
3. Problem Characteri zation and Baseline....................................................................................... .......5  
3.1. Air quality and pollutant em issions from mar itime sh ipping ................................................................ ..5 
3.2. Progress at the IMO – the 2008  amendment of MARPOL Annex VI.....................................................7 
3.3. Differences between the EU and IMO provisions regulating sh ipping emissions ..................................8 
3.3.1. Differences related to the maximu m sulphur content of  marine fuels.....................................................8  
3.3.2. Differences related to the us e of "equivalent ab atement methods" ........................................................ .9 
3.3.3. Environmental stan dards for passenger ships............................................................................. ...........10 
3.4. Other issues arising from the review of the implementation of the Directive.......................................10 
3.4.1. Member State reporting.................................................................................................. .......................10 
3.4.2. Sampling frequency and methods .......................................................................................... ...............11 
3.4.3. Adapting the Directive to recen t technical progress  and standards....................................................... 11 
3.4.4. Lega l clar ity ........................................................................................................... ...............................11 
3.5. Additional Emission Control Ar eas and complementary measures ......................................................11 
3.6. The baseline .............................................................................................................. ............................12 
3.6.1. The po licy base line ..................................................................................................... ..........................12 
3.6.2. The post-2008 environmen tal and socio-ec onomic baseline................................................................. 12 
3.6.3. Competiveness issues and issu es related to possi ble modal shifts ........................................................ 14 
4. Objectives.................................................................................................................. ...........................16  
4.1. General objectives........................................................................................................ .........................16 
4.2. Specific objectives ....................................................................................................... .........................16 
4.3. Consistency with the ot her European Un ion polic ies........................................................................ ....17 
4.4. Treaty base and the subsidiarity principle................................................................................ .............17 
5. Policy options and their assessment......................................................................................... ..........18  
5.1. Method and criteria  for assessing impacts................................................................................. ............18 
5.2. Options for aligning EU law with the la test international mar itime fuel rules......................................18 
5.2.1. Options for aligning the maximu m sulphur content of  marine fuels.....................................................18 
5.2.2. Options for aligning the provisions allowing the use of "e quivalent methods".....................................20 
5.2.3. Options for adapting the Di rective to techni cal standards............................................................... ......22 
5.2.4. Fuel verifi cation procedure ............................................................................................. ......................22 
5.3. Options for additional and alternative measures to improve the environmental performance of the 
shipping sector ................................................................................................................ ......................23 
5.3.1. Additional Emissions Control Areas and emission  limit values ...........................................................2 3 
5.3.2. Options for reducing emissions from  passenger ships on regular service.............................................23 
5.3.3. Emission Trading Options................................................................................................ .....................25 
5.4. Options for strengthening the monitoring and enforcement provisions to enhance the implementation 
of the Di rective............................................................................................................... .......................25 
5.4.1. Options for strengthening the provisio ns on sampling and analysis of fuels ........................................25 
5.4.2. Options for improving legal clarity a nd certainty ....................................................................... ..........26 
5.5. Supplementary measures to addr ess impacts on shor t sea ship ping......................................................27 
6. Summary of the impacts associat ed with the pref erred options .....................................................28  
6.1. Summary of baseline, retained options , benefits and costs (€ billion,  2020) ........................................28 
6.2. Environmen tal Imp acts ..................................................................................................... ....................29 
6.3. Economic Impacts.......................................................................................................... .......................29 
6.4. Social Impacts ............................................................................................................ ...........................30 
6.5. Administrative burden..................................................................................................... ......................30 
7. Monitoring and Evaluation ................................................................................................... .............31  
7.1. Indicators of progress to wards meeting th e objec tives..................................................................... .....31 
7.2. Outline for monitoring  and evaluation planning ............................................................................ .......31 
8. Conclusion and P referred Policy Mix ......................................................................................... ......31  
 
 
EN  3  EN Annex I  External Studies Conducted In Support Of This Impact Assessment ............................................34 
Annex II Internet Questionaire................................................................................................. .....................36 
Annex III  Trends In Emissions From Inte rnational Shipping An d Related Impacts ......................................39 
Annex IV  Issues Arising From The Review Of The Directive ...................................................................... .48 
Annex V  Criteria For Ne w Emission Co ntrol Areas ............................................................................... ......60 
Annex VI  Benefits And Costs Related To The New Rules On Sulphur Content Of Marine Fuels Adopted By 
Imo Parties In 2008 ............................................................................................................ ............62 
Annex VII Trends In Activity, Fuel Qu ality And Prices, And Modal Split .....................................................72 
Annex VIII Current and potential future support Measures That Could Be USED for The Implementation of 
Marpol An nex VI. ............................................................................................................... ...........77 
Annex IX        Administrative Burdens......................................................................................... .........................82 
 
 
 
EN  4  EN 1. INTRODUCTION  
This impact assessment brings together the results of two pr incipal and closely 
related work streams, i.e. an in-depth assessment of the amended international rules governing emissions from maritime shi pping as adopted by the International 
Maritime Organisation (IMO) in October 2008 (a.k.a. the MARPOL Annex VI), and 
the review of the Directive 1999/32/EC (The Directive) as called for in article 7 of 
the amending Directive 2005/33/EC. It accompanies a legislative proposal to further amend the Directive, for the purpose of a ligning it with the latest rules adopted by 
the IMO, notably those on the maximum pe rmitted sulphur content of marine fuels.
1 
The impact assessment has also suppor ted the identification on non-regulatory 
measures meant to support relevant stakeh olders in the timely adoption of the new 
IMO standards. Importantly, th is impact assessment is not meant to justify the latest 
international rules but rath er to assess, amongst other issues, whether and how the 
latest internationa l rules should be incorporated into EU law .  
2. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
2.1. Organisation, timing, and consul tation of interested parties 
2.1.1.  Impact Assessment Steering Group 
This impact assessment report was develope d by DG ENV in clos e co-operation with 
relevant Commission services. The following services were invited to the Inter-service Steering Group meetings: CLIM A, COMP, ENER, ENTR, MARE, MOVE, 
RTD, SANCO, SG, SJ, TAXUD, JRC, DEV and EEAS (formerly RELEX). In 
addition, EMSA representatives attended the meetings and contributed to the 
assessment.  
2.1.2.  External expertise and public information 
Several studies were conducted in the run-up  to this impact assessment report. These 
are listed in Annex 1.A
 and were made available at the Commission's webpage.2   
2.1.3.  Public consultation 
The Commission met stakeholders regu larly and also undertook an online 
consultation open to all interested partie s (including business organisations, Member 
States, NGOs and the general public) from 29 October 2010 to 5 January 2011. Stakeholders were invited to respond to a series of questions about the possible 
incorporation of the latest relevant IMO rules into EU legisl ation. The consultation 
was advertised through Commission news alerts and participation was further 
promoted at stakeholder meetings.  
                                                
 
1 The International Maritime Organization (IMO) is a specialized agency of the United Nations with 169 
Parties (including all EU Member States) and 3 Associate Members. The Convention establishing the 
IMO was adopted in Geneva in 1948 and the IMO first met in 1959. The IMO's main task has been to 
develop and maintain a comprehensive regulatory framework for shipping and its remit today includes safety, environmental concerns, legal matters, technical co-operation, maritime security and the 
efficiency of shipping. 
2 http://ec.europa.eu/environment/air/transport/ships.htm. 
 
EN  5  EN The public consultation yielded 244 respon ses from various organisations. In 
general, stakeholders hail ed the 2008 amendments to IMO MARPOL Annex VI as a 
major step forward in addressing air pollu tion from maritime shipping and necessary 
to improve air quality in the EU. There wa s also broad support for further aligning 
EU law with those (new) rules for the purpose of complementing and strengthening 
the international monitoring and enfor cement regime. A number of industry 
organisations, however, claimed that the implementation costs associated with the new IMO regulations, notably the rules applyi ng in the so called Sulphur Emission 
Control Areas (SECAs) would adversely a ffect their competitive position. Those 
respondents further claimed that the time available to comply with the new IMO fuel quality-equivalent standards (irr espective of their inclusion in EU law) was too short. 
The same respondents suggested important mo dal shifts (from short sea shipping to 
trucks) could occur whilst referring to a ssociated greenhouse gas impacts. Other 
respondents downplayed this concern and poi nted at the shipping sector's slow 
response to the 2008 agreement, hence calling for prompt EU action to safeguard the 
environmental and health benefits associat ed with the new IMO rules. A summary of 
the responses is av ailable in Annex II
. Comments are accounted for in relevant 
sections of the report. 
2.2. Impact Assessment Board 
On 25 February 2011 the Impact Assessment Board issued a positive opinion on the 
draft impact assessment subject to a nu mber of recommendations. These were 
incorporated in the present report and compri se, inter alia, a clear prioritizing of the 
present problems related to the implementa tion and enforcement of the Directive; a 
clear identification of th e areas for which proposals would go beyond the IMO 
requirements, and an overview of costs and benefits of the retain ed policy package.  
3. PROBLEM CHARACTERIZATION AND BASELINE  
3.1. Air quality and pollutant emissi ons from maritime shipping 
Clean air matters to all EU citizens3. Air pollution seriously impacts people's health 
and the environment. Hence, the objectiv es to reduce air pollu tion have been an 
important element of the EU's enviro nment policy over the past decades.  
 Significant progress has been made in reducing air pollution, notably from land-
based sources, albeit sustained health and environmental damage will continue to occur for the foreseeable future. Whilst the EU is well on track to resolve the problem of ecosystems damage due to aci d deposition of air pollution, ecosystem 
biodiversity remains under serious thr eat due to excess nutrient deposition 
(eutrophication). Likewise, there remain wi despread problems with high levels of 
ground-level ozone damaging both vegetatio n and human health. In summary, 
several of our air quality standards such as those for ground-level ozone (O
3), 
particulate matter (PM) a nd nitrogen dioxide (NO 2) are widely exceeded in the EU, 
especially in urban areas4.   
                                                 
3  http://ec.europa.eu/environment/archives/barometer/pdf/summary2008_environment_en.pdf 
4  Data from EEA website suggest that for 2005 35 % of EU's urban population lived in cities where the 
EU PM10 standard is exceeded and 25% where the EU NO2 standard (for 2010) is exceeded.  
 
EN  6  EN The setting of environmental standards for international shipping has so far lagged 
behind those of land-based resources given the latter's closer proximity to populated 
areas. The growth of the international shi pping sector and impr oved insights in the 
contribution of their emissions to inland ai r pollution levels dire cted attention to 
maritime emissions as a major source of air pollution. Emissions of SO 2 and PM are 
primarily linked to the type (quality) of  fuel being used: liquid fuels used for 
maritime transport (like for other modes of motorised transport, industrial, 
commercial combustion, and domestic heating)  contain sulphur which is released 
upon combustion in gaseous form, predominantly as SO 2. Following its release into 
the atmosphere, SO 2 reacts with other pollutants and forms PM which is referred to 
as secondary  PM (SO2 is a precursor  of PM). Other pollutant emissions arising from 
the combustion of liquid fuels include primary  PM and NOx.5  More recently, 
attention has also turned to emissions of  "black carbon" from shipping due to its 
radiative forcing properties which significantly contribut e to the arctic climate 
impacts.   
Air pollution from international shipping (sailing also outside 12 miles zones or 
territorial waters) is regulated by MARP OL Annex VI and by the Directive.   
MARPOL Annex VI  covers issues such as sulphu r oxides (SOx) and nitrogen oxides 
(NOx) and recognizes the need for additiona l protection in sea areas particularly 
sensitive or relevant to pollution, the so called Emission Control Areas (ECAs).6  
Considering that northern Europe is partic ularly affected by acidification, and that 
SO 2 emissions from shipping are a major contributor to the problem, the IMO 
defined three sea areas as SECAs following proposals from Member States, i.e. the 
Baltic and North Sea and the English Channel.7   
The Directive has been the main instrument for transposing IMO MARPOL 
agreements into EU law. The incorporati on of IMO standards into EU law aimed, 
inter alia, at reinforcing the (weak) intern ational monitoring and enforcement regime. 
The latest significant revision of the Directive was reflected in Directive 
2005/33/EC, which introduced, inter alia , the IMO concept of SECAs and the 
associated stricter fuel standards, i.e. capping the maximum sulphur content of fuels 
allowed in those areas at 1.5% from 2006 and 2007 onwards.8  In addition, and in 
recognition of the need to further improve  air quality for the protection of human 
health beyond the SECAs, some requireme nts that went beyond the IMO rules were 
introduced of which the most important are: 
• The obligation for ships at be rth or anchorage in EU por ts to use fuels containing 
max. 0.1% sulphur; 
• The obligation for passenger ships on regular service to EU ports to use fuels 
containing a maximum su lphur content of 1.5%; 
• The introduction of a possibility to test and use the emission abatement 
technologies.  
                                                 
5  In the case of ship engines, the levels of seco ndary PM typically exceed the levels of primary PM. 
6  To have a sea area designated as an ECA, the IMO Member States bordering that sea area have to send 
an application to the IMO. If th e proposal meets the criteria set out  in Annex VI, the IMO can accept 
the application and adopt the nece ssary amendment that enters in to effect 16 months later. 
7  Outside Europe, the 200 nautical miles zone around US and Canada has been designated recently as 
both SOx and NOx ECA. 
8  Directive 2005/33/EC of 6 July 2005; OJ L 191, 22.7.2005, p. 59. The SECA provisions for the Baltic 
Sea applied from 11.8.2006 onwards whilst those for the North Sea and English Channel applied from 
11.8.2007 onwards.  
 
EN  7  EN The conclusion of the 2005 amendment coinci ded with the finalization of the EU 
Thematic Strategy on Air Pollution which focused particularly on the acidification, eutrophication, and health-related impacts caused by fine particles (PM, of which 
SO
2 is a precursor) and ground-level ozone (f ormed by the inter action of NOx and 
volatile organic compounds or VOCs).9,10 It concluded, inter alia, that unless further 
action was taken at the international level emissions from maritime shipping (notably 
related to SO 2 and NOx) would exceed the sum of all emissions from land-based 
sources in the EU by 2020 despite the fact  that the maritime transport sector accounts 
for less than 5% of the EU GDP (see Table 1 ).11,12, 13  
Table 1: Projected emissions from land-based and maritime sources for 2020 
SO2 NOx  
2000  2020  2000  2020  
Land-based sources (kt) 8,735 2,805 11,581 5,888 
International sea transport (kt) 2,430 3,526 3,557 5,951 
Share of land-based sources (%) 27.8 125.7 30.7 101.1 
Source: Commissions Staff Working Paper accompanying the Communication on Thematic Strategy 
on Air Pollution , based on work from IIASA, RAINS(SEC (2005) 1133) 
Therefore, both the Commission and the co -legislators advocated  further reductions 
in marine-based emissions for the purpose of meeting EU environmental and health 
objectives, notably through the Internationa l Maritime Organizat ion (IMO). For that 
reason the co-legislators also  introduced a clause in article 7 of the 2005 amending 
Directive to review the Directive ta king into account, amongst other elements, 
progress made at the IMO with respect to fu el standards. The latter is described the 
in sections 3.2, 3.3, and 3.6. Other issues ar ising from reviewing the implementation 
of the Directive and specific questions fr om the co-legislators are addressed in 
sections 3.4, and 3.5, respectively.    
3.2. Progress at the IMO – the 2008 ame ndment of MARPOL Annex VI  
Following the above mentioned calls fo r further action, the IMO's Marine 
Environment Programme Committee (MEPC)  unanimously adopted an amendment 
to MARPOL Annex VI in October 2008.14 The amendment introduced, inter alia , a 
step-wise reduction of the maximum sulphur content allowed in marine fuels. These 
changes are summarized below and in Figure 1 :   
                                                 
9  Decision No 1600/2002/EC on the Environment Action Programme. 
10  The EU Thematic Strategy on Air Pollution (COM (2005) 446).  
11  SEC (2005) 1133: Commissions Staff Working Paper accompanying the Communication on Thematic 
Strategy on Air Pollution (COM(2005)446 final) a nd the Directive on Ambient Air Quality and Cleaner 
Air for Europe(COM(2005)447 final).  
12  EU Energy and Transport in Figures 2010, Statistical Pocketbook, European Commission. 
13  These problems were also previously acknowledged in the Commission's Communications on the 
Strategy to reduce atmospheric emissions from seagoing ships. See COM(2002) 595 final 
14  The IMO MEPC October 2008 meeting was attended by about 1 000 representatives from 95 IMO 
Parties (including 22 EU Member States), 2 Associate Member States, 4 other UN Organizations, 8 Inter-Governmental Organizations (including the European Commission) and 41 Non-Governmental 
Organizations. Of the 22 EU Member States present, Malta is not a Party to MARPOL Annex VI but 
supported the agreement. Austria,  Bulgaria, Czech Republic, Hungary  and Slovakia did not attend. 
 
EN  8  EN (1) A reduction from 4.50% by weight of the sulphur content of all marine fuels 
used globally (outside of SECAs) to  3.50% from 1 January 2012 and to 0.50% 
and from 1 January 2020 (the latter subject  to a fuel availability review in 2018); 
(2) A reduction from 1.50% by weight of the sulphur content of all marine fuels 
used in SECAs to 1.00% from 1 July 2010 and to 0.10% from 1 January 2015. 
The 2008 amendment furthermore introduced  additional provisions for reducing 
emissions of NOx. It also me ntions particulate matter PM).15 
 
Figure 1 : The new standards related to the sulphur content of marine fuels contained 
in MARPOL Annex VI as amended in 2008 
00,511,522,533,544,55
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Sulphur Content of Fuel (%)Global standard
SECA standard
 
All IMO provisions are technology neutral , hence, ships may be equipped with 
alternative emissi on abatement methods  such as scrubbers or alternative fuels (e.g. 
liquefied natural gas) to achieve complian ce. This aspect is addressed in section 
3.3.2. 
 
3.3. Differences between the EU and IMO pr ovisions regulating shipping emissions 
Following the adoption of the new IMO MARPOL Annex VI, there are now 
significant discrepancies with the pr ovisions of the Directive.    
3.3.1.  Differences related to the maximum sulphur content of marine fuels 
The main discrepancies related to the ma ximum sulphur content of marine fuels 
resulting from the 2008 IMO amendment are summarised in Table 2 . 
 
                                                 
15  Measures adopted at the IMO related to NOx and primary PM emissions are mainly linked to the 
performance of the vessel engine and that of exhaust after-treatment devices. Considering that the 
Directive focuses on fuel quality, including other th an marine fuels, regulatory initiatives to advance 
emission reductions for NOx and PM are not addresse d in detail in this report. Such measures are 
nevertheless considered important to be pursued in due course. Further options will therefore be 
assessed as part of a comprehensive review of the Thematic Strategy on Air Pollution starting in 2011 
and due in 2013.  
 
EN  9  EN Table 2: The new provisions agreed at IMO against those contained in Dir. 1999/32/EC 
Maximum permitted sulphur content of marine fuels (a) 
(Limit Values in the Directive before 2008 Marpol Annex VI)  
 IMO Standard EU Standard 
SECAs 1.0 % as of 2010 
0.1% as of 2015 1.5% 
Non-SECA areas (aka. Global standard) 3.5% as of 2012 
0.5% as of 2020(b) Unregulated 
Notes: (a) All flags, including vessels w hose journey began outside the Community;  
(b) Possibility to delay to 2025 subject to review in 2018.  
If no EU action is taken, different rules on the sulphur content of marine fuels in 
SECAs would apply in para llel. Those required by the Directive (1.5%) would be 
less strict than the MARPOL Annex VI lim its (1.0% as of 1 July 2010 and 0.10% as 
of 1 January 2015 in MARPOL Annex VI).  
Although legally undesirable but possible, su ch a situation would cause practical 
difficulties and legal uncertainty for stakeholders, including Member States' authorities, ship operators , bunker suppliers. Maintaini ng a situation whereby EU 
environmental standards are more lenient than international st andards would also 
send wrong or at least mixed si gnals to stakeholders. It would for example indicate 
that the EU no longer strives to uphold in ternationally agreed standards for the 
purpose of protecting its citizens and th e environment. In addition, the EU 
enforcement mechanism would only apply to the less stringent su lphur limits set in 
the Directive, while complia nce with MARPOL Annex VI sulphur limits could only 
be ensured by the IMO, which lacks a comprehensive and harmonised compliance enforcement mechanism.  
Finally, it is noted that the Directive currently covers only the fuel sulphur 
requirements applying within SECAs. The d ecision not to include the IMO's "global" 
standard (applying outside SECAs) was justif ied at the time on the basis of the fact 
that no strong compliance mechanism was re quired. That is because the "de facto" 
average sulphur content of marine fuels us ed globally was at a level of around 2.7% 
and well-below the level allowed by MARP OL (4.5%). However, since IMO also 
significantly revised the global standard (to 3.5% from 2012 and ultimately 0.5% in 
2020, or 2025 pending review ) there is now an equally significant ri sk that ships may 
use non-compliant fuels comparable to the s ituation in SECAs. Considering that the 
global standards are forecasted to bring subs tantial benefits to human health and the 
environment also beyond the coastal areas, an  inclusion of the global standard into 
EU law should be considered (see chapter 3). 
3.3.2.  Differences related to the use of "equivalent abatement methods" 
In addition to achieving compliance by using low sulphur fuels, the current Directive 
foresees the possibility to use equivalent  emission abatement technologies. However, 
the range of allowed abatement technol ogies is limited in comparison to the 
abatement methods authorised by MARPOL Annex VI.
16 If no EU action is taken to 
                                                 
16  The Directive defines the emissi on abatement technology as 'an e xhaust gas cleaning system, or any 
other technological method that is  verifiable and enforceable’, while MARPOL Annex VI defines 
'equivalents' as 'any fitting, material, appliance or ap paratus to be fitted in a ship or other procedures, 
alternative fuel oils, or compliance methods used as an alternative (…)'. 
 
EN  10  EN broaden the scope of the Directive and to align it with MARPOL Annex VI, EU ship 
operators would have, compared to operato rs of ships of non- EU flags, a limited 
choice of options to achie ve compliance using equivale nt methods. The discrepancy 
could also pose difficulties for non-EU ships travelling in EU territorial waters that 
are equipped with abatement methods recogn ised outside of the EU, but not allowed 
by EU rules. This limitation of the ship operators' compliance options needs to be revisited also in view promoting the de velopment of new or innovative greener 
technologies in the EU as advocated by th e EU 2020 Strategy and to ensure a level 
playing field compared to the rest of the world.   
3.3.3.  Environmental standards for passenger ships 
The present Directive requires passenger ships operating outside SECAs and on a 
regular service to or from EU ports to use marine fuels with a maximum permitted sulphur content of 1.5% (equal to the SE CA standard applying until June 2010). As 
mentioned in section 3.1, this provis ion went beyond the requirements of IMO 
MARPOL Annex VI. It was introduced in th e Directive as an additional health and 
environmental safeguard considering that pa ssenger ships operate mostly in ports or 
close to coastal areas, hence having a greater adverse impact than other ships. At that 
time the 1.5% fuel grade was available on the market following demand from ships operating in SECAs. However, with th e 2008 amendment to MARPOL Annex VI, 
the sulphur content of marine fuels in SECAs is limited to 1.00% from July 2010 
onwards and it will be further reduced to  0.10% in 2015. This rais es the question to 
what extent the provisions on passenger ships shoul d continue to be aligned with the 
new standards for SECAs also considering the state of play of ai r quality in the EU. 
3.4. Other issues arising from the review of  the implementation of the Directive 
The review of the implementation of the Di rective yielded a number of issues which 
could undermine the enforcement of key provisions of the Directive, in particular 
now that the standards have been tightened at the international level. The key issues 
to be addressed in the new post-2008 c ontext are summarized below. A detailed 
report is provided in Annex IV
 of this report.17     
3.4.1.  Member State reporting 
Member State reports on the sampling of fuels submitted pursuant to article 7 of the 
Directive were found to vary significantly in  structure and content,  with many reports 
exhibiting significant inform ation gaps. Few reports di stinguished between fuels 
used for marine or similar land-based uses, making the assessment of compliance levels with marine fuels difficult if not  impossible. Furthermore, although EMSA 
concluded that the information containe d in the log books and bunker delivery notes 
is quite reliable, it was not used as a so urce of information for the reporting. The 
present situation thus rendered the assessment of the level of compliance with the 
                                                
 
17  Whilst the review was due in 2008, it was postponed to account for the outcome of the negotiations at 
the International Maritime Organisation (IMO) which were concluded at the end of the same year. This 
allowed a more comprehensive assessment of the imp acts the IMO provisions on the European shipping 
sector and of a possible transposition into EU legisla tion. It is furthermore noted that the Directive and 
the review cover in principle also other than fuels used for marine shipping. The use of such other fuels has either been removed from the scope of Directive 1999/32/EC (e.g. road transport fuels or fuels used 
by inland water vessels) or use has gone down sign ificantly over time. Hence, these were not further 
covered by the present analysis. 
 
EN  11  EN Directive very difficult also because th e Directive currently  lacks clarity on 
minimum sampling standards (see also below).    
3.4.2.  Sampling frequency and methods 
Reports by Member States furthermore s howed that the number and frequency of 
fuel samples taken in the EU are very low (typical 1 sample per 1000 ships), hence 
insufficient to ensure a repres entative view about the fuel quality used and sold as 
required by the Directive. Samples were furthermore almost exclusively used to 
monitor the sulphur content of fuels cove red by the Directive whereas Article 7.1 
specifically requests monitoring of other ma ritime fuels not directly covered by the 
Directive, i.e. fuels having to comply with  the existing global limit for sulphur of 
4.5%. Whilst the level and quality of samp ling and analysis has often not met the 
requirements of the Directive, problems seem to stem also from a lack of clear provisions on the frequency and analytical methods to be used. Fuel sampling-based 
studies conducted by EMSA found evid ence of non-compliance with several 
provisions of the Directive thus adding to the concerns. 
3.4.3.  Adapting the Directive to recent technical progress and standards 
Several of the internationally recognised tec hnical standards and definitions set out in 
the Directive have been revised since their inclusion in the text of the Directive and 
would therefore require updating. These include: 
• test methods of the International Standards Organization used to determine the 
sulphur content of fuels and referred to  in the Directive, i.e. ISO 8754:1992, 
PrEN ISO 14596 and EN 24260:1987. These standards were updated by ISO to 8754:2003, EN ISO 14596:2007 and EN 24260:1994 respectively; 
• international standards for defining and specifying marine fuels which underwent 
a revision in 2010 (ISO 8217:2010) thus making changes necessary to the 
definitions of marine fuel, marine diesel oil and marine gas oil in the Directive. 
If the Directive's rules on fuel specifica tions, the verification of samples, or 
arbitration methods remain unchanged, the discrepancies would continue to exist 
whilst ultimately causing problems for ship operators, in particular for ships operating internationally (as di fferent standards would apply inside and outside of the 
EU).  
3.4.4.  Legal clarity 
Finally, and based on recurre nt queries to the Commissi on, additional clarifications 
in the Directive might serve stakeholders ' efforts in applying the rules of the 
Directive correctly. Specific provisions are, for example, related to the definitions for 
"passenger ships on regular service", "port area", and the provisions related to the 
verification procedure for fuel oil samples.   
3.5. Additional Emission Control A reas and complementary measures 
In addition to the elements outlined a bove, the co-legislators called on the 
Commission to consider the benefits and costs associated with the creation of additional ECAs and other alternative and complementary measures. The EU is not a 
signatory of MARPOL Annex VI  and has no mandate to ma ke proposals to the IMO. 
 
EN  12  EN However, the Commission can support Memb er States to propose new ECAs. The 
2008 amendment to MARPOL Annex VI introdu ced the possibility to designate NOx 
Emission Control Areas (NECAs) setting limit values for emissions of NOx and 
mentioned particulate matter. Followi ng the adoption of the 2008 MARPOL Annex 
VI amendment, several (mainly Nordic) i ndustry groups called for an expansion of 
the SECAs along the entire EU coastline on th e grounds that such an EU-wide SECA 
would address intra-sectoral competition issues. So far, no new ECAs have been 
proposed for approval at IMO. Meanwhile, th e parties to the He lsinki Commission 
(HELCOM), are considering to propose the designation of the Baltic Sea as the first 
European NECA to the IMO.18 Such introduction of NECAs in the EU would make 
EU-level enforcement of NOx standards a rele vant issue albeit that  it would require a 
significant extension of the sc ope of the present Directive, as it focuses on fuel 
quality rather than emission limit values, or adoption of a new instrument. Similar 
remarks apply to transposing PM provisions  into EU law once they are developed at 
the IMO19.  
3.6. The baseline 
3.6.1.  The policy baseline 
For the purpose of this impact assessm ent the "policy" baseline includes the 
provisions agreed at the inte rnational level as reflected in the 2008 amendment of the 
IMO MARPOL Annex VI which are binding fo r most EU Member States as already 
explained in section 2.2.3. It furthermore in cludes the current pr ovisions of Directive 
1999/32/EC as amended (2005/33/EC), including the shortcomings identified above.    
3.6.2.  The post-2008 environmental and socio-economic baseline   
Compared to the business-as -usual scenario defined in  2005 (see section 3.1), the 
2008 agreement is expected to deliver signi ficant pollutant emi ssion reductions from 
the shipping sector as part of the baseline. Table 3  shows the emission reduction 
effects in the Baltic and North Sea SECA wh ich are expected to exceed 90 per cent 
for SO2, and up to 80% for PM. Outside SECAs, reductions are less or even cancelled out due to growing transport volumes. Theoretic ally, additional demand 
for distilled fuels may result in increased emission of CO2 emissions up to 5% from 
EU refineries in the 2010-2015 period. Si nce refineries are covered by the EU 
Emission Trading Scheme, no net increase s in greenhouse gases are expected to 
occur. 
20  
Table 3: Impact of MARPOL Annex VI on emissions from international shipping 
 Projected ship emissions for 
2020 without MARPOL 
agreement Projected ship emissions for 
2020 with 2008 MARPOL 
agreement 
(kt) SO2 NOx PM 2.5 SO2 NOx PM 2.5 
Baltic Sea 171 404 29 14 349 4 
                                                 
18  HELCOM i s an intergovernmental organisation for the protection of the environment in the Baltic Sea 
area. See also: http://www.helcom.fi/press_office/news_helcom/en_GB/Maritime_9/  
19  At the moment, the revised MARPOL Annex VI only  mentions the particulate matter (PM) in the title 
of Regulation 14 with no specific limit values. 
20  Rather an overall reduction of GHG emissions is expected since emissions from engines using low 
sulphur distillate fuels are lower compared to HFO and because of other operational benefits such as the 
reduced need for pre-heating of he avy fuels at the bunkering sites. 
 
EN  13  EN North Sea 406 946 68 32 816 13 
Mediterranean 1714 2311 198 1714 2220 97 
Source: http://ec.europa.eu/environm ent/air/pollutants/pdf/nec6.pdf 
Monetised benefits associated with the post-2008 emission reductions and the cost 
ranges for complying with the new IMO standards are summarized in Table 4 . The 
benefit/cost ratios associated with the IMO decision taken in 2008 are highly favourable. Benefits associated with full IMO compliance are at least between €3 and 
€13 for every €1 spent whilst for the EU SECA s the benefits are at least between €5 
and €25 for every €1 spent. 
Table 4: Benefits and Costs associated with the IMO rules adopted in 2008 (AEAt, 
2009) 
2020
(€billion)  Use of 0.1% sulphur 
marine fuel in SECAs 
(Baltic Sea, North Sea, and 
the English Channel) Use of 0.5% 
sulphur marine 
fuel in non-
SECAs Full IMO 
compliance 
(SECAs and non-
SECAs)
Benefits High 23 11 34
Low 10 5 15
Costs High 4,6 6,4 11
Low 0,9 1,7 2,6
Benefit/Cost ratio High 5,0 1,7 3,1
Low 25,6 6,5 13,1  
Benefits relate to human health benefits  only (reduced mortality and morbidity). 
They do not include monetized environmental benefits (e.g., from reduced acidification and eutrophicat ion) nor economic benefits  linked to reduced crop 
losses. The higher amounts follow the establ ished monetisation of benefits of the 
CAFE
21 programme. The lower amounts flow fr om the experimental NEEDS project 
figures and are included only for sensitivity analysis purposes.22  
The high-end cost estimates reflect a comp liance strategy based primarily on the use 
of low sulphur marine fuels. Such strategies require the supply and use of distillate 
instead of the currently used residual fuels. Refineries will have to adjust or expand 
capacity to meet the new demand.  
The low-end cost estimates assume a compliance strategy based primarily on 
equivalent emission abatement methods. Examples include vessels fitted with 
scrubber technology that remove SO 2 from the exhaust gas, or vessels propelled with 
alternative fuels such as liquefied na tural gas (LNG). Options for lowering the 
average compliance costs are furthe r elaborated in chapter 5.2.2.  
                                                 
21  Clean Air for Europe Programme. 
22  The range of benefits results from the use of different assumptions to monetise premature death.  The 
monetised benefits presented are nevertheless considered to underestimate the full benefits . That is 
because the benefits arising from positive effects on  other receptors including ecosystems, agriculture 
and buildings, including cultural heritage, are not included. 
 
EN  14  EN 3.6.3.  Competiveness issues and issues related to possible modal shifts 
Although the monetized benefits yielding from the 2008 IMO agreement 
significantly exceed the estimated compliance costs, concerns about the incidence of 
those costs on specific industr y sectors were raised by se veral stakeholders. Most 
concerns focused on the new 0.1% standard  applying in SECAs from 2015 onwards. 
The short-sea shipping sector, for exampl e, feared that the introduction of this 
standard would negatively impact on their co mpetitiveness vis-à-vis road transport.   
Eight studies were commissioned by th e European Commission to support the 
revision of the Directive. One of them assesses the possible impacts of the 0.1% 
sulphur limit in SECAs, notably on short- sea shipping due to its  role in the EU 
sustainable transport policies. A series of studies on the impact of the MARPOL 
Annex VI fuel requirements on SSS in SECA s were conducted by  stakeholders. The 
European Maritime Safety Agency (EMSA)  conducted a follow-up assessment also 
summarising the findings of studies commissioned by other stakeholders.23 These 
studies are listed in Annex. I.24 Further details on fuel c onsumption and fuel price 
developments are provided in Annex VII .  
Table 5  summarizes our key findings even th ough it is noted ag ain that certain 
studies, notably those commissioned by industr y associations, yield more significant 
impacts associated with the implementation of the new IMO rules. Findings on modal shift are discussed separately below.   
                                                
 
23  The 0.1% sulphur in fuel requirement as from January 2015 in SECAs, EMSA, 13 December 2010 
24  All studies develop a scenario (besides others) that assumes the 0.1% sulphur limit will be met in 2015 
exclusively by means of using distillate fuels in the form of MGO. Since the price of MGO is higher 
than the price of the currently used HFO, all studies  conclude that fuel costs will increase. The studies 
differ in their assumptions on the baseline price to be expected in 2015 and the subsequent development of the fuel price. The estimates for the price of 1 ton of MGO in the year 2015 range from €379 to 
€1250. With regard to price development, some st udies argue that the price of MGO will rise due to 
increased demand whereas one study suggests a decrea se due to economies of scale in refining. The 
EMSA analysis concludes that under normal circumst ances the price for MGO w ill be in the range of 
€450 to €680. Compared to HFO with a sulphur content of 1.5% (SECA standard before MARPOL Annex VI was revised) it is predicted that MGO with a maximum sulphur content of 0.1% would on 
average become 65% more expensive under a fuel-based-only  compliance scenario (i.e. whereby the 
less costly technology-based compliance is not used).  
 
EN  15  EN  
Table 5: Summary of costs and similar impacts arising from implementing the 2008 
IMO agreement 
Refineries Maximum additional investment in refining capacity of €10 
billion, (beyond €15 billion already foreseen) over the six-year 
period 2010-2015.25 Increase in unit operating costs due to 
increased GHG emissions in the rang e of $0.04 to $0.13 per barrel 
equivalent or between 1% and 4% of operating costs.26   
Cost of fuels Fuel price increase of 65% (middle estimate of Purvin and 
Gertz).27   
Consumer prices Negligible cost increase as  1) fuel prices are a fraction of transport 
costs and 2) transport costs are a fraction of end-user prices (TML, 
2010).28 
Ship operators' costs TML's worst case scenar io estimates total cost increases between 
6% (RoPax) and 29% (LoLo) (fuel-based compliance only; more 
details are provided in annex VI) 
According to Purvin and Gertz (2009) operational costs are 
estimated to increase by between  6.5% and 24% for SSS and by 
40% for certain container lines (fuel-based compliance only). 
Trade Industries most likely to be aff ected are paper pulp and iron ore in 
the Nordic region (low value goods transported by bulk carriers). The effect on trade is not expected  to be significant (TML,2010).  
Third countries In the Mediterranean region the global standard will apply from 
2020 (pending review). Syria is the only non-EU coastal state in 
the region that has ratified MARPOL Annex VI. In the Baltic Sea the Russian Federation now ratified Annex VI. Since the Russian 
Federation has land borders with the EU there may be impacts on 
cross-border trade under the base line should enforcement of the 
rules be not stringent enough. Specific  impacts need to be 
assessed on a route-by-route basis. There will also be 
environmental and health benefits in third countries due to reduced 
trans-boundary air pollution from EU ships meeting IMO 
obligations. 
 
Several studies assessed the effect of the increased fuel price with regard to the total 
transport costs and the consequence for expor t oriented industry and/or with regard 
to potential shifts in  transport modes. Whilst it is undi sputed that the transport pattern 
                                                 
25  Purvin and Gertz (2009), Impacts on the EU Refining Industry and Markets of IMO Specification 
Changes and Other Measures to Reduce th e Sulphur Content of Certain Fuels.  
26  Assuming a worst-case scenario where only a low su lphur fuel compliance option is available but no 
technological equivalents, are used to meet compliance. Hence these es timates are considered to reflect 
an upper range. 
27  Purvin and Gertz (2009). Estimates are considered to reflect an upper range for the same reason referred 
to in the footnote above.  
28  TM Leuven (2010), The COMPetitiveness of EuropeAn  Short-sea freight Shipping compared with road 
and rail transport 
 
EN  16  EN in SECAs will change, no coherent scheme  emerged as to the pattern of those 
changes. The EMSA summary repor t draws the following conclusions:29 
• Increased fuel costs will affect profit margins for the shipping sector and have 
some effects on the short-s ea shipping patterns in SECAs, albeit the risk for 
modal (back) shifts to road transport applie s mainly to certain routes to and from 
the Baltic States and English Channel under the high-cost fuel-only compliance scenario; 
• Medium distance routes would be more aff ected than shorter or longer routes as 
transport operators favour shorter sea segments as opposed to a truck only 
option;  
• Routes that have a low degree of utilisat ion are more prone to receive additional 
traffic.  
• Cargo and container ships are more aff ected than ferries whereby low value 
cargoes are more vulnerable; 
• Existing shipping routes that were co mpetitive already when using 1.5% HFO 
will remain so after 2015 when the 0.1% limit applies.  
In sum, the ultimate impact of the new IMO rules will vary depending on the specific 
route taken, the ship and commodity type ( cargo), length of sea segment and whether 
a ship operator can pass on increased fuel prices to its customers. Some studies 
conclude that certain indus tries competing with busines ses located in countries 
outside SECA zones would have a compe titive disadvantage. Examples of products 
concerned include forest products/paper, metals/ore and to a smaller extent 
foodstuffs, building materials and chemicals.  
4. O
BJECTIVES  
4.1. General objectives 
Considering the progress made at the IMO a nd the issues that arose from reviewing 
the implementation of the Directive, the general objectives bei ng pursued during the 
present review are: 
a)  To ensure the delivery of the health  and environmental benefits by reducing the 
negative impacts of air polluta nt emissions from shipping; 
b)  To ensure the functioning of the inte rnal market for maritime shipping, EU ports, 
and fuels and emission abatement technologies used in shipping. 
4.2. Specific objectives 
In addition, a number of specific objectives  have been pursued in line with the 
problem characterization and baseline issues  described in chapter 3. These are:   
(1) To ensure alignment of EU law with th e latest international rules on maritime 
fuels and pollution, including the adaptation to advanced technical standards and technologies; 
                                                
 
29  Based on a price for MGO in  the range of €450 to €680 
 
EN  17  EN (2) To identify additional and/or alterna tive measures for reducing the negative 
environmental impact of emissions from maritime shippi ng on human health 
and the environment;    
(3) To strengthen and enhance the implem entation of the EU monitoring and 
enforcement regime ensuring compliance with the Directive.  
4.3. Consistency with the other European Union policies 
Consistency with other EU policies and st ated priorities has been sought in the 
development of the policy options. Policies particularly consider ed include "Europe 
2020", notably in relation to its smart a nd sustainable growth priorities and 
associated flagship initiatives such as the 'Resource Efficient Europe' and 'Innovation 
Union' 30, and more specifically EU policy pr omoting of environmental friendly 
transport modes. Where appropriate, guidance from relevant Council meetings has been accounted for. Examples include  the 2 December 2010 Transport Council 
conclusions that emphasised the need for a comprehensive approach to address the 
intra EU waterborne transport environmen tal issues whilst inviting the Commission 
to "closely monitor Short Sea Shipping cost developments and to propose and 
evaluate possible responses aiming at avoi ding possible distortions in the logistics 
chain and modal backshift from sea to la nd […]. The White Paper on competitive 
and sustainable transport calls for a reduc tion of GHG emissions from the transport 
sector, inter alia, through a decarbonisation by improvi ng energy efficiency and 
developing new sustainable fuels.  
 
4.4. Treaty base and the subsidiarity principle 
The right for the EU to act on the regulati on of the sulphur content of liquid fuels 
with significant impact on the internal mark et and the environment is established in 
Article 3 of the Treaty.  
Given that the IMO's new requirements on marine fuels will de facto  bind ship 
operators, there is a que stion of whether there is suffici ent added value in transposing 
these new regulations from the IMO into EU law and whether such a course is 
proportionate and consistent with  the subsidiarity principle. 
Compliance with the subsidiarity princi ple depends on two tests. Firstly, the 
necessity test assesses whether the obj ectives can be sufficiently achieved by 
Member States. Incoherent transpos ition of the 2008 IMO MARPOL Annex VI 
amendments by Member States could potentia lly lead to distortions of the internal 
market for the shipping indus try, port operators  and suppliers of marine fuels. The 
lack of EU action would lead to two coexis ting but inconsistent legal systems (2008 
MARPOL Annex VI and Dir ective) resulting in an unequal implementation of 
international rules.  
Secondly, the EU value-added test consid ers whether objectives can be better 
achieved by action at EU level. The lega l framework of international agreements 
such as MARPOL lacks the mechanisms that would ensure an even enforcement  of 
the rules on the sulphur content of liquid fuels across the EU. Unequal enforcement 
                                                
 
30  COM(2010) 2020, Communication from the Commission on “EUROPE 2020 - A strategy for smart, 
sustainable and inclusive growth” 
 
EN  18  EN practices would undermine comp liance with the environmenta l standards set at IMO, 
with associated negative health and e nvironmental impacts, and would introduce 
distortions to the internal market. 
In conclusion, action at EU  level is necessary to deliver a harmonized legal 
framework to meet the objectives associ ated with the transposition of the 2008 
MARPOL Annex VI amendments.  
5. POLICY OPTIONS AND THEIR ASSESSMENT  
The sections below list and assess the policy options that were identified to address 
the general and specific objectives de fined during the review process.  
5.1. Method and criteria for assessing impacts 
The methodology recommended by the impact  assessment guidelines was adopted 
for the purpose of comparing the policy op tions. The impacts of the different policy 
options were considered according to their e ffectiveness, efficiency, as well as legal 
certainty and coherence with standing EU objectives and priorities. For each of the respective policy options, a 'do nothing' or  'option 0' has been considered.   
5.2. Options for aligning EU la w with the latest internat ional maritime fuel rules 
5.2.1.  Options for aligning the maximum su lphur content of marine fuels  
The sulphur content of marine fuels in the EU is to a large exte nt regulated through 
the Directive. The latest international ag reement on this issue makes it necessary to 
consider updating several provisions in the Directive. The options here are: 
Option 0 Do not incorporate the 2008 IMO amendment of MARPOL Annex 
VI relating to the sulphu r content of marine fuels into the Directive 
Option 0- Repeal Directive 1999/32/EC  
Option 1 Incorporate the 2008 IMO am endment of MARPOL Annex VI 
relating to the sulphur content of marine fuels into the Directive 
Option 2 Incorporate the amendment with  (a) earlier; (b) later dates for the 
entry into force of the obligations to move to lower sulphur fuels. 
Option 0 was discarded  at the early stages of the analysis as it would result in 
parallel and inconsistent regulations that would lead to mixed signals to operators 
and public authorities and cr eate distortions. The main motivation to transpose 
MARPOL Annex VI provisions into EU law is  to ensure its application by the EU's 
monitoring and enforcement infrastructure a nd experience. This is deemed necessary 
because IMO does not systematically verify the transposition and enforcement of these provisions by its parties. The impl ementation of the 2008 provisions on the 
sulphur content of fuels may result in signi ficant marine fuel pr ice increases creating 
an incentive for circum vention strategies: 
 
EN  19  EN • Not complying with IMO standards woul d yield lower operating costs for ship 
owners thus allowing to gain illegitima te operating margins (higher profits) or 
lower transport fees (higher volumes).  
• By not monitoring or enforc ing IMO standards, ports c ould attract higher traffic 
volumes.  
Moreover, harmonised transposition and enforcement of the MARPOL Annex VI 
provisions would ensure a le vel playing field across MS , including those who have 
not yet signed and ratified this Annex.  
Option 0 minus was discarded  for similar reasons. This option would not only 
abolish the EU's system of enforcement.  Provisions that go beyond IMO rules would 
also be lost (e.g. on fuels used at berth or for passenger transport). Furthermore, 
options 0 and 0-minus would not be in lin e with the overall EU objective to improve 
human health and environment.  
Option 1 was retained. This option  aligns EU rules on the sulphur content of liquid 
fuels used in maritime transport with international law (the 2008 IMO MARPOL 
Annex VI) and would be c onsistent with the EU's commitment to honour and 
enforce international agreements. Equally, it would meet the rights and obligations 
of Member States under international law, while making the EU's compliance 
mechanisms available to Member State authorities as well as stakeholders covered by the IMO provisions. Option 1 would furt hermore extend the scope of the current 
Directive to include the globa l standard (non-SECA standard). The inclusion of the 
global standard in the Directive would bri ng together all applicable marine fuel 
sulphur standards in one legal text, whic h would provide greater legal clarity and 
ensure that the environmental and health benefits associated with the IMO sulphur 
standards applicable outside SECAs materialize. Further, EU law offers a framework 
for monitoring and enforcement, whic h is lacking at IMO, allowing the 
harmonization of rules across the territorial  waters of Member States. The global 
sulphur standard of 0.5% from 2020 (o r 2025 pending review) will have economic 
implications for operators , indicating that harmonized  and robust monitoring and 
enforcement will be necessary. The impacts associated with keeping this option are 
therefore considered the same as those exp ected to occur for the baseline scenario, 
albeit with more certainty that the fu ll environmental and associated monetized 
impacts on health would be reaped. Option 1 would contribute towards meeting the 
general objectives defined in Chapter 4 and specific objective 1 in a most effective 
way as it would align EU law with the mo re ambitious international sulphur limit 
standards while ensuring that these standards are properly enforced as well as ensuring the proper functioning of the internal market. This alignment would foresee 
the same date of entry into force for th e new sulphur standards as MARPOL Annex 
VI, providing legal certain ty for stakeholders.  
The variants developed under option 2 were discarded.  Incorporating the 
amendment at a later date (option 2.b) c ould leave Member States which are Parties 
to MARPOL Annex VI in breach of internat ional law if they decided to implement 
its rules only when implementing the Direc tive. Incorporating the amendment at an 
earlier date (option 2.a) would advan ce these benefits. However, there are 
transitioning costs associated with th e change to the ne w MARPOL Annex VI 
 
EN  20  EN provisions. As such it is recommended that the full amount of time until IMO rules 
come into force is given to operators.  
5.2.2.  Options for aligning the provisions a llowing the use of "e quivalent methods" 
Option 0 Maintain the current Directive's approach to achieve the reduction of 
SO 2 emissions, i.e. fuel-based compliance as a rule and limited 
possibilities for technol ogy-based compliance 
Option 1 Align the Directive with the IMO provisions that allow a broader 
range of equivalent emission abatement methods  
Option 2 The same as option 1 but comp lemented with additional safeguard 
measures to those already deve loped by IMO to ensure that 
equivalent abatement methods do not cause environmental damage.  
 
Option 0 (no EU action) was discarded  for the reasons described in section 3.3.2. 
Option 1  would provide the most effective and efficient way to achieve the 
objectives defined in Chapter 4 as it would allow the use of a broader range of abatement methods to meet the sulphur emission limits, at the same providing more cost-effective means of compliance compared  to petroleum fuel based compliance.  
Liquefied natural gas (LNG) is virtually su lphur free and its use for the propulsion of 
ships is an attractive alte rnative to reach compliance with MARPOL Annex VI.  
LNG propelled ships also emit less PM, NOx, and GHG improving their overall environmental performance. The current price for LNG is more than 50% lower than the price of heavy fuel oil, resulting in pay back times for the additional costs of 
LNG engines of less than a year. The current lack of sufficient LNG supply infrastructure, however, remains a challenge but the use of LNG as fuel could be a suitable option in particular for short-sea shipping.   
Scrubber technologies use fresh or sea wate r in order to remove SO2 from exhaust 
gases with a potential efficiency of more  than 90%. Following successful trials, 
classification societies have already certified such equipment for use. According to 
their manufacturers, scrubbers are cu rrently available for use in ships.
31 As outlined 
in the example below which assumes a year ly fuel consumption of 30 000 tonnes, the 
installation of scrubber technology can be significa ntly cost-effective when 
compared to fuel-based compliance. Pay- back times comparatively short suggesting 
to significantly increasing the cost-eff ectiveness of the IMO decision 2008.   
                                                 
31  EMSA, December 2010 
 
EN  21  EN Example 
Comparison of the costs of compliance of a cr uise ferry, with a combined engine power of 
40MW, requiring 30K tonnes fuel per year, operating in a SECA requiring the use of 0.1% 
sulphur fuel or achievement of equivalent emissions of SO2 using a sea water scrubber.  
1) Yearly fuel costs for 0.1% sulphur fuel32:       13.5 – 20.4  M€ 
2) Yearly fuel costs HFO                                     9.9  M€ 33 
Estimated investment costs for the scrubber:   3  M€ 
Total:                                                               12.9  M€ 
3) Scrubber pay-off time in relation to fuel:  8 - 12  months  
 
The 2009 AEAt study estimated annual abatement costs resulting either from the use 
of low-sulphur fuel or from the use of equivalent technology/ scrubbers. Table 6  
summarizes the result for the Baltic Sea and the North Sea.  
Table 6: Regional IMO compliance costs (Million Euros, 2020) 
  Low price 
scenario High price 
scenario 
Baltic Sea SO2 scrubber cost 120 540 
 Low sulphur fuel cost 977 1180 
North Sea SO2 scrubber cost 284 1271 
 Low sulphur fuel cost 2302 2778 
Depending on the price scenario, the cost of  using scrubber technology reduces the 
overall compliance costs with the 0.1% SECA standard between 50% and 88%. The 
cost difference between the us e of low sulphur fuel and th e installation of scrubbers 
to achieve the same reduction of SO2 em issions is considerable and it can be 
anticipated that ultimately the use of scr ubbers will prevail as a compliance option.  
It should be noted, however , that the use of abatement methods incurs operational 
costs as regards monitoring of compliance.  On the other hand, safeguard measures 
developed at international level for alternat ive methods might need to be reassessed 
with regard to their impact  on vulnerable European eco systems such as brackish 
waters, enclosed ports and estuaries. For example, the impact on ocean acidification 
in case of widespread use of sea water scrubbers and releases into the marine 
environment of substances other than SO 2, such as polyaromatic hydrocarbons, may 
make it necessary to revise criteria for th e discharge of wash water for the exhaust 
gas cleaning systems when more data b ecomes available. Moreover, scrubbers 
generate sludge that requires proper pro cessing following transfer to waste reception 
facilities. Safety guidelines might be nece ssary to ensure safe treatment of the 
sludges. .  
Option 2 was retained. Like option 1,  this option  aligns EU rules with international 
rules whilst incorporating a mandate for the Commission to develop, if deemed 
necessary, safeguard measures to ensure that equivalent abatement methods do not 
cause damage to health, safety or envir onment. This would entail, for example, a 
                                                 
32  Based on a price for MGO in  the range of €450 to €680 
33  Price for HFO with 2.97% sulphur content projeted by Purvin and Gertz study (2009): 420USD. It is 
assumed that operational costs including additional fuel consumption for exhaust gas cleaning add 4% 
to the fuel costs.   
 
EN  22  EN review and possible strengthening of th e IMO wash-water criteria applying to 
scrubbers.  
The overwhelming majority of respondent s to the public consultation (72%) 
supported this option, while one fifth suggest ed that additional safeguards to those 
already developed by the IMO should be co nsidered to ensure that abatement 
methods do not cause damage to hea lth, safety or the environment. 
5.2.3.  Options for adapting the Direct ive to technical standards 
Option 0 Do not align EU law with the most recent ISO and CEN standards 
Option 1 Align references and definitions  in the Directive with the latest 
international standards. 
The most recent ISO and CEN standards refl ect the most up-to-date knowledge. In 
view of maintaining the Directive in line with the most recent standards option 0 is 
discarded  and option 1 kept  as the most efficient a nd effective in meeting the 
objectives defined in Chapter 4. The appl ication of the intern ationally recognised 
technical standards is also important to ensure legal certainty for stakeholders. A 
clear majority of stakehol ders supported option 1. 
5.2.4.  Fuel verification procedure 
Two concurrent methods for the statistical interpretation of the verification of the 
sulphur content of marine fuels are applie d by different Member States, which results 
in lack of clarity for shipping operators: 
Option 0 Do not change current provisions 
Option 1 Introduce ISO method 4259 for fuel verification; 
Option 2 Adopt IMO fuel verification procedure 
 
The 'do nothing' option 0 is discarded  as it does not provide an effective and 
efficient solution to meeting the objectives defined in Chapter 4. To ensure legal certainty for ship operator s the Directive should indicat e more clearly which method 
is to be used for the purposes of assessi ng compliance. Further, the Directive should 
refer to only one method as such an appro ach is sufficient for sampling and analysis 
purposes and will improve clarity (at the mo ment there is a reference to two ISO 
methods). 
IMO and ISO methods differ in their mi nimum test requirements making the ISO 
methods less precise and less costly. Howeve r, the IMO method is statistically more 
reliable and thus provides a higher legal certainty compared to the ISO method. 
Option 1 is discarded  and option 2 is retained . A majority of more than 60% of 
the respondents of the public consultation supported option 2.  
 
 
EN  23  EN 5.3. Options for additional and alternative measures to improve the environmental 
performance of the shipping sector 
5.3.1.  Additional Emissions Control Ar eas and emission limit values 
Option 0 Do not introduce new ECAs and emission limit values for NOx in 
the Directive 
Option 1 Introduce new ECAs or new emi ssion limit values as a requirement 
in the Directive 
An initial assessment34 of the costs and benefits asso ciated with the designation of 
the Mediterranean and the Black Sea as  additional ECAs for both SOx and NOx 
suggested that the benefits exceed the co sts, although the benef it-cost ratio would 
likely be smaller than for the ex isting European SECAs. However, option 1 cannot 
be fully assessed at this point of time.  In order to allow for an improved analysis 
necessary to meet IMO's ECA criteria and for an assessment of emission limit values 
as an instrument to regulate ship emissions, option 0  is retained for the time being.  
The Commission intends to proceed with a dditional analysis, also looking at the 
costs and benefits of additional ECAs. Th e overwhelming majority of respondents to 
the public consultation (close to 70%) were of the view th at the EU Member States 
should endeavour to establish new SECAs in the EU. 
 
5.3.2.  Options for reducing emissions from  passenger ships on regular service 
Option 0 Maintain the 1.5% ob ligation for passenger ships 
Option 0 - Remove current obligation to comply with 1.5% sulphur content for 
passenger ships, implying the use of 3.5% fuel until 2020 and 0.5% fuel thereafter 
Option 1 Restore the link with the SECA  sulphur content in fuel provisions, 
introducing the new 0.1% limits for passenger ships as of 2015 
Option 2 Restore the link with the SECA  sulphur content in fuel provisions 
for passenger ships, introducing the new 0.1% limit in 2020 
 
 The cost-benefit analysis associated w ith the present options under review is 
provided in Table 7
 below. It uses the high price scenario of the AEA study in order 
to calculate the additional costs compared  to the baseline of 0.5% fuel use.  
                                                 
34  AEAt (2009),  Cost Benefit Analysis to suppor t the impact assessment accompanying  the revision of 
Directive 1999/32/EC on the sulphur content of certain  liquid fuels.  
 
EN  24  EN Table 7: Cost-benefit analysis assessing the in troduction of the 0.1% fuel standards for 
passenger ships operating outsid e SECAs on a regular service 
  € million/year 
 Costs of compliance 
using low-sulphur 
fuel Costs of compliance 
using scrubbers Benefits Benefits / costs 
ratio for scrubber 
use  
2015 0 0 0 - 
2020 304 57 - 157 102 – 339 1.5 – 6 
2025 368 45 - 168 132 – 455 0.8 – 10 
The results suggest that the compliance costs for using lo w sulphur fuel are in the 
same order as the expected benefits. A cost benefit analysis based on the more realistic scenario of achieving compliance by using scrubbers indi cates net benefits 
of up to 10 euro for each eu ro spent (see table 6).  
Option 0  implies the use of 1.5% fuel until the global standard of 0.5% comes into 
force in 2020. This corresponds to the baseline (do nothing option) and would 
therefore bring no additional environmen tal benefits in the non-SECA areas.
35 
Considering the persistent air quali ty problems, notably also around the 
Mediterranean sea, option 0 is discarded as it would be inconsistent with the general 
and specific objectives being pursued.  
Option 0 minus  is equally discarded as it woul d allow passenger ships operating 
outside SECAs to use fuel with a sul phur content of 3.5% at least until 2020 and 
would lead to a worsening of  environmental and health impacts. This option would 
have negative effects on meeting the objec tives defined in Chapter 4 and would not 
be coherent with the overall EU objective to improve the environment and citizens' 
health.  
Option 1  is discarded. This option would have  positive health and environmental 
impacts. However, it would not be the most efficient option from the economic perspective as it could furt her increase demand for 0.1% fuel and thus put additional 
pressure on a market that needs to ad just to new fuel requirements.   
Option 2  reflects the scenario whereby the maximum sulphur content for passenger 
ships operating outside SECAs in a regula r service would be lowered from the 
present level of 1.5% to 0.1% in 2020. Option 2 would be slightly less effective in 
meeting the health and environmental objec tives as it would be introduced 5 years 
later than option 1. It woul d be more efficient from an economic perspective while 
giving passenger ships more time to ensure  compliance with the new sulphur limits 
and thus is an effective and pragmatic approach to meet specific objective 2. An 
assessment of a possible increase of an indivi dual ferry passage is only feasible at the 
                                                
 
35  Passenger ships operate mostly in  ports or close to coastal areas an d their impacts on human health and 
the environment are typically greater per tonne of emissions than other types of ships. In particular, 
many passenger ships on regular service such as ferries operate on schedules that entail a residence time 
at ports of less than two hours. In  such a case, ferries are not obliged to carry out a switch to 0.1% fuel 
and may continue to use fuel of a higher sulphur content contributing to low ambient air quality 
observed in port cities. To address this issue the obligation for all ships to meet 1.5% in SECAs was 
extended to passenger ship s operating with regular service in non-SECAs.  
 
EN  25  EN level of individual routes, albeit impact on end-consumer prices is assumed to be 
negligible. Considering the costs of fu el based compliance and the costs of 
compliance applying alternative methods, an  increase of the operating costs in the 
range of 2-13% may result. The Compass St udy examined the cost structure of small 
and large passenger ferries (RoPax) and, acco rding to this study, the share of fuel 
costs for these ships is between 16 and 19% of the daily operating costs.   
5.3.3.  Emission Trading Options 
The use of an emissions trading scheme  to meet environmental goals, could be more 
efficient (cost-effective) in meeti ng the objectives. In 2005 the Commission 
published a study on the feasibility of usi ng economic instruments to reduce ship 
emissions in the EU36. This followed from an in itial study published in 200437. The 
study focused on a selection of economic inst ruments, namely emissions trading and 
voluntary differentiated port charges. In addition the study also considered the 
possibility of using public subsidies to  meet environmental objectives. The key 
recommendation of the study s upported emissions trading as  more cost-effective than 
'command-and-control' legislation (although on the basis of a set of assumptions, 
including 0.5% minimum sulphur content of fuels in SECAs). However, a more recent study specifically focusing on the issue (for both SO2 and NOx) concluded 
that it is not legally possible to deviat e from or offset th e MARPOL Annex VI 
requirements (applicable to individual ships) through an EU  Emissions Trading 
System (ETS) unless such a possibility was created within the IMO framework 
(VITO 2010
38). The study also concluded that, un der the assumptions that individual 
ships comply with MARPOL Annex VI and that there would be the possibility to 
trade with land-based emission sources, th ere was limited scope for SO2 trading. As 
no IMO agreement currently exists allowing for environmental objectives set at international level to be met by an emissi ons trading scheme, this option has been 
discarded. 
5.4. Options for strengthening the monito ring and enforcement provisions to 
enhance the implementation of the Directive 
5.4.1.  Options for strengthening the provis ions on sampling and analysis of fuels 
The requirement in the Directive for repres entative sampling and analysis allows a 
wide range of interpretation. Also, the Directive does not set out what format 
Member State reporting should take. Reports  from Member States  differ widely in 
format and content and do not allow an assessment of the implementation of the Directive.  
Option 0 Do not change current provisions 
Option 1 Issue non-binding guidelines at EU level, developed by the 
Commission itself or with the suppo rt of stakeholders (e.g., EMSA, 
                                                 
36  Economic Instruments for Reducing Ship Emissions in the European Union (2005)  
http://ec.europa.eu/environment/air/pdf/task3_final.pdf  
37  Evaluation of the Feasibility of Alternative Market-Based Mechanisms To Promote Low-Emission 
Shipping In European Union Sea Areas (2004) 
http://ec.europa.eu/environment/air/pdf/04_nera_report.pdf  
38  Market-based instruments for redu cing air pollution (VITO, June 2010) I 
 
EN  26  EN CEN, Member States) 
Option 2 Produce harmonized binding rules 
Option 3 Foresee developing a non-bindi ng guidance at a first stage and, 
should this approach fail, cons ider adopting bi nding rules (a 
combination of option 1 and 2) 
Option 0  is discarded as it would not provide an effective and efficient solution to 
meet the objectives defined in Chapter 4. Option 3  (a combination of options 1 and 
2) is the preferred option as it would provi de a more efficient solution compared to 
option 1 or 2 alone. 0ption 3 is in line with the general approach to EU policy making, i.e. to choose a lighter course of ac tion, if possible, and only if that approach 
fails to introduce binding ru les. The review showed that  problems of non-compliance 
often stem from a lack of understanding on how to implement the rules of the 
Directive. Therefore, guidance can be the most efficient means to meet specific 
objective 3, mentioned in section 4.2., as it al so incurs lower tran saction costs than 
option 2. However, the non-binding character of the measure is not optimal from a 
legal certainty and effectiveness point of vi ew, so this option fore sees the possibility 
to adopt binding rules if the lighter appro ach does not deliver the expected results. 
Option 3 also best meets the divided views of stakeholders expr essed in the public 
consultation. The public consultation showed an overwhelming support for 
strengthening the enforcemen t of rules on the sulphur limit for marine fuels.  
5.4.2.  Options for improving legal  clarity and certainty 
The need to provide clarification on the definition of "port area" and "passenger ships 
on regular service" was set out abov e in section  3.4.4 and Annex IV.   
Option 0 Do not change current provisions 
Option 1 Same as option 0 but issuing guida nce to assist stakeholders with the 
interpretation and implementation of the Directive 
Option 2 Include a definition for "Passenger ships on regular service" and 
"Port area"; 
Option 0 is discarded as it would not clarif y the status of passenger ships on regular 
service and port area un der the Directive.  
Option 1 , supported by a substantial number of stakeholders that expressed their 
opinion in the public consultation, is kept  as it is sufficient to keep the possibility for 
the Commission to issue guidance on the enfo rcement of the Directive with regard to 
port areas and passenger ships on regular serv ice. This option seems more efficient 
than option 1 as provides competent authorities  with flexibility necessary to take into 
consideration local circumstances. Even t hough option 1 seems to provide more legal 
certainty than option 2, the rigid definiti on could provide room for circumvention. 
Option 2 is equally discarded as too stri ct definitions may introduce undue loopholes 
or insufficiently address local circumstances.  
 
EN  27  EN  
5.5. Supplementary measures to address impacts on short sea shipping 
Option 0 No measures specifically addre ssing possible modal shift from sea to 
land-based transport 
Option 1 Adaptation of existing measures to specifically target impact on 
modal shift 
Option 2 Develop additional approaches for a sustainable waterborne 
transport 
The EMSA summary of available studies  on the impact of the 0.1% sulphur 
requirement in SECAs on short sea shipping concludes that this provision will have 
some effects on shipping patterns. Th is may justify future measures. Option 0  is 
discarded because it would exclude potential measures.  
Option 1  would allow for measures to support SSS industry for a transitional period, 
with the objective of reducing undesirable mo dal shift from sea-based to land-based 
transport. Such a package might include th e adaptation of existing measures (e.g. the 
Marco Polo programme or the TEN-T progr amme) in a way which addresses the new 
challenges. This would not incur additional costs to existing programmes. The vast 
majority of respondents to the public  consultation supported this option. 
Option 2  would imply additional measures. Such measures may require new 
proposals and need further studies and stakehol der consultation to be further assessed 
to be integrated in a more comprehensive policy framework. An overview of existing and additional measures is  provided in Annex VIII
.  In line with the objectives of the 
future White Paper for Transport and the revised TEN-T policy, the Commission will 
present a multi-dimensional action approach --'a sustainable waterborne transport toolbox'-- which could assist the sector to  improve its environmental performance 
while maintaining its competitive position. 
The main policy objectives will be to improve the environmental performance and 
energy efficiency of the Shor t Sea Shipping, while protectin g the internal market for 
SSS. It will also endeavour to provide for the right infrastructure which would 
support clean technology, and en courage green shipbuilding. 
The sustainable waterborne transport toolbox could incl ude regulatory measures, 
green technology, alternative fuels, in frastructure, economic and funding 
instruments, research and innovation. Furthe r details are elaborated in annex VIII.  
Option 2 requires further assessment. Under current evidence option 1 is kept as an 
efficient and effective means of mee ting the objective of delivering the 
environmental and health benefits by ma king the sulphur limits stricter, while 
providing support to the affected industr y. At a later stage option 2 may be 
considered. 
 
EN  28  EN 6. SUMMARY OF THE IMPACTS ASSOCIATED  WITH THE PREFERRED OPTIONS  
6.1. Summary of baseline, retained options, benefits and costs (€ billion, 2020) 
Baseline ("no action")  Retained options  Benefits Costs 
1. Alignment of EU law with revised MARPOL rules  
Alignment of maximum sulphur  content of marine fuels  
Do not incorporate the 2008 MARPOL Annex 
VI provisions relating to the sulphur content of 
marine fuels into the Directive  Incorporate 2008 MARPOL Annex VI 
provisions relating to the sulphur content of 
marine fuels into the Directive (option 1)  Ensure full environmental and health benefits, 
harmonized and improved enforcement  Risk of undue modal backshift to land based transport on some routes
 
Alignment of the provisions related to the equivalent emission abatement methods  
Maintain limited possibilities for technology-
based compliance  Broadening of the allowed technology-based 
compliance complemented with additional 
environmental safeguards (option 2)  A more cost-effective means of ensure full 
environmental and health  benefits, harmonized 
and improved enforcement  Reduced compliance costs compared ranging 
between €3.7 and 8.4 billion  
Adaptation to advanced technical standards  
Do not align EU law with the most recent ISO 
standards and international definitions  Align references and definitions in the 
Directive with the latest international standards 
(option 1)  Legal certainty  Immaterial  
Fuel verification procedure 
Do not change current provisions on the method of analysis Adopt IMO fuel verification procedure  
(option 2)
 Legal certainty Not significant when compared to fuel price 
2. Designation of additional ECAs and/or emission controls  
Additional emission control areas and emission limit values  
Do not introduce new ECAs and ELVs in the 
Directive  Baseline is the retained option  Allows refinement of cost benefit analysis Costs of inaction: unrealised env and health 
benefits 
    
Environmental standards for passenger ships on regular service  
Maintain the 1.5% obligation for passenger 
ships Link with the SECA standard for passenger 
ships 0.1% limit in 2020 (option 2)  Monetized health benefits ranging between € 102 – 339 million Compliance costs ranging between € 57 – 304 
million 
3. Strengthening the implementation of the Directive  
Sampling ,and analysis of fuels, defin itions of regular service and port area  
Do not change current provisions  Develop non-binding guidance followed by 
binding rules if necessary Tiered and proportionate approach  Effectiveness uncertain  
4. Supplementary measures to address impacts on short sea shipping  
No measures on possible modal shift (sea- to 
land-based transport)  Adaptation of existing measures to specifically 
target impact on modal shift (option 1)  Reduction of undesirable modal shifts; promotes innovation No additional costs, redirecting public funds 
from other uses 
 
EN  29  EN 6.2. Environmental Impacts 
The transposition of the IMO provisions rela ting to the sulphur content of marine 
fuels into EU legislation has a priori  no additional major environmental impact as 
IMO provisions cover 84.23% of world shipping  tonnage and all but one costal state 
of the EU are parties to MARPOL Annex VI. The added-value of a transposition 
results from the strengthening of the enforcement of the IMO requirements. An estimate of the environmental impacts is a function of the extent Member States 
would enforce IMO provisions on fuel quality  in the absence of EU legislation. The 
implementation of any legislation incurring  potentially significant costs requires 
strong enforcement. Therefore only mandatory  enforcement at EU level will ensure 
the delivery of the predicted environm ental benefits of the IMO provisions.  
As an alternative to the use of low su lphur fuel, compliance with the sulphur 
requirements can be achieved by using sc rubber technology. Scrubbers do not only 
reduce the SO2 content of e xhaust gases but reduce also other pollutants such as 
NOx and particulate matter to some degree. On the other hand, scrubbers increase the 
fuel consumption of a ship by 1-3% and cause an increase of greenhouse gas 
emissions if no further measures to increase  the overall energy efficiency of a vessel 
are taken. A cost-effective measure is for ex ample to marginally decrease the speed 
of a ship. A future inclusion of the ma ritime sector under EU  ETS would cap any 
increase in CO2 emissions and would in centivise reduced fuel use. Additional 
safeguard measures may become necessary in order to avoid a negative environmental impact from the use of emission abatement methods. The chosen option provides for the possibility  to develop such measures.  
The designation of new Emissions Control Areas for emissions of SO2 and NOx and 
the introduction of emission limit values fo r NOx would result in a reduction of the 
emissions of these pollutants and the form ation of secondary particulate matter. 
However, since IMO has not yet agreed on such measures it would be premature to 
propose new ECAs or other emission lim its at EU level at this point.  
The maximum sulphur content allowed for pa ssenger ships on regular service outside 
SECAs will decrease from 1.5% to 0.5 % as of 2020 (pending review, the 
introduction of this provision might be pos tponed to 2025). An introduction of the 
0.1% standard to internationa l passenger shipping instead of the 0.5% standard will 
have a significant environmental impact on emissions in the Mediterranean Sea, the North East Atlantic and the Black Sea.  
Measures addressing compliance monitori ng, reporting, adaptation to technical 
progress and legal clarity improve implemen tation of legislation and thus have a 
positive environmental impact.  
6.3. Economic Impacts  
The IMO agreement is considered to be a cost-effective internalization of pollution 
damages, thus moving the economy to a more  efficient equilibrium. This effect is 
part of the baseline. In addition to the baseline, the harmonization of the enforcement of IMO rules at EU level wi ll contribute to a more level competitive field for 
economic operators across intra-EU borders. 
 
EN  30  EN Costs resulting from the 2008 IMO requireme nts on the sulphur content of marine 
fuels are included in the base line. Broadening the presen t provisions for "equivalent 
emission abatement methods, will help achieving the benefits associated with the new IMO at significantly reduced costs with savings ranging between €3 and 8 
billion by 2020 or between 50 and 80 per cent of the baseline costs. Demand for 
alternatives to low sulphur  fuels will stimulate innovati on and productivity in the 
abatement technology market.  
Direct costs resulting from the transposit ion of the IMO provisi ons on the sulphur 
content of fuels are limited to additional sa mpling and analyses necessary to further 
verify the global fuel standard. Compar ed to baseline compliance costs, these 
additional cost are negligible.  
The 0.1% fuel standard for passenger ship s operating on regular service outside of 
SECAs will result in additional yearly compliance costs of €57 million-€300 million 
(for details see table 8). Consumer prices (e.g. for the use of a ferry) are likely to 
increase. The wider monetized impacts on health of this m easure are generally 
expected to exceed these costs. This provision harmonizes the fuel standards for passenger ships operating within and outside of  SECAs. Therefore, it contributes to a 
level playing field for the passenger ship  industry in the EU. The provisions on 
compliance monitoring, reporting, adaptation to  technical progress and legal clarity 
will strengthen and harmonize implementation of the Directive and are expected to reduce distortions of competition in the internal market for port services and 
maritime shipping.  
6.4. Social Impacts 
The implementation of IMO provisions at EU level will deliver significant human 
health benefits. The IMO agreement may lead  to some shifts in  employment from the 
maritime sector to the land-based transport sector. The significant relative cost-
effectiveness of abatement technologies is expected to increase investment in this 
sector and to generate high-qua lity jobs. All of these effect s are part of the baseline.  
For the purposes of the impact assessment most non-baseline provi sions are expected 
to have limited additional health and em ployment effects. An exception is the 
implementation of provisions on passenger sh ips, which is additional to the IMO 
agreement. These provisions will deliver increased human health benefits. Measures improving compliance monitoring, reporting, adaptation to technical progress and 
legal clarity contribute to good governance and to public access to information. 
6.5. Administrative burden 
'Administrative burden' is defined as information obligations that are placed on 
citizens, businesses or public administra tion (excluding the EU ) by EU legislation 
and that entail financial costs. These oblig ations can be to provide, record and/or 
keep information. Following the EU guidelin es for the assessment of administrative 
burden, the obligations in the Directive we re mapped and changes resulting from the 
proposed were assessed on their significance.  The changes introduced, either in terms 
of increases or decreases in administrativ e burdens, are deemed not significant in 
relation to the existing provisions of th e Directive (the 'baseline'). Detailed 
information on this assessment can be found in Annex IX.  
 
EN  31  EN 7. MONITORING AND EVALUATION  
7.1. Indicators of progress towards meeting the objectives 
The core indicators for measuring progr ess against the general and specific 
objectives set for this policy initiative are the following: 
(1) Trends in the levels of emissions from international shipping and their associated 
contribution to air quality levels meas ured on-shore pursuant to the EU air 
quality Directives;  
(2) Application of the latest international standards by the shipping sector, their 
suppliers and public  authorities;  
(3) Effective programme of compliance veri fication based on reporting by Member 
States;  
(4) Evolution of transport patterns in shor t sea shipping and la nd-based transport;  
7.2. Outline for monitoring and evaluation planning 
The monitoring and assessment exercises wi ll be based on the reporting requirements 
of the Member States existing (and enha nced) under this and ot her Directives. In 
particular, the following issu es will be addressed: 
• Assessment of the reports provided by Me mber States on the sulphur content of 
fuel for comprehensiveness and statistical validity;   
• Monitoring of emissions and ambient ai r quality reported by Member States 
pursuant to Ambient Air Quality  Directive (2008/50/EC).  
• Eurostat reports on transport volumes and modes;  
Member States' implementation will be supported throughout the introduction and 
implementation of the revised legislat ion, including through the implementation 
committees and ad hoc expert groups where appropriate. 
8. CONCLUSION AND PREFERRED POLICY MIX 
The new international limit values for th e sulphur content of marine fuels are 
expected to significantly reduce emissions of SO 2 from the maritime sector. This will 
greatly contribute to achievi ng the general environmental objectives stated in the 
2005 Thematic Strategy on Air Pollution as well  as the specific ob jectives stated in 
the Directive. It will furthermore yield ancillary benefits in terms of reducing 
emissions of NOx and PM. Also, for the purpose of promoting compliance with existing ambient air quality limit values, a problem for several Member States facing infringement procedures, it is essential to ensure that these projected benefits materialise. The recommended options resulted in the overall policy package summarised in Table 8
.   
 
EN  32  EN Table 8: Recommended options 
Quality of marine fuels:  introduce IMO standard for the maximum sulphur content 
for vessels operating in and outside of Emission Control Areas; allow technology-
based compliance; in addition to IMO provisions, introduce 0.1% sulphur limit 
applicable for passenger ships on a regular service.  
Compliance costs and impacts on short sea shipping : clarify the use of mitigating 
measures.  
Implementation:  develop non-binding guidance followed by binding rules if 
necessary for sampling and anal ysis of fuels and reporting by Member States, clarify 
terminology.  
It is recommended that the Directive is fully aligned with the IMO rules related to 
fuel standards so as to complement the IMO regime with the monitoring and 
enforcement regime offered by EU law. In going beyond IMO provi sions, changes to 
fuel standards for passenger ships on a regular service are proposed.  
Furthermore, and while recognizing that the cost implications resulting from the new 
IMO rules are fully warranted on the basis of benefits and cost s, certain specific 
industries may face significant impacts. It is therefore also recommended that the 
Directive recognizes and promotes the use of innovative emission abatement 
technologies as an equivalent complianc e option. Such an op tion will significantly 
lower the IMO compliance cost, thus also reducing the risk that ship owners and operators will fail to comply with the new rules agreed internationally. Facilitating 
technology-based compliance will have anci llary benefits in the promotion of 
innovative solutions both within the air pol lution abatement technologies industry 
and in those sectors under the scope of the Dir ective, in line with the priorities of the 
Europe 2020 Strategy. For similar reasons, it  is recommended that the Commission 
and Member States use and, where possible or necessary, adapt existing instruments, 
to assist industry in the transition towards the new standards, notably in SECAs.    
To ensure that the monitoring and enforcem ent as currently defined in the Directive 
is rendered more effective and efficient, certain limited modifications are recommended based on the review of the state of implementation.  
The cumulative impacts of the policy pack age can be summarized as follows:  
• Full implementation of an effective mon itoring and control mechanism to reap 
the full human health and environm ental benefits of the baseline; 
• Considerable improvement of Member States performance in meeting the 
provisions in the Directives on ambien t air quality and national emission 
ceilings; 
• Positive economic and social benefits fr om stimulating innovation aimed at the 
development, production and marketing of  alternative complia nce technologies; 
• Reduction of the risk of a shift from sea- to land based transport modes; 
• Improvement of the monitoring of fuel  quality by port state controls.  
 
 
EN  33  EN Finally, it is recommended that the transpos ition of NOx and PM standards that are 
set in the future by the IMO is further c onsidered, given that air quality problems 
related to ground-level ozone and fine par ticles persist and that there are high 
benefit-cost ratios associated with such act ions. It is also reco mmended that further 
analytical work is conducted to support IMO action in this area.  
 
 
EN  34  EN ANNEX I  E XTERNAL STUDIES CONDUCTED IN SUPPORT OF THIS IMPACT ASSESSMENT  
A. Studies commissioned by the European Commission 1. Analysis of Policy Measures to Reduce Ship Emissions in the Context of the Revision of 
the National Emissions Ceilings Directive (In ternational Institute for Applied System 
Analysis –IIASA, April 2007) 
2. Technical support for European action to  reducing Greenhouse Gas Emissions from 
international maritime transport (D elft CE et all, December 2009) 
3. Greenhouse Gas Emissions for Shipping and Im plementation Guidance for the Marine 
Fuel Sulphur Directive (Delft CE et all, December 2006) 
4. Impacts On The EU Refining Industry & Ma rkets Of Imo Specifica tion Changes & Other 
Measures To Reduce The Sulphur Content Of  Certain Fuels (Purvi n and Gertz, June 
2009) 
5. Cost Benefit Analysis to Support the Imp act Assessment accompanying the revision of 
Directive 1999/32/EC on the Sulphur Conten t of certain Liquid Fuels (AEA et al., 
December 2009) 
6. COMPASS: The COMPetitiveness of Europe An Short-sea freight Shipping compared 
with road and rail transpor t (TML et al., August 2010) 
7. Market-based instruments for reduc ing air pollution (VITO, June 2010) 
8. The 0.1% sulphur in fuel requirement as fr om 1 January 2015 in SECAs – An assessment 
of available impact studies and alternativ e means of compliance (EMSA, December 2010) 
B. Studies conducted or reviewed by the European Maritime Safety Agency 
1. AEA (2009) – Cost Benefit Analysis to S upport the Impact Assessment accompanying the 
revision of Directive 1999/32/EC on the Sul phur Content of certain Liquids Fuels, 
prepared for the EU Commission.  
 2. COMPASS (2010) – The COMPetitiveness of  EuropeAN Short sea freight Shipping 
compared with road and rail transport,  performed by Transport & Mobility Leuven, 
supported by EU Commission through DG ENV. 
 3. ECSA (2010) – Analysis of the Conseque nces of Low Sulphur Fuel Requirements, 
performed by University of Antwerpen, Institute of Trans port and Maritime Management 
Antwerpen (ITMMA). 
 
4. German Shipowners ‟ Association and Association of Ge rman Seaport Operators (2010) –
Reducing the sulphur content of shipping fu els further to 0.1 % in the North Sea and 
Baltic Sea in 2015: Consequencs for shipping in this area, performed by Institute of Shipping Economics and Logistics.  
 5. Maritime Coast Guard Agency (2009) – Impact  Assessment for the revised Annex VI of 
MARPOL, performed by ENTEC. 
 
EN  35  EN  
6. Ministry of Transport and communications Finland (2009), Sulphur content in ships 
bunker fuel in 2015, A Study on the impacts of th e new IMO regulation on transportation 
costs, performed by the University of Turku, The Centre for Maritime Studies.  
 7. Shipowner association of Belgium, Finland, Germany, Holland, Sweden and UK and 
endorsed by the wider membership of EC SA and ICS (2010) – Study to Review 
Assessments Undertaken of The Revised MA RPOL Annex VI Regulations, performed by 
ENTEC. 
 8. SKEMA (2010) – Task 2 and 3 Impact Study on the future requirements of Annex VI of 
the MARPOL Convention on Short Sea Shippi ng, supported by DG TREN at the time.  
 
9. Swedish Maritime Administration (2009), Consequences of the IMO 's new marine fuel 
sulphur regulations.  
C. Other relevant studies:  
1. Miola, A. Ciuffo, B., Marra, M., Giovine, E., (2010) - Regulating Air Emissions from 
Ships: The State of the Art on Methodologi es, Technologies and Policy Options. ISBN 
978-92-79-17733-0. EUR 24602 . EC, Luxemburg  
2. Miola, A. B. Ciuffo “Estimating air emissi ons from ships: Meta-analysis of modeling 
approaches and available data sources”  Atmospheric Environment 45 (2011) 2242- 2251 
3. Miola, A ,Ciuffo, B., Marra, M., Giovine, E., (2010) “Analytical framework to regulate air 
emissions from maritime transport. EUR 24297 EN 2010ISBN 978-92-79-15308-2. EC, 
Luxemburg 
4. A.Miola, Paccagnan V, Turvani M, Massarutto A, Mannino I, Perujo  A. (2009)External 
Costs of Transportation. Case Study: Ma ritime Transport. EUR 23837 EN; ISBN: 978-92-
79-12534-8 EC, Luxemburg 
5. Miola, V. Paccagnan, V. Andreoni, A. Massa rutto, A. Perujo, M. Turvani (2008) - 
Maritime Transport – Report 1:  Review of the measurement of external costs of 
transportation in theory and practice. EU  report EUR 23714 EN ISBN 978-92-79-11279-9 
EC, Luxemburg 
6. V. Andreoni, A., Miola, A., Perujo, (2008) “C ost Effectiveness Analysis of the Emission 
Abatement in the Shipping Sector Emissi ons” EU report EUR 23715 EN - ISBN 978-92-
79-11280-5, EC, Luxemburg 
 
EN  36  EN ANNEX II I NTERNET QUESTIONAIRE  
 
An internet consultation was organised durin g the period of 29 October 2010 till 6 January 
2011. A total number of 243 responses were r eceived and analysed. Most replies were 
received from organisations ( 75%). Most of the replies originated from ship owners and 
mangers (33.6%) followed by land operators (1 1.9%) and administrations (11.1%). Hundred 
six submissions are without sector assignment ( 43%; "other"). However, it should be kept in 
mind that a considerable number of almost id entical contributions ( 67 contributions derived 
from 6 different templates) were submitted. Most  respondents (93%) indicated that they know 
the sector and the legislation rela ted to air pollution from ships.  
 The main outcome of the consulta tion can be summarised as follows: 
 
• A general support for aligning the Directive with the MARPOL Annex VI provisions on 
the sulphur content of fuel including the gl obal standard was expressed in submissions 
from all sectors. Critical views  
o referred to high costs and risk of modal backshift; 
o suggested to reopen discussion on fuel quality at IMO and 
o to first address the availab ility of the 0.1% SECA standa rd in a feasibility study; 
o expressed doubts that the current systems of port state controls is in a position to 
enforce the new fuel standards. 
• Most respondents (91%) support a harmoni zation of EU provisions on the use of 
abatement technologies with MARPOL Anne x VI. Suggestions received propose to 
o ensure additional safe guard 
o not to deviate from IMO provisions 
o regulate exhaust gas cleaning system under the Marine Equipment Directive 
o request guarantees from equipmen t manufacturers on the performance 
o ensure legal certainty (grandfather clause) 
o not restrict equivalent measur es to abatement technologies  
o harmonise regulations on trial procedures at IMO 
• A majority of respondents (85%) called for a clarification of meas ures to mitigate the 
costs of the new requirements.  
• With regard to the designation of new emi ssion control areas (ECAs) , 69% of the replies 
were in favour of supporti ng this process at IMO.  
• As regards to possible solutions for reduc ing compliance costs, a strong support was 
expressed to support ship owners willing to invest in new technology (82%), to develop 
adequate infrastructures to support the use of low emissions technologies in EU ports 
(66%, multiple answers were allowed) and to promote short sea shipping (59%). The following specific actions are summarized as follows:  
o 
Provide incentives for early adopters 
o Establish and emissions trading System 
o Ensure legal certainty (grandfather clause for installed equipment) 
o Introduce a system of emission charge s similar to the Norwegian NOx fund 
o Speed up procedure for the approval of new technologies 
o Support short sea shipping promotion centers 
o Exceptions for ships operating in arctic areas 
o Support for investment for retrofit ting of existing and for new ships 
o clarify standards for scrubber wash water discharges 
 
EN  37  EN o establish system of reception facilities 
o no fee for reception facilities 
o R&D 
o Internalise external costs of road transport 
o Widen ECAs in order to in crease economies of scale 
o Synchronise state aid in order to avoid out-flagging 
o Develop LNG infrastructure 
o Penalise non-compliant ship owners 
• The issue of dispute settlement in case the an alysis of a fuel sample raises doubts whether 
the sulphur content of a fuel complies with the legal limit was raised. A majority (64%) 
favoured provisions for dispute settlement  developed by IMO. Keeping the ISO 14596 
method was supported by 11% of the repl ies. 25% indicated "no opinion".  
• Most respondents (62%) support to aligning th e Directive with the new ISO standard on 
distillate marine fuels. One third of the replies indicated "no opinion". The question 
whether fuel quality parameters other than sulphur content should be specified in the 
Directive raised split views: About half (53%) of the replie s were against, 36% were in 
favour and 12% of "no opinion. A two third ma jority supported the updating of methods 
to measure the sulphur content of fuels, 22% were against, 13% indi cated "no opinion".  
• With regard to enforcement of the sulphur st andards of marine fuels, about one quarter 
(27%) of the replies indicated that current prac tices ensure efficient control. Two third of 
the respondents considered th at effective enforcement he lps to deliver the intended 
environmental improvements of the lower sulphur marine fuels and 43% (multiple answers were allowed) point out that harmoni zed enforcement is important for an equal 
level playing field for ports.  
• As regard to the harmonisat ion of sampling each option put forward (guidelines, binding 
rules, no action) received similar support. However, preferences varied considerable 
within the stakeholder groups: Among the ship  owners and managers, 71% considered 
that no action is necessary; whereas not a single land operator or administrator shared this view. Administrators favour guidelines (63%) and land opera tors tend towards binding 
rules (57%).  
• Most of the respondents (78%) re plied that the fuel supplier should have an obligation to 
provide fuel of the correct quality. At th e same time, 29% (multiple answers were 
allowed) considered that this should be the re sponsibility of the ship operator. Among ship 
owners this view was more pol arised (100% considered it an  obligation of the supplier, 
9% of the ship operator) whereas 46% of the land operators regarded it as an obligation 
for the ship operator and 32% as an obligation for the fuel  supplier. The replies of 
administrators were close to the overall result.  
• A clear majority (90%) of the replies called for a publicly a ccessible register of marine 
fuel suppliers.  
• The consultation did not reveal any priority on the fuel standard that should apply for 
passenger ships operating on regular service ou tside SECAs and visiti ng EU ports. Within 
the different stakeholders, a majority of 55% of ship operators considers that even the 
current sulphur limit should be deleted. Admini strators and land operators did not support 
this view. The former considered that furt her reductions of air po llution out side SECAs 
are needed (44%) or that the global standa rd should apply as of  2020 (37%). The latter 
group considered that the globa l standard should apply (46%) or is of no opinion (36%).  
• With regard to the clarification of the concep t of "regular service", 30% of the respondents 
considered a need to clarify this term. The option to appl y to cruise ships the same 
provisions as to passenge r ships on regular service was supported by 25% of the 
 
EN  38  EN respondents and 20% of the re plies suggested to exclude cruise ships from these 
provisions. "No opinion" was indicated by 25%.  
• No clear picture emerged on the clarification of the meaning of "port area". 39% of the 
respondents favour to add a definition, 34 did not  and 27% are of no opinion. Ship owners 
tend not to seek clarification (61% no, 39%  yes). Land operators favour clarification 
(46%) or have no opinion (50%). Ad ministrators have no preference.  
      
 
EN  39  EN ANNEX III  T RENDS IN EMISSIONS FROM INTERNATIONAL SHIPPING AND RELATED 
IMPACTS  
1. DEPOSITION OF SULPHUR AND ACIDIFICATION OF ECOSYSTEMS IN THE EU  
1.1. Emissions of sulphur dioxide 
The emissions of sulphur dioxide ove r the period 2000 to 2008 for the EU-27 
countries and various sea areas are shown in table 1 below  
Emissions of SO 2  in kT per year Area 
2000 2001 2002 2003 2004 2005 2006 2007 2008 
EU-27 10436 10174 9685 9206 8651 8126 7870 7331 5867 
Baltic Sea 216 221 227 233 239 245 225 205 185 
North Sea & 
English Channel 464 475 487 500 513 526 484 442 400 
Mediterranean 
Sea 1108 1137 1166 1196 1227 1259 1277 1292 1309 
Black Sea 58 59 61 62 64 65 66 66 66 
Table 1:  Emissions of SO 2 in the EU 2000-2008. Data provided by EMEP (Cooperative Programme 
for monitoring  and evaluation of the long-range transmission of air pollutants in Europe; under the 
auspices of the EMEP protocol and the Convention on Long Range Transboundary Air Pollution; 
(http://www.ceip.at/emission-data-webdab/emissions-used-in-emep-models/ )  
Over the period 2000 to 2008, emissions from  land-based sources in the EU have 
decreased by approximately 44%. Against this backdrop, emissions from sea areas 
not yet designated as SECAs such as th e Mediterranean Sea and Black Sea have 
increased over the same period by 18% and 14% respectively. However, emissions of sulphur dioxide in the Baltic Sea and No rth Sea/English Channel show substantial 
reductions following the entry into force of the first SECA in the Baltic Sea in mid-2006 and the North Sea and English Channel in mid-2007. It should be recalled that 
the ships in the Baltic Sea region may have  been using fuels with lower sulphur 
content than the global average (c.a. 2.7%) due to the operation of local schemes to 
incentivise cleaner ships, thereby lessening the apparent benefit of the mandatory use 
of fuels with a maximum permitted sulphur c ontent of 1.5% by mass. In addition, the 
estimates are based upon limited informati on about ship activity, ship location and 
limited measurements of ships' actual emissions. 
1.2. Sulphur Deposition and acidification of ecosystems 
Ecosystems vary in their sensitivity to acidifying gases and acidifying deposition 
such as sulphur and nitrogen compounds (NOx and ammonia). This sensitivity 
depends upon several factors including the so-called buffe ring capacity of soils or 
underlying geological formations. The sensitivity  is described in te rms of a critical 
load of deposition below which damage is not expected to occur. The sensitivity to sulphur is shown in the fi gure below which shows the 5t h percentile and median 
 
EN  40  EN sensitivity of ecosystems39. Critical loads are generally lower and ecosystems 
generally more sensitive in North Western Europe. 
 
Figure 1:  Sensitivity of ecosystems to sulphur deposition. Data provided by the Coordination Centre 
for Effects under the LRTAP Convention (CCE Status Report 2009).  
The total amount of sulphur deposited in the EU-27 geographic region is shown in 
the table 2 below for the period 2000 to 2008 and in figures 2 and 3 below which 
also depict the contribution from shi pping and land–based sources respectively for 
the years 2000 and 2007. 
Estimated deposition of Sulphur in kT per year Area 
2000 2001 2002 2003 2004 2005 2006 2007 2008 
EU-27 3067 3027 2894 2783 2649 2583 2515 2348 2024 
Table 2: . Deposition of sulphur in the EU. Data provided by EMEP: Transboundary air pollution by 
main pollutants (S, N, O 3) and PM in the European Union; Agnes Nyiri et al,  MSC-W 1/2010 . 
Taking account of the different scales in the figures depicting total deposition and 
that from shipping, it is cl ear that the deposition of su lphur due to shipping in the 
Southern North Sea region for example is  significant and of the order of 200–2000 
mg Sulphur(S) m-2 in the year 2000 and of the order of 200–1000 mg S m-2 in 2007. 
This compares to a total deposition from land based sources of 500–2000 mg S m-2 in 
the years 2000 and 2007 respectively. 
The GAINS integrated assessment model from the International Institute of Applied 
Systems Analysis (IIASA) has been used to estimate the evolution of ecosystem 
acidification risk up to 2020 and 203040. Using an energy projection ('2009 
PRIMES') incorporating the climate & en ergy package of measures and current 
legislation on air pollution abatement (incl uding the latest rules from the IMO on the 
                                                 
39  CCE Status Report 2009: Progress in the modelling of critical thresholds, impacts to plant species 
diversity and ecosystem services in Europe; 
http://www.pbl.nl/en/th emasites/cce/publications/040/index.html .  
40  CCE Status Report 2009: Progress in the modelling of critical thresholds, impacts to plant species 
diversity and ecosystem services in Europe; page 16. 
http://www.pbl.nl/en/th emasites/cce/publications/040/index.html .  
 
EN  41  EN sulphur content of marine fuels), future acid deposition has been calculated from 
emissions of sulphur dioxide, nitrogen oxides and ammonia.  
 
S deposition due to ships in 2000 S deposition due to ships in 2007 
 
Figure 2:  Sulphur deposition in the EU from ships. Data provided by EMEP; 
(http://www.ceip.at/emission-data-webdab/emissions-used-in-emep-models/ ).  
Total Sulphur deposition in the EU in 2000 Total Sulphur deposition  in EU in 2007 
 
  
Figure 3:  Sulphur deposition in the EU from land based sources. Data provided by EMEP; 
(http://www.ceip.at/emission-data-webdab/emissions-used-in-emep-models/ )  
In the EU27, the area at risk from acidifi cation decreases from 19% in 2000 to 5% in 
2020 and 2030. The Average Accumulated Exceedance (AAE)41 represents the 
extent to which an ecosystem critical load is exceeded and so long as this remains above zero damage is expected at some poi nt in time. The AAE for critical loads for 
acidification for the EU 27 in 2000 was dete rmined to be 105 acid equivalents per 
hectare per year (eq ha
-1 yr-1) which declines to 17 and 15 eq ha-1 yr-1 in 2020 and 
2030 respectively.  The areas with the largest exceedances in the year 2000 are in the 
                                                 
41  The Average Accumulated Exceedance (AAE) is th e area weighted average of the difference between 
deposition and the critical load. From the point of bi odiversity protection the aim is to reduce the AAE 
to zero.  
 
EN  42  EN UK, Netherlands, Germany and Poland but  these exceedance areas diminish 
substantially in 2030 with some sma ller exceedance areas remaining in the 
Netherlands and Poland 
Even where the acid deposition falls below th e critical thresholds recovery of the 
ecosystem may take many years during which time damage may still occur. Based on information provided by the Member St ates to the Convention on Long Range 
Transboundary Air Pollution (CLRTAP), damage will still occur beyond 2100 in countries such as the UK and Germany. This recovery time lag can  only be shortened 
by reducing the acid deposition (including su lphur) to levels below the critical load. 
2. PM
 AND SO2  AMBIENT AIR QUALITY  
Directive 2008/50/EC42 on ambient air quality and clean er air for Europe entered into 
force on 11 June 2008. It merged the existin g legislation into a single directive 
(except for the fourth daughter Directive) with no change to the existing air quality 
objectives including those fo r sulphur dioxide or PM 10. It did, however, introduce 
new limits and exposure-related objectiv es for fine particulate matter (PM 2.5). 
2.1. Emissions of fine particulate matter (PM2.5) 
The emissions of fine particulate matter (PM 2.5) over the period 2000 to 2008 for the 
EU-27 countries and various sea area s are shown in table 3 below.  
Emissions of PM 2.5  in kT per year Area 
2000 2001 2002 2003 2004 2005 2006 2007 2008 
EU-27 1711 1697 1634 1632 1618 1571 1528 1492 1490 
Baltic Sea 22 23 23 24 25 25 25 24 24 
North Sea & 
English Channel 50 51 52 54 55 56 55 54 54 
Mediterranean 
Sea 123 126 129 132 136 139 142 145 148 
Black Sea 6 6 7 7 7 7 7 7 7 
Table 3:  Emissions of PM 2.5 in the EU 2000-2008: Data provided by EMEP; 
(http://www.ceip.at/emission-data-webdab/emissions-used-in-emep-models/ )  
The trends in emissions of primary fine particulate matter are similar to those for 
sulphur dioxide in that emissions from la nd based sources have declined appreciably 
since 2000 (13%) whilst those in  the SECAs have shown an increase than a small 
decrease and a levelling off. Emissions in the Mediterranean Sea have been estimated 
to have increased continuous ly over the period whilst t hose from the Black sea have 
been relatively stable. 
                                                 
42  Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air 
quality and cleaner air for Europe; OJ L 152, 11.6.2998, p. 1. 
 
EN  43  EN 2.2. PM 10 concentrations 
The population weighted mean concentration of PM 10 in urban agglomerations varies 
between 27 and 31 µg/m3 for the years 2001 to 2007 with no discernable trend43. In 
2008, 288 zones in 21 Member States (out of c.a. 900 zones in total) did not comply 
with PM 10 air quality limits which formally entered into force on 1 January 2005. 
The identity of these zones has been  published and is available on the web44. Sixteen 
of the ports in Table 1 (indicated by asteri sk) are situated in air quality management 
zones where an exceedance of the daily (and most stringent) air quality limit value for PM
10 was recorded in 2007 or 2008. These include the major European ports in 
Rotterdam, Antwerp, Marseille and elsewhere.  
The Air Quality Directive creates the pos sibility to postpone  the deadline for 
compliance up until June 2011 for PM 10 based on conditions and the approval of the 
European Commission. The single most impor tant condition is that the notification 
must include an air quality plan that delivers compliance by the extended deadline. Up until December 2009, notifications concerning PM
10 had been received from 18 
Member States covering 307 air quality ma nagement zones (out of approximately 
900):   
– For around 16% of these, the Comm ission did not raise any objection 
– A further 15% or so of the zones were already in compliance whilst  
– Objections were raised for approxi mately 70% of notified zones.  
As of mid-2010, there were open infringe ment proceedings against 21 Member 
States in respect of PM 10. 
2.3. Sulphur dioxide concentrations 
There are three air quality limit values for sulphur dioxide which entered into force 
from 1 January 2005 for hourly, daily and a nnual concentrations respectively. Out of 
775 air quality zones, 9 and 11 zones respecti vely exceeded either the hourly or the 
daily (or both) limits representing about 1% of  all zones. In fact substantial decreases 
of the order of 65% have been observed in the measured concentrations of SO 2 at 
traffic-related, urban and rural sites in the period 1997 to 2007. However, as of mid-
2010, there were ongoing infringement proceedings in respect of exceedances in 5 Member States for one or both of the hourly or daily limits in respect of 
concentrations measured in the period 2005-2008. 
The annual average concentration limit for th e protection of vegetation in Directive 
2008/50/EC is set at 20µg/m
3 and is stricter than that for the protection of human 
health but nonetheless exceedances were obs erved at only 2 of the rural monitoring 
stations (although exceedances were also seen at industrial, traffic and urban stations 
which are not necessarily relevant for the protection of natural vegetation). 
                                                 
43  http://air-climate.eionet.europa.eu/docs /ETCACC_TP_2009_3_eoi2008_2007aqdata.pdf ; p. 41 
44  http://air-climate.eionet.europa.eu/report s/ETCACC_TP_2009_10_pre lim_AQQanalysis_2008   
 
EN  44  EN 3. E UTROPHICATION OF ECOSYSTEMS  
The critical load for nutrient nitrogen expresses the risk that an ecosystem will 
undergo compositional change with a loss of biodiversity following excessive deposition of reduced and oxidised forms of nitrogen. Agriculture is primarily 
responsible for most emissions of reduced  nitrogen in the EU in the form of 
ammonia whilst mobile and fixed combustion sources are responsible for emissions of nitrogen oxides (oxidised nitrogen). 
The exceedance of the 5
th percentile critical load (o f all ecosystems) for nutrient 
nitrogen is shown in Figure 4 for the year 2000 and 2020 and 2030 under a business as usual scenario. In the EU27 area, the eco system areas at risk from eutrophication 
are 74% in 2000, 56% in 2020 and 54% in 2030. In addition, the area weighted 
average of the difference between depositi on and critical loads (so-called Average 
Accumulated Exceedance) is 331 equivalents ha
-1 yr-1 in the year 2000 and estimated 
to be 152 and 1444 eq. ha-1 yr-1 in 2020 and 2030 respectively. From the point of 
view of achieving biodiversi ty protection, the AAA should be zero otherwise damage 
is expected at some point in the future. 
Figure 4: . Exceedances of the critical load for nutrient nitroge n under a business as usual scenario in the years 
2000, 2020 and 2030 (5th percentile of all ecosystems). Reproduced fr om the CCE's Status Report for 2009 under 
the auspices of the UN ECE LRTAP Convention. 
Ship emissions of nitrogen oxides contribu te significantly to the observed deposition 
of oxidised nitrogen in the EU. Figure 5 s hows the deposition due to ships and land-
based sources of oxidised nitrogen in 2008. The figure shows that ships contribute as 
much as land based sources in some part s of North Western Europe bordering the 
North Sea, Baltic Sea and English Channel. 
       
 
EN  45  EN Ship-derived deposition of oxidised nitrogen EU-27 land-based deposition 
 
  
Figure 5:  Oxidised nitrogen deposition in the EU from ships and land-based sources. Data 
provided by EMEP; ( http://www.ceip.at/emission-da ta-webdab/emissions-used-in-
emep-models/ ).  
4. G ROUND LEVEL OZONE  
4.1 Current ozone air quality 
Impacts of ozone on health ar e associated with short term  effects on the respiratory 
system, chronic disease and death. Hea lth impacts have been observed at 
concentrations as low as 70µg/m3 which is below the current guideline of the World 
Health Organization (daily 8-hour average concentration of 100 µg/m3). The 
Commission has estimated that there may be as many as 21 000 cases of premature 
death each year due to acute exposure to ozone. 
The European Environment Agency prep ares a report annually on the observed 
concentrations of ground level ozone of the previous summer. The latest report 
covers ozone levels measured in 200945 and figure 6 below shows the degree to 
which the long term objective for the protec tion of health was exceeded. The long 
term objective is expressed in terms of a concentration of ozone in air of 120 µg/m3 
expressed as the daily maximum 8-hour mean concentration.  
                                                 
45  Air pollution by ozone across Europe during summer 2009: Overview of exceedances of EC ozone threshold values for April–Sep tember 2009; EEA Technical 
Report N°2 / 2010. http://www.eea.europa.eu/publications/air-pollution-by-ozone-across-europe-during-summer-2009    
 
EN  46  EN  
Figure 6: . Exceedences of the long term objective for ozone in the EU 
Whilst EU-27 emissions of ozone precursors, weighted according to their 
contribution in ozone formation fell about 40 % in the period 1990–2005 the 
concentrations measured at rural ground- level stations during the summer months 
show atmospheric ozone concentrations rema ining largely unchange d over the period 
1997 to 2009 (and ignoring the extreme year of 2003). The constant baseline levels 
are the net result of a numb er of possible processes: 
– the increase in hemispheric background concentrations; 
– less ozone deposition during the (more frequent) dry periods during summer, 
increased ozone formation due to higher temperatures; 
– less ozone formation due to emissions reduction.  
Between the late 19th century and 1980, c oncentrations of background ozone in the 
mid-latitudes of the northern hemisphe re doubled to approximately 60–75 µg/m3 and 
have since increased to 80 µg/m3. The increase since 1980 is not fully understood but 
is thought to be due mainly to  increases in emissions from poorly regulated sectors in 
northern hemisphere countries, such as inte rnational shipping and aviation. Increased 
ozone from the stratosphere may also have contributed. The Task Force on 
Hemispheric Air Pollution (HTAP) under the Convention on Long Range Transboundary Air Pollution (LRTAP) will publish a further assessment on ozone at the end of 2010. 
It is clear that Northern hemisphere b ackground concentrations of ozone are now 
close to established levels for impacts on  health and the terrestrial environment 
raising concerns about the global impacts of ozone. Importantly, it is now believed 
that the overall impact of ozone on health is driven by the many days when ozone is 
at or slightly above backgr ound levels rather than the few days during photochemical 
episodes with very high concentrations. N° of monitoring stations with an exceedance of the long term air 
quality objective for ozone 
(120 µg/m3 as daily max 8-hour average concentration)  
0500 1000150020002500
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
yearN° of stations  Stations with an exceedance
Stations without an exccedance
 
EN  47  EN A comprehensive study conducted by the Royal Society in 200846 concluded that 
because ozone is a global pollutant, a globally coordinated approach is required (UNEP or CLRTAP) for ozone management  and that national or even regional 
controls are unlikely to achieve their policy objectives in the absence of such a global 
framework. Whilst the Royal Society report  pre-dates the 2008 agreement to amend 
MARPOL Annex VI, it recommended that  the IMO and ICAO must agree to 
regulate NOx, carbon monoxide and VOCs from  international shipping and aviation 
as far as is technically feasible, to im plement agreed emissions controls and to 
continue research into the development of emission reduction technologies in these 
sectors
47. 
 
4.2 Ozone and particles as radiative forcers 
There have been numerous articles about the linkages between air pollutants and 
climate change and how short-term climate change mitigation can be achieved by tackling some of the most potent air pol lutants. Ground level ozone (including 
methane as an important precursor) and particulate matter including "black carbon" 
are particularly relevant. These are the most significant air pollutants in terms of public health impacts but methane, ozone and black carbon also have significant 
atmospheric warming contributions (ozone is rated as the third most important greenhouse gas based on radiative forcing) . The climate co-benefits have not 
previously been recognised in developi ng air quality polic ies and may provide 
additional justification and support to propose air quality improvement measures.  
                                                
 
46  Ground-level ozone in the 21st century: future trends, impacts an d policy implications – Summary for 
policy makers, The Royal Society, October 2008, p. 9 
47  Ibid, Recommendation 7, page 103. 
 
EN  48  EN ANNEX IV – ISSUES ARISING FROM THE REVIEW OF THE DIRECTIVE  
1. INTRODUCTION  
Liquid fuels used for motorised transport,  industrial and commer cial combustion and 
domestic heating contain sulphur which is re leased upon combustion in the form of sulphur 
oxides. Primary particulate matter is also em itted during the combustion of the fuels. These 
emissions contribute to local air quality problem s (where limits exist for sulphur dioxide and 
particulate matter concentrations in ambient ai r), including in urban areas, and regional air 
pollution impacts such as the acid ification of natural ecosystems. 
Historically, the sulphur conten t of certain liquid fuels was re gulated by Directive 93/12/EC 
which placed restrictions on the marketing  of diesel fuels used in road vehicles and gas oils 
used for transport in general (but excluding aviation). The provisions  on road fuels were 
subsequently repealed and replaced  by those in Directive 98/70/EC.  
The provisions on the sulphur content of gas o ils now appear in the Directive which also 
addresses the sulphur content of land-based hea vy fuel oil and heating o il as well as marine 
fuels used both inside and outsi de of EU territorial seas.  
The current provisions on marine fuels essentially incorporate into EU law the rules from the 
IMO on marine fuels used in SOx Emission Contro l Areas (SECAs) as they were before their 
amendment in October 2008. Annex VI of the Marine Pollution Convention 73/7848 governs 
air pollution emitted by ships, operating under the auspices of the United Nations' IMO. It was adopted in 1997 and at that time included provisions establishing the Baltic Sea as a 
SECA which required fuels with no more than  1.5% by mass to be used. Outside of SECAs, 
marine fuels could contain up to 4.5% by ma ss. In 2000, an amendment to Annex VI was 
adopted by the IMO which designated the North Sea and English Channel as an additional SECA but neither was immediatel y operational because at the tim e the ratification threshold 
consisting of sufficient ratifi cations by IMO Member States and sufficient representation of 
world tonnage had not yet been met.   
In 2005, when the co-legislators amended the Directive and introduced the IMO's rules on 
marine fuels to be used in SECAs
49, the provisions of MARPOL Annex VI had still not 
entered into force. Nonetheless they were widely recognised as  being insufficient to address 
observed environmental impacts due to shippi ng and that without further action sulphur 
dioxide (SO 2) emissions from ships would continue to  grow and surpass all emissions of SO 2 
from land-based sources in the EU by 2020. These problems were acknowledged in the Commission's Communications on  a "Strategy to reduce atmospheric emissions from 
seagoing ships"
50 and "the Thematic Strategy on Air Pollution"51 both of which advocated 
further reductions in marine-based SO 2 emissions given their greater cost effectiveness 
relative to further reductions  of land-based emissions.  
                                                 
48  The International Convention for the Prevention of Pollution from ships 1973 as modified by the 
Protocol of 1978 (is commonly referred to as MARPOL 73/78) operates under the auspices of the IMO 
and contains several annexes address various forms of ship related pollution. 
49  Directive 2005/33/EC of 6 July 2005; OJ L 191, 22.7.2005, p. 59. 
50  COM(2002) 595 final 
51  COM(2005) 446 final 
 
EN  49  EN Given this background, the co-legislators called upon th e Commission when adopting 
Directive 2005/33/EC to undertake a later review of the le gal requirements on fuel sulphur 
content (and for marine fuels in particular). 
Directive 2005/33/EC represents a substantial amendment to th e parent Directive 1999/32/EC 
particularly in respect of the sulphur content of  marine fuels. Member States were obliged to 
transpose the former Directive by 11 August 2006 but only three Member States had reported 
their national transposing measures by that date. Seven Member States submitted their 
transposition information later in 2006 whilst the last Member State to transpose reported 
only in April 2010. In response to the late an d/or missing transpositions, the Commission 
initiated 16 infringement procedures, all of  which are now closed following complete 
transposition. 
Given that Directive 2005/33/EC was adopted on 6 July 2005 and published in the Official 
Journal on 22 July a transposit ion deadline of 11 August 2006 re presents a relatively short 
period within which to undertake the required transposition into national law. However, this 
short period was necessary because of the entry into force of the SECA in the Baltic Sea on 
11 August 2006 pursuant to Article 4a(2)(a) of the Directive. Transposition into national law 
always presents an administrative burden for the Member States and cannot be avoided if a 
directive is selected as the appropriate legisla tive instrument. However, a directly applicable 
regulation could be considered for future reviews of the legislation given the technical and 
precise nature of the subject matte r covered by the current Directive. 
2. COMPLIANCE AND MONITORING , REPORTING AND VERIFICATION ISSUES  
Evidence of non-compliance Studies conducted by EMSA found evidence of  non-compliance with several provisions of 
the Directive: 
EMSA assessed the level of compliance based on Lloyds Register and Det Norske Veritas
52 
data on the sulphur content of different fuels co vered by the Directive. The data covers some 
50 EU ports and 15,000 fuel samples. The sulphur content of the fuels was measured 
according to method of analysis ISO 8754. These studies have shown that: 
- residual fuel oil - Article 4a of the current Directive stipulates that fuels with a sulphur 
content in excess of 1.5% by mass cannot be used  in SECAs. 4.1% to 9.2% of samples taken 
in 2008 of residual fuel oil bought as being 1.5% su lphur content (for use in SECAs) were in 
fact non-compliant. However, three-fifths of these non-compliant samples were within the 
margins of error associated with th e specific method of analysis (ISO); 
- marine gas oil - Article 4b(3) of the current Directive stipulates that from 1 January 2008 
marine gas oil cannot be used if it has a sulphur content in  excess of 0.1% by mass. Samples 
taken in 2008 had sulphur c ontent in excess of 0.1% in between 19.5% and 25.5% of the 
cases. From 2010 equivalent stipulations  have applied to marine gas oils placed on the market  
and all marine fuels used while a ship is at berth in an EU port; 
                                                 
52   Lloyds Register and Det Norske Veritas are private international classification societies responsible for 
defining and maintaining shipping standards.  
 
EN  50  EN - fuels used by passenger ships– Article 4a(3) re quires passenger ships entering or leaving any 
EU ports (i.e., even in non-SECA s) on a regular service to use a fuel with a sulphur content 
below 1.5% by mass. This requirement has applied since 11 August 2006. Samples obtained 
between that date and 27 April 2008 were often in excess of the legal requirement (except in 
France and parts of Spain). The relatively low nu mber of ships controlled only allows to see 
this as a strong indication. In some cases th e sulphur content of passenger ship fuels was 
between 2.3% and 3.3%. The fact that both the sample analysed  and the bunker delivery notes 
showed exceedances, suggests a lack of knowle dge of the Directive by both operators and 
competent authorities. 
2.1. Issues related to enforcement and the ro bustness of the testing and analysis 
A concern raised by bunker fuel suppliers  and ship owners is the statistical 
interpretation of the result of the analysis of a fuel sample.  
EN ISO 4259 states that "most la boratories do not ca rry out more than one test on each 
sample for routine quality control purposes, […]". According to this standard, a given 
test result X and a fuel sulphur li mit A is interpreted as follows: 
– A supplier can be certain with 95% confidence that the fuel respects  the limit if 
X < (A – 0.59R) where R is the reproducibility of the specific test method used to measure the sulphur content and which is specified in each test method. A result 
between A and (A- 0.59R) is not proof of non-compliance; 
– A recipient can be certain with  95% confidence that the fuel fails
 the relevant 
sulphur limit if X > (A +0.59R) where R is again the repr oducibility of the 
specific test method. 
The Directive refers to several possible te st methods each with its own reproducibility 
which varies with the sulphur content as  shown below according to the maximum 
permitted sulphur content. 
Marine Fuels and Heavy Fuel Oil 
Test Method/ Max 
Fuel sulphur level  Reproducibility A + 0.59R A – 0.59R 
ISO 8754:2003  
1.5% 0.134 1.58% 1.42%  
1.0% 0.093 1.05%  0.94%  
0.5% 0.053 0.55%  0.45%  
0.1% 0.020 0.12%  0.09%  
EN ISO 14596:2007  
1.5% 0.04 1.52%  1.48%  
1.0% 0.04 1.02%  0.98%  
0.5% 0.02  0.52%  0.49%  
0.1% 0.02 0.12%  0.09%   
Table 1:  Uncertainty limits related to the measurement of the sulphur content of marine fuels . 
 
EN  51  EN According to the IMO standard53, two sub-samples of a given fuel sample are tested in 
succession. If the results of test are within th e repeatability of a test method, the results 
are considered as valid. In the next step, an average of the two results is calculated and 
if this average is equal to or falls below the applicable limit required by the Directive, the fuel oil is deemed to meet the requirements.  
Example: A passenger ship on regular service th at is obliged to use fuel with a sulphur 
content not higher than 1.50% or ders fuel. A fuel sample is  taken and is analysed in 
accordance with ISO 8754. (1) According to IS O 4259 one analysis is carried out and 
the test result indicates 1.58% sulphur cont ent. Such a result is deemed acceptable 
within the 95% confidence interval. (2) According to the IMO method, two 
subsamples are analysed. A test resu lt of 1.42% and 1.58% sulphur content, 
respectively, results in an  average of 1.50% and is considered to meet the 
requirements.  
There is thus a grey area where the measur ed sulphur content lies in between the two 
values of (A+ 0.59R) and (A – 0.59R) where co mpliance with the standard in the IMO 
rules or EU legislation is uncertain. Argua bly, a purchaser should insist on a measured 
sulphur content of less than (A – 0.59R) in  any contract for the purchase of marine 
fuel. Member State regulatory authorities will probably wish to be sure of a non-
compliance before acting and therefore will  probably want to see measured fuel 
sulphur levels in excess of  (A + 0.59R) before acting. The recommended test method 
for sulphur measurement in ISO 8217:2010 on ma rine fuel quality stipulates the ISO 
8754 method from 2003 whereas the Directive permits this and an alternative method 
EN ISO 14596 which generally has lower uncertainty. 
Additional issues have arisen  relating to the location and frequency of sampling for the 
verification of compliance in respect of the requirements of national law and the 
burden of proof to secure a conviction. Thes e issues are a matter for the member State 
competent authorities who best understand the requirements of national law and what 
should be done to ensure successful prosecution of non-co mpliance offences. It must 
be remembered that the Member States have an obligation unde r the Directive to 
implement a system of penalties that is  effective, dissuasive and proportionate. 
2.2. Compliance with marine fuel sulphur limits: statistical analysis by EMSA 
The European Maritime Safety Agency has assisted the Commission in assessing the 
degree of compliance by ship operators with  the various marine fuel sulphur limits. 
EMSA has secured access to anonymised an alyses conducted by Lloyds Register and 
Det Norske Veritas of the fuel samples sent  to them by ship operators following fuel 
purchases. EMSA was provided with monthly statistical data on sulphur levels of 
heavy fuel oils (RFO), marine diesel oils and marine gas oils bunkered on board ships and placed on the market in  the EU. This captu red some 50 European ports and 15,000 
fuel samples (approximately 600 samples pe r month) where the sulphur content was 
tested according to the method ISO 8754 developed by the International Standards Organisation.  
                                                
 
53 Appendix VI of MARPOL Annex VI 
 
EN  52  EN 2.2.1.  Residual Fuel oil 
EMSA found that only a small number of bu nker deliveries in the EU had sulphur 
levels in excess of the permitted 1.5% for fuels intended to be used in SECAs. The monthly degree of non-compliance in 2008 ranged from 4.1% to 9.2% of samples 
tested. However, three fifths of the non-co mpliant samples had sulphur levels within 
the uncertainty range of the test method (1.58%). 
2.2.2.  Marine gas oil 
Pursuant to Article 4b(3), marine gas oils cannot be placed on the market in the EU if 
their sulphur content exceeds 0.1%. The m onthly amount of "off-spec" samples of 
marine gas oils in 2008 varied between 19.5% and 25.5%. This indicates that there 
may be an ongoing contravention with the requ irements of the Dir ective in respect of 
marine gas oils which needs to be verified with samples taken in 2010 following the entry into force of the EU's legal provisions on 1 January 2010. 
2.2.3.  Fuels used by passenger ships entering or leaving EU ports 
Pursuant to Article 4a(4) of the Directive,  operators of passenger vessels on regular 
services to or from EU ports must us e fuels with a maximum permitted sulphur 
content of 1.5% by mass. This obligati on has applied since 11 August 2006. EMSA 
selected 8 different routes for analysis c overing the main Southern European ferry 
routes covering a period 11 August 2006 to  27 April 2008. The fuel  sulphur results 
obtained by EMSA demonstrate that except in  the case of France and parts of Spain, 
the overwhelming majority of fuel samp les contained sulphur in excess of 1.5%. 
Moreover, in several areas the average fuel sulphur values based on either the Bunker 
Delivery Note or the fuel su lphur analysis were in the range of 2.3 to 3.3%. Based on 
these results, EMSA concluded that ferry companies, fuel suppliers and regulatory 
authorities are not well informed of the prevailing legal requirements. 
2.3. Non-Compliance with the requirement to use 0.1% sulphur fuels whilst at berth 
Article 4b of the Directive requires ships at  berth in EU ports to use fuels with a 
sulphur content not exceeding 0.1% by mass as from 1 January 2010. This obligation 
was brought into force in 2005 when the co -legislators adopted Directive 2005/33/EC 
at second reading. 
In order to comply, certain ships had to modi fy their on-board boilers so as to be able 
to burn marine distillates safely
54. The necessary adaptation is in most cases 
technically uncomplicated and retrofit k its are provided by boiler manufacturers. 
Whilst ship operators had five years or so to prepare for the entry into force of this new obligation many ships did not undertak e the necessary modification to their 
boilers in good time thereby creating a larg e demand on the boiler manufacturers just 
before the 1 January 2010 deadline. 
Whilst recognising the potential safety hazard the Commission does not have the 
general authority to delay the legal requirements of  the Directive. Moreover, the 
Member States are still oblig ed to enforce the requirements of the Directive. A short 
                                                
 
54  Distillate fuels have a lower flash point and can present an explosion risk in a boiler which has not 
undergone the necessary adaptation. 
 
EN  53  EN term solution was found whereby the Commission recommended55 to the Member 
States' competent authorities to take into account the positive actions taken by a 
particular ship operator to ensure its compliance when enforcing the Directive's provisions. So that, for example, an ope rator that had signed a contract for the 
technical modification to its boilers but whic h had to wait for the retrofit to be carried 
could be treated more leniently than a sh ip that had taken no preparatory measures. 
Some ships are able to use liquefied natural gas (LNG) as part or for all a ship's fuel 
needs. LNG contains no sulphur and so its use provides an alternative means to comply with the 0.1% fuel sulphur requi rement as does the use of shore side 
electricity. The Commission has adopted guide lines on the use of LNG in respect of 
compliance with Article 4b of the Directive
56 and a recommendation on the use of 
shore side electricity57. 
As noted earlier, ships are required to use fuels with a maxim sulphur content of 0.1% 
whilst at berth in EU ports. This regula tion entered into forc e on 1 January 2010 and 
the Commission does not yet have any offici al information on compliance with this 
provision as the Member States are not obliged to re port until mid-2011. Include 
reference COSS/MS first impressions? 
However, DNV fuel quality testing serv ices (DNVPS) has undertaken a customer 
survey in relation to this and the entry into force of the IMO's new SECA regulation on fuel sulphur content (1.00% max from 1 July 2010)
58. According to DNVPS, when 
the previous SECA regulations came into force imposing a limit of 1.5% sulphur for 
marine fuels, DNVPS' sulphur test resu lts showed that ev en by early 2010, around 
10% of all samples of RFO had an  associated Bunker Delivery Note59 certifying a 
sulphur content less than 1.50% sulphur but  where the sulphur content was greater 
than 1.50% when tested. This is an appa rent improvement from the position in 2008 
which showed around 17.5% of those samples tested were over the 1.50% limit 
certified in the Bunker Delivery Note. DNVPS' testing of the sulphur content of fuels 
used at berth has shown a higher proportion of results under the limit (0.1%) than for 
fuels used in SECAs. Apparently, only a few port areas show systematic potential 
non-compliance. Fuel availabil ity was reported to  be an issue in some ports, although 
generally for 0.1% gas oil, the larger por ts have products available. DNVPS reports 
that specially made residual fuel oil (1.00%  low sulphur RFO) is generally not being 
delivered but that the market is trying to adapt to the 1 July 2 010 change from 1.5% to 
1.00% in SECAs. 
One of the survey's findings regarding Port  State controls was that many ports had 
already begun to verify compliance with th e Directive, with additional smaller ports 
                                                 
55  Commission Recommendation on the use of low sulphur fuels at berth in Community ports; OJ L 348, 
29.12.2009, p. 73. http://eurlex.europa.eu/LexUriServ/LexUriS erv.do?uri=OJ:L:2009:348:0073:0074:EN:PDF
  
56  2010/769/EU 
57  Commission Recommendation on the promotion of shore-side electricity for use by ships at berth in 
Community ports; OJ L 125, 12.5.2006, p. 38.  
http://eur-lex.europa.eu/LexUriServ/site/e n/oj/2006/l_125/l_12520060512en00380042.pdf   
58  Experience with low sulphur in European Ports, dated 25 June 2010.: 
http://www.dnv.co.uk/industry/maritime/publicationsanddownloads/publications/dnvbullkcarrierupdate/
2010/1_2010/ExperiencewithlowsulphurinEuropeanports.asp   
59  IMO rules requires a marine fuel supplier to provide a Bunker Delivery Note with every purchase of 
marine fuels. This BDN must indicate the maximum su lphur content of the fuel delivered and be kept 
by the master of the ship for possible inspection  by port state and flag state authorities. 
 
EN  54  EN starting to verify. An important signal for those customers that might be checked in 
the future was that 15% of the gas oil bunker samples tested had a sulphur value above 
the limit of 0.10% which is higher than  indicated by DNVPS' testing. However, no 
one in the DNVPS' study had been fined, delayed or banned from ports for non-
compliance with the 0.1% sulphur require ments whilst at berth in EU ports. 
2.4. Annual reports on the quality of marine fuels 
2.4.1.  Reporting requirements 
Pursuant to Article 7.1 of the Directive, Member States  must report annually to the 
Commission information on the sampling and analyses conducted pursuant to 
Article 6 for the purpo se of (i) ensuring that the su lphur content of marine fuels 
complies with the relevant provisions in Articles 4a and 4b; and (ii) that the sulphur content of heavy fuel oil used in land base d installations complies with Article 3; and 
(iii) that the sulphur content of ga s oil complies with Article 4.   
Article 6 describes the types of sampling, an alysis and inspections  that should be 
performed to ensure compliance, i.e.: sampling and analysis of marine fuels  for on-
board combustion while being delivered to ships  […] and contained in tanks or 
bunkers  […], as well as inspections of ship's log books and bunker delivery notes . 
Samples are to be taken with a sufficient fr equency and for sufficient quantities so that 
they produce representative re sults for the fuels used by vessels steaming in the 
relevant waters and ports. Sampling of mari ne fuels should commence as of the date 
on which the relevant maximum permitted sulphur content value enters into force (see table below).
60  For fuels used in SECAs this date was 11 August 2006 (Baltic Sea) 
and 11 August 2007 (North Sea and English Channel) and for 0.1% sulphur fuels used whilst at berth in EU ports the date was 1 January 2010. 
2.4.2.  Overview of Member State reports 
The Commission received 26 re ports covering the calendar year 2007, the first full 
calendar year following the transposition d eadline for Directive 2005/33/EC. For the 
year 2008, 25 reports were r eceived 13 of which came after the reporting deadline. 
Pending the decision to launch infringement pr ocedures, a series of reminders were 
sent between 2008 and 2010. 
2.4.3.  Conclusions drawn on the basis of  the Member States' reports 
Member State reports submitted to the Comm ission pursuant to Article 7 have been 
analysed on an annual basis by the Commission assisted by the European Maritime Safety Agency (EMSA). Analysis has s hown that reports received from Member 
States vary significantly in structure and content with many reports exhibiting 
significant information gaps making assessmen t difficult. The most important issues 
would appear to be: 
– Few reports distinguish betw een sampling and results related to fuels for marine 
use and similar fuels used in land based installations; 
                                                
 
60  Note that the sampling, analysis, and inspection provisions for specifications contained in international 
legislation are not covered by this Directive or EU legislation. 
 
EN  55  EN – the number of samples taken and sampling frequency in the EU are very low and 
are insufficient to ensure that samples are representative of the fuels used and sold 
and that the Directive is  correctly implemented; 
– Sampling and analysis were almost excl usively used to monitor the sulphur 
content of fuels covered by the Directive whereas Article 7.1 specifically requests 
monitoring of other maritime fuels not dire ctly covered by the Directive (i.e. fuels 
having to comply with the gl obal limit for sulphur of 4.5%); 
2.5. Safety issues related  to fuel quality  
Whilst it is difficult to obtain clear statis tics, there seems to be a relatively high 
incidence of engine failures linked to fuel  quality, particularly in SECA areas. In 
order to produce SECA compliant fuels ther e has been a greater tendency to blend 
different fuel grades.  
The greater the degree of blending the greate r the possibility that the resultant mix 
could be unstable and leadi ng to sludge formation and bl ocked fuel pumps. Creating 
blends with lower sulphur content may furthermore be increasing the level of 
"catfines" consisting of aluminium silicates used in fluidised cat alytic cracking units 
at oil refineries. This may be due to an increased use of cycle oils61 as "cutter" stock 
in the fuel blend 
In 2010, the International Standards Orga nisation (ISO) finalised a revision to 
ISO 8217 on marine fuel quality standards.  This revision lowers the permitted 
amount of aluminium silicates ("catfines") and the sludge limits. It remains to be 
seen whether these limits will be respected  by suppliers once pur chasers ensure that 
the new standard is routinely inserted into their fuel supply contra cts. At the current 
time, all issues regarding fuel quality and liability are determined by the contract 
between supplier and purchaser. Ultimately, there may be a role for establishing a 
mandatory fuel quality standard for marine  fuels placed on the market in the EU as 
this would permit intervention by public author ities in the Member States to ensure 
compliant fuel quality. 
2.6. Issues related to interpretation difficulties  and associated implementation issues 
The text of the Directive itself has led to  confusion when it comes to distinguishing 
between marine gas oil and marine diesel oil.  The origin of this is that the Directive 
has introduced an "or" between viscosity a nd density which suggests that only one of 
the two is determinative wher eas the ISO Fuel Standard 8217  requires both criteria to 
be satisfied.  
Another difficulty encountered by competen t authorities is the precision of the 
various sulphur limits specified in the Dire ctive. The sulphur limit for fuel used by 
ships at berth is specified to one decima l place whereas article 4, now only covering 
gas oil used on land, refers to a sulphur c ontent of 0.10% (i.e. 2 decimal places) and 
article 4b on the use and placing on the mark et of marine gas oi l refers to 0.1%. All 
sulphur limits in MARPOL Annex VI are i ndicated with 2 decimal places and it is 
probably sensible to align the Directive with ANNEX VI. 
                                                 
61  Cycle oils are a low sulphur, highly viscous refinery product from the FCC process and which tends to 
contain an elevated amount of catfines 
 
EN  56  EN The meaning of "port" has also raised uncer tainty in relation to the requirement to 
use marine fuels with a maximum permitted su lphur content of 0.1%. This is relevant 
as ships at anchorage are also covered by th is article if they are inside a community 
port. It is up to the Member States to decide  what is considered to belong to the port 
area. Many will use the definition as provide d by Article 11 of the United Nations 
Convention on the Law Of the Sea (UNCLOS). 
2.7. Trials and the use of new abatement technologies 
The provision in Article 4c of the Dir ective on trials and use of new emission 
abatement technologies has been subject to  discussion, both with Member States and 
with industry. The requirement to notif y the Commission and Member States 6 
months in advance and the limitation of the trial period to 18 months have been considered as burdensome thus leading to  only a few uses of that possibility.  
2.7.1.  Scrubber technologies  
Scrubber technologies, however, have clear ly advanced since the adoption of 
Directive 2005/33/EC. There are now se veral manufacturers that can supply 
scrubbers
62 that meet approval of Class63 or Recognized Organization64 and the 
IMO's guidelines on scrubbers which set out criteria for the disc harge water (a by-
product of scrubber operation). 
There is an important difference between the provisions in MA RPOL Annex VI and 
the Directive regarding mon itoring of exhaust emissions. The former allows both for 
type approval of scrubbers and/or for continuous mon itoring of emissions but the 
Directive always  requires on-board equipment for continuous monitoring of 
emissions.  
Industry has claimed that the stricter provisions of the Di rective might be a potential 
impediment to the installation of scrubbe rs because of the additional cost of 
monitoring sensors.  
2.7.2.  Other equivalent technologies  
In May 2010, by means of committee pr ocedure, a Commission Decision was 
adopted based on Article 4c to approve the use of a dual fuel system for LNG 
carriers as means to comply with the require ment in article 4b on the use of fuel with 
a sulphur content not exceeding 0.1% for ships at berth. However, LNG carriers 
often use a mixture of sulphur free LNG and heavy fuel oil with a relative high 
concentration of sulphur. The Commission De cision allows for such a mixture to be 
used provided the overall emissions are equal to or lower than would be the case with 
using fuel containing 0.1% sulphur65.  
                                                 
62  Communications by both EGCSA and EMEC 
63  A Classification Society or a non-governmental ship inspection and survey organization 
64  Ship inspection and survey organizations  as referred to in Directive 94/57/EC 
65  (2010/769/EU  
 
EN  57  EN This decision significantly reduces compliance costs for LNG carriers as it can be 
deployed without modifications to the ship s' boilers which might cost well over 1 
million Euros66. 
2.8. Fuel used by passenger ships on regu lar service to or from EU ports  
Article 4a(4) of the Directive requires passe nger ships on regular services to or from 
EU ports to use fuel with a maximum permitted sulphur content of 1.5% by mass. This obligation applies irrespective of th e fact whether the passenger ship operates 
inside of an established SECA  albeit  the 1.5% fuel sul phur level was established so 
as to be the same as that previously re quired by all ships opera ting within a SECA.  
For passenger ships operating in SECAs (Eng lish Chanel, the North Sea or the Baltic 
Sea) the obligation to use fuels with a ma ximum sulphur content of 1.5% will be 
superseded by the new IMO rules on the su lphur content of ma rine fuels whereby 
(all) ships operating in SECAs will need to  use fuel with a maximum sulphur content 
of 0.10% from 2015 onwards. Hence, there wi ll be no additional cost incurred due to 
the Article 4a(4) provisions in the Directive 
At present, Article 4a(4) continues to apply, however,  for passenger ships operating 
to or from EU ports outside of SECA areas such as the Mediterranean Sea. Hence, the Directive did impose additional cost s as reported in this section.   
Passenger ships, including RoRo vessels a nd Ferries (but excl uding cruise ships), 
contribute to air pollution in the Mediterranean Sea as indicated in table 2 below. The 
data base did not contain separate inform ation on cruise ships.  The emissions from 
cruise ships are expected to  be significantly lower than  those from passenger ships. 
Pollutant Emissions in 2010 (kT per year) 
SO 2 88.56 
NMVOC 3.61 
CO 9.45 
PM 4.58 
NOx 112.35 
Table 2:  The estimated emission from passenger ships, excluding cruise ships, in the Mediterranean 
Sea for 2010, based on extrapolation of emissions from 2000 data. 
Assuming the total amount of fuel used by passenger ships in the Mediterranean Sea 
area is 2.953 million tonnes and that the price premium between residual fuel oil containing 1.5% sulphur and 2.7% (observed on  average outside of SECAs) is of the 
order of € 20 per tonne of fuel then the co st effectiveness of th e sulphur abated can 
be determined as shown in table 3 below. Additional fuel costs would amount to approximately €59 million and abated em issions would be around 70 900 tonnes of 
SO
2 giving a cost-effectiveness of €830 per tonne of SO 2 abated. 
The incremental cost estimates depend upon th e fuel price premium selected for the 
calculations. ENTEC UK has also determined the cost -effectiveness of sulphur 
emissions that are abated from ship s by using desulphurisation technology 
(scrubbers). For new ships the cost effec tiveness is between €320 – 390 per tonne of 
SO 2 abated whilst for retrofitting existing sh ips, the cost-effectiveness is between 
€500 – 580 per tonne abated for larg e and small ships respectively. 
                                                 
66  AEA report 
 
EN  58  EN Fuel consumed 
(tonnes) Fuel sulphur content 
(%) SO 2 released on 
combustion 
(tonnes) Fuel costs increase with 
+€20/tonne premium (k€) 
2953000 2.70 159,462 - 
2953000 1.50 88,590 59,060 
Cost effectiveness 
 Emissions abated (tonnes SO 2) 70,872 
 Cost effectiveness (€/tonne SO 2) 833 
Table 3:  Cost effectiveness of reduced emissions of sulphur dioxide from passenger ships operating in 
the Mediterranean Sea using 1.5% sulphur fuel instead of RFO containing 2.7% sulphur. 
The cost effectiveness of measures to re duce sulphur from ships are of the same 
order of magnitude as th e least expensive measures available to reduce SO 2 
emissions from last based s ources as shown below for the case of Germany in respect 
of a 2020 end point. 
Marginal Abatement cost  in €/t onne of SO2 abated for Germany (2020)
01000200030004000500060007000800090001000011000120001300014000150001600017000180001900020000
305 310 315 320 325 330 335 340
Emissions remaining (kT)€/tonne SO2 abated
 
Figure 1:.  Cost curve for the abatement of sulphur dioxide emissions in Germany in 2020. Data 
generated by the GAINS integrated assessment model from IIASA using the Primes 2009 energy 
baseline from January 201067. 
In addition, the emission of PM was estimated a 4.58 kton. Assuming that the 
majority of passenger ships uses medium  speed engines, the PM emission when 
using fuel with 1.5% sulphur is 1.787 kg/ton and when using 2.7% fuel 2.596 per 
ton. So if ships would still have used fu el containing 2.7% sul phur, than the total 
emission of PM would have been 6.65 kt on, an increase of 2.07kton representing an 
additional annual reduction of damage of €1,2 million.  
3. CONCLUSIONS  
The analysis of Member State reports indicat es that on the whole there is insufficient 
monitoring undertaken of fuel sulphur levels for the fuels covered by the Directive. It 
is difficult to be sure that fuel suppliers a nd users are ensuring that fuels comply with 
                                                 
67  http://gains.iiasa.ac.at/index.php/gains-europe   
 
EN  59  EN the requirements of the Directive and this is borne out in reports on fuel quality 
published by third parties such as fuel quality monitoring laboratories. As such the Directive's aims to protect the environment and health, and to ensure safety and fair competition in the shipping industry are compromised. Possible solutions to tackle this issue include: 
– More fuel sulphur monitoring and fuel qua lity monitoring should be undertaken to 
assess compliance against the requiremen ts of the Direc tive and ISO 8217 on 
marine fuel quality particularly in relation to (i) the placing on the market of marine gas oils (sulphur content less than 0.1%); (i i) fuels used by passenger 
vessels travelling to and from EU ports (s ulphur content less th an 1.5%); and (iii) 
ship safety related to fuel-induced engine failure. 
– A Commission Recommendation on harmonized guidelines for sampling and 
inspections accompanied by harmonized fo rmats for reporting to the Commission; 
– Development of a CEN technical standard  for monitoring and reporting as has 
been done for road fuels; 
– Infringement proceedings against those Me mber States that undertake insufficient 
monitoring and inspection; 
– Ultimately, if these approaches do not work the Commission could propose 
detailed legislation on monitoring and reporting based upon technical advice from 
EMSA and or other studies. 
In relation to fuel parameters indirectly  linked to sulphur a nd which may influence 
engine operation and engine failure, there ma y ultimately be a need to guarantee that 
marine fuels placed on the market actual ly conform to the r ecognised international 
standards.  
Where the bunker supplier is at fault, the fuel purchaser may only have recourse to 
private (contract) law in the absence of any public law/statutory requirements on the 
quality of marine fuels placed  on the market in the EU.  
 
EN  60  EN ANNEX V –CRITERIA FOR NEW EMISSION CONTROL AREAS68 
 
                                                 
68  Full text of the 2008 MARPOL Annex VI: 
 http://www.imo.org/OurWork/Environment/PollutionP revention/AirPollution/Documents/23-Add-1.pdf  
 
 
EN  61  EN  
  
 
 
 
EN  62  EN ANNEX VI  BENEFITS AND COSTS RELATED TO THE NEW RULES ON SULPHUR CONTENT OF 
MARINE FUELS ADOPTED BY IMO PARTIES IN 2008   
Several studies were initia ted by the Commission to look at the additional costs and 
benefits of moving to the fuel sulphur requirements promulgated by the IMO. These 
have looked at the costs of  additional refinery proces sing requirements, increased 
emissions of CO 2 as well as the likely price of sulphur complia nt fuel. In addition, 
some air quality benefits have been moneti zed whilst other benefits have also been 
identified qualitatively. 
1. ESTIMATED BENEFITS FROM MOVING TO LOWER SULPHUR FUELS  
There are also significant health, environm ental and operational be nefits of moving 
to lower sulphur marine fuels. The new fu el standard will not only reduce sulphur, 
but will in parallel also reduce emissions  of fine particles and other pollutant 
emissions associated with the combustion of  petroleum derived fuels. In addition, use 
of a distillate fuel is likely to increase of new engines69 and thus contribute to 
higher safety and reduced risk of accidents and oil spills at sea. Old engines might 
require modifications to enable r unning on low sulphur fuels permanently. 
A study conducted by AEAt70 estimated that the benefits associated with the use of 
0.1% sulphur marine fuels are between twi ce and 26 times the costs as shown in the 
table below. The lower bound for the costs represents the costs for fitting scrubbers to reduce SO
2 emissions whilst the upper bound re presents the high estimate using 
only low sulphur fuels to reduce SO 2 emissions.  The range for the benefits is based 
on the use of the value of a life year (low er bound) or the valu e of statistical life 
(upper bound) to value premature mortality  from exposure to particulate matter. 
Costs and benefits in 2015 
(€billions)   Baltic Sea , North Sea and 
the English Channel as SECAs  
Costs Low 0.6 
 High 3.7 
Benefits71 Low72 8 
 High 16 
Table 1:  Annual costs versus th e annual benefits of using fuel no t exceeding 0.10% sulphur compared 
to the base case (1.5%). 
                                                 
69  Final Report of the Cross Government / Industry Scientific Group of Experts, IMO, December 2007, 
page 68 
70  Cost Benefit Analysis to Au pport the Impact Assessment accompan ying the revision of Directive 
1999/32/EC on the Sul phur Content of certain Liquid Fuels, AEA, December 2009  
71  NB the monetised benefits presen ted are underestimates of the full benefits. Benefits arising from 
positive effects on other receptors including ecosystems, agriculture and buildings including cultural 
heritage are not included.. 
72  The lower bound figures are seen as less robust than the upper bound figures. The lower figures are 
based on value of life-years lost (VOLY) monetised costs produced under the New Energy Externalities 
Developments for Sustainability (NEEDS) Project. The results of this work have not been peer-
reviewed. 
 
EN  63  EN Further analysis was undertaken to assess the effect of furthe r uncertainties on the 
balance of costs and benefits.  This found that the probability of benefit exceeding 
cost can be described as virtually cer tain, using terminology developed by the 
Intergovernmental Panel on Climate Cha nge (IPCC). The probabilities calculated 
here are quantified only against benefits for improved health. The inclusion of impacts to materials (including cultural he ritage) and ecosystems, in particular, 
would add to the benefits and further increas e the already certainty that the benefits 
exceed the costs. 
The benefits are clearly dominated by the reduction of emissions of fine particles. 
There are two factors contributing to the reduction of particul ate matter emissions. 
The cleaner fuel will reduce the primary emissions of particles and reduce SOx emissions which in turn reduce the formati on of secondary aersol such as sulphate 
particles. The AEAt study assumed particul ate matter emissions from 0.1% residual 
fuel oil to be 54% below thos e associated with 1.5% residual  fuel oil. In the case of 
0.10% marine gas oil, particulate matter emissions are 90% lower
73. Measurements 
(figure 1) resulted in co mparable reduction levels74. 
 
Figure 1:   Relation between the sulphur content in fuel and PM mass (Reproduced by kind permission 
of Germanischer Lloyd) 
If scrubbers are used, the reductions of particulate matter can be reduced by 0 to 
85%75. US EPA mentions an example reducing 80%76. 
Several studies have looked into the conse quences but none of them as extensive as 
the AEAt study. 
The AEAt study77 assumes the cost (€0.9 – 4 billion)  to be higher than the benefits 
(€0.33 – 0.8 billion). However, the study itself clarifies the benefits are underestimated for several reasons. Most impor tantly, as only the benefits to the UK 
                                                
 
73  AEA December 2009, page 87 
74  Schiffsemissionen Partikelminderung durch Schwefelgrenzwerte, Dipl. Ing. Claus Kurok, Schiff  Hafen 
September 2009 
75  AEA December 2009, page 63 
76  http://www.epa.gov/region1/eco/diese l/sp-vessels.html#SeaWaterScrubber   
77  Impact Assessment for the revised Annex VI of MARPOL, ENTEC on behalf of UK Maritime and 
Coast Guard Agency, July 2009 
 
EN  64  EN are quantified, it concludes that most of th e benefits will be outside UK due to the 
prevailing western winds. 
A study from the Antwerp University78 quantified external costs of some transport 
corridors including costs additional road transport. However, it seems as if no increase of overall transport is foreseen. This combined whit the assumption that the 
same number of ships would sail but with (far) less cargo heavily influences the 
outcome. The benefits have not been calcu lated like in the studies mentioned above 
but a fixed price per tonne abated emission is assumed. The prices used seem quite 
unbalanced as for PM from shipping in th e North Sea a value of €8210 per tonne is 
used whereas PM emissions in Belgium and the Netherlands from road transport are valued at €180,000 per tonne. However, for the Thematic Strate gy on Air Pollution, 
very different figures have been used
79: €28,000 per tonne PM2.5 for the North Sea 
and for Belgium and the Netherlands respectively €61,000 and €63,000. As PM emissions dominate the benefits  to health, the difference in assumptions is likely to 
influence the outcome. 
If only quantifying total emissions due to modal shift
80, the conclusion is that in all 
cases where cargo moves from ship to road this would be accompanied by an overall 
reduction in air pollutant emissions due to  the lower emissions of SOx, NOx and PM 
per tonne km.  
2. QUANTIFYING THE COST INCREASE OF LOWER SULPHUR FUELS  
A ship operator has two means with which to  comply with the new sulphur emission 
requirements. The first involves the inst allation of on-board sulphur emissions 
abatement technology or to use lower sulphu r marine fuels. The costs of abatement 
technology can be substantially lower th an using cleaner fuels (see below). 
Low sulphur fuel will come at a signifi cant cost because additional refinery 
processing will be required to deliver larg e quantities of marine fuel containing less 
than 1% sulphur and ultimately less than 0.1%. More specifically, additional 
investment will be required to convert resi dual ("heavy") fuel oil to distillate fuels 
like marine gas oil which will be needed for compliance with the 0.10% maximum 
permitted sulphur content coming into force in 2015. Marine gas oil is less dense, less viscous but more expensive to produ ce than residual fuel oil. Additional 
production costs at refineries will ultimately be passed on to fuel users in the form of 
higher prices.  
On the 1
st June 2010, the price of IFO 380 was $417 per tonne whilst that of marine 
gas oil was $646 per tonne representing a diffe rence of 55%. The magnitude of this 
difference has been routinely observed over several years as seen from Figure 1 and 
                                                 
78  Analysis of the Consequences of Low Sulphur Fuel Requirements, University of Antwerp and 
Transport and Mobility Leuven, commissioned by ECSA 
79  Damage per tonne emission of PM2.5, NH3,  SO2, NOx and VOC from each EU25 Member State 
(excluding Cyprus) and surrounding seas, March 2005 
80  Impact Study on the future requirements of Annex VI of the MARPOL Convention on Short Sea 
Shipping, SKEMA, June 2010 
 
EN  65  EN is consistent with the estimated increased  refinery costs of converting RFO with 
1.5% sulphur content to ma rine gas oil with 0.1%81.  
2.1. Impacts on EU fuel producers (refiners) 
The impact on EU refineries has been assessed by analysing a maximum impact 
scenario by assuming that ships would not reduce their fuel consumption, use other 
fuels or abatement equipment. The invest ments necessary to upgrade EU refineries 
would increase by $13.2 billion above the $19.1 billion already envisaged as part of 
the business as usual situation assuming no fu rther change to fuel standards for ships 
and a need to comply with the EU refined product demand as forecast in December 2008
82. This additional investment would allow the refineries to convert heavy fuel 
oil into lighter products amongst which diesel  oils suitable for use by the shipping 
industry. Alternatively, refiners could impor t distillate products to satisfy demand in 
the EU. However, the EU is currently already a net importer of distillate fuels due to the high demand for road diesel and avia tion fuel and a net exporter of motor 
gasoline. 
Additional conversion of residual fuel o il components to distillates will require 
additional processing and energy use at the refinery which will result in additional 
carbon dioxide (CO
2) emissions. These have been esti mated at nearly 7 Megatonnes 
per annum. This represents an increase of  around 5% in current total carbon dioxide 
emissions from EU refineries. The overall increase is somewhat mitigated due to the 
reduction in utilisation of Fluid Catalytic Cr acker or FCC units. In addition, part of 
the additional CO 2 emissions will be off-set during use on the ship, thanks to the 
lower carbon intensity of the fuel and becau se pre-heating of residual fuel oil will no 
longer be necessary in the ship's fuel  system as will pre-treatment of fuel83. 
The increase in annual operating costs for EU refineries related to the additional CO 2 
emissions has been estimated in the range  of €170 million per year to €520 million 
per year based on CO 2 emission allowance costs ranging between €25 and €75 per 
tonne. This represents an increase in un it operating costs in th e range $0.04 to $0.13 
per barrel equivalent or between  1% and 4% of operating costs84. 
Additional processing of residual fuel oil has been undertaken for many years 
because of the price premium placed on dist illate fuels and the new fuel sulphur 
requirements are likely to accelerate this process.    
2.2. Estimated cost increase for ship operators 
The resulting cost increase for ship ope rators will depend on many factors. The 
relative importance of the fuel price diffe rs between cargoes and is highly dependent 
on the crude oil price. Currently, fuel co sts can be assumed to be between 10% 
                                                 
81  Impacts on the EU refining industry & markets of IMO specification changes and other measures to 
reduce the sulphur content of certain liquid fuels: Final report prepared for the European Commission 
by Pervin & Gertz 30 June 2009 
82  Pervin & Gertz 30 June 2009, page 74 
83  Final Report of the Cross Government / Industry Scientific Group of Experts, IMO, December 2007, 
page 68 and 155 
84  Purvin & Gertz 30 June 2009, page 11 
 
EN  66  EN (RoPax) and 47% (LoLo or short distan ce container carriers) of the overall 
operational costs for short sea shippers  and up to 60% for container vessels85. 
Assuming a fuel price increase of 65% (m iddle estimate of the Purvin & Gertz 
analysis), the operational costs would increase by between 6.5% and 24% for short 
sea shipping and by 40% for ce rtain container lines. In ab solute terms, the increased 
transport costs would be between €2 and €11 per tonne (depending on type of ship 
and cargo) and €2 per passenge r travelling from Sweden to Finland (assuming crude 
oil price of $100 per barrel)86. These costs increases assume no technological 
alternatives (such as stack ga s scrubbing) and as such that  ship owners would not try 
to mitigate against increased fuel prices  which seems unlikely given, for example, 
the efforts of the global container industry to reduce fuel consumption in response to 
recent high fuel prices. The Purvin and Gertz figures should be seen as a 'worst case 
scenario'. There are several ways in which an operator can reduce the additional costs 
including: 
– The use of sulphur abatement equipment in order to reach an equivalent emissions 
performance as provided by low sulphur fuels. This will reduce the additional 
costs by about 80% whilst there will be co sts and issues to be addressed in 
relation to the operation of such equipment such as waste disposal87; 
– The use of Liquefied Natural Gas will reduce fuel costs by 20% relative to the use 
of marine gas oil and has as an additiona l advantage in terms of reduced emissions 
of other pollutants such as NOx, fine particles and CO 2. This not only gives 
additional benefits for health and envir onment, it can also give additional cost 
savings for ships calling at Norwegian or Swedish ports where port dues and fairway dues incentivise better environmental performance 
– Measures to reduce fuel consumption. Th e most obvious way is to reduce speed. 
According to Maersk, a 20% speed reduction results in a reduction of 40% in fuel 
consumption for container ships. Accord ing to a presentation given by TT-line, 
their high speed RoPax (25 knots) consumes  50% more fuel than a similar size 
vessel operating at 18.5 knots. Therefor e, speed reduction has been observed 
widely during the recent financial crisis and period of elevated fuel prices. Maersk 
for example managed in response to high fu el prices in 2008, to  reduce the energy 
intensity of containers it transported in 2008 by 15% compared to the previous 
year
88. 
– Other technical and operational measures to reduce fuel cons umption. A study on 
policy measures to reduce green house gas emissions89 derived a marginal CO 2 
abatement cost curve for the Maritime Transport Sector for 2030. This curve displays the overall costs and savings re lative to normal operational costs. For a 
bunker fuel price of US$ 700/tonne (interes t rate 9%), the abatement measures 
                                                
 
85  The Competitiveness of European Short sea freight  Shipping compared with road and rail transport, 
Transport and Mobility Leuven, August 2010 
86  Consequences of the IMO's new marine fuel sulphur regulations, Swedish Maritime Administration, 
May 2009 
87  Cost Benefit Analysis to Au pport the Impact Assessment accompan ying the revision of Directive 
1999/32/EC on the Su lphur Content of certain Liqui d Fuels, AEA, December 2009 
88  Maersk, Annual report 2008 
89  Technical support for European action to reduc ing Greenhouse Gas Emissions from international 
maritime transport, CE De lft, December 2009, page 13 and 260 and following  
 
EN  67  EN considered could maximally reduce the total 2030 fuel consumption by on 
average 33 % (min/max 27-47%). The largest part , 31%, would be measures that 
have negative marginal abatement cost s (so the savings would outweigh the 
additional costs). Should the fuel pr ice go up from US$ 700/tonne to US$ 
1,050/tonne, the cost effectiv e reduction potent ial would increase from on average 
33% to 36 %. So it is clear that as fuel cost s increase the number of cost effective 
options to improve fuel economy also increases. 
2.3. Impact of the IMO 2008 agreement on modal share 
From 2015, the maximum permitted sulphur content of marine fuels that can be used 
in SECAs will be 0.10% compared to 1.00% cu rrently. The expected increase in fuel 
costs that will accompany this change has raised concerns by transport users and businesses particularly in the Baltic Sea region about the impact of increased 
transport costs on local businesses and on short sea shipping in particular. 
Whilst a policy exists to encourage short sea shipping, a general aim of the EU's 
transport policy has been to ensure that the transport costs for all transport modes 
fully reflect relevant externalities such as air pollution. With this in mind, in 2008, the Commission presented Communications  on the "greening of transport"
90 and a 
strategy to internalise the external costs of transport91. These principles have been 
reconfirmed in the 2011 White Paper on Transport92. Furthermore, in 2008, the 
Commission presented a pr oposal to amend the "E urovignette" Directive93 so as to 
permit the Member States to incorporate a financial element related to air pollution, noise and congestion into road tolls for heavy goods vehicles. Such charges would 
nonetheless remain optional. Whilst the Eur opean Parliament has adopted its first 
reading resolution, the Council has so far not  managed to reach political agreement 
on this proposal. 
Beyond this strategy on intern alisation, one must expect that different modes like 
short sea shipping and road haulage can and should compete with each other (where 
this is possible). Short sea shipping will f ace stronger competition from road freight 
transport as a result of increased marine  fuel costs due to operations in a SECA 
despite the fact that road fuels are heavily  taxed (unlike marine fuels). In 2007, road 
fuel was more than three times as expensive as heavy fuel oil and twice as expensive as marine gas oil (chapter 2.5). So also if ships shift to use of MGO, road fuel will 
remain significantly more expensive
94. 
Besides competition with road, short sea sh ips will also experience competition from 
rail and deep sea shipping. 
                                                 
90  COM(2008) 433 : "Greening Transport" 
91  COM(2008) 435 : "Strategy for the internalisation of external costs" 
92  White Paper: Roadmap to a Single European Transport Area – Towards a competitive and resource 
efficient transport system, COM(2011) 144, 28.3.2011 
93  COM(2008) 436 : proposal for a directive of the EP and of the Council amending Directive 1999/62/EC 
on the charging of heavy goods vehicles for the use of certain infrastructures. 
94  Member State taxation must comply with a minimum rate of 302 Euro per 1000 litre for diesel oil but in 
most Member States the figures is between €400 and €600 per 1000 litre (ref: http://www.energy.eu/  )).  
 
EN  68  EN Several studies assess the pot ential impacts on short sea sh ipping. These studies have 
each taken different assumptions and scope  which unavoidably leads to differences 
in the overall impacts on the modal shift. 
None of these reports assume that ships ta ke measures to reduce fuel consumption. 
Yet, an increased fuel price will make  a number of operational and technical 
measures to reduce fuel consumption cost effective (see further explanation in paragraph 4.2.3.). So the real fuel co st increase is likely to be less. 
In all studies the oil price is  seen independent of the cargo volumes to be transported. 
It is likely that a high o il price will only materialize in case of strong economic 
growth, with strong incr ease in cargo volumes. 
One study aimed at assessing the competitiv eness of several types of (short sea) 
shipping
95. It calculated the impact of several policy measures and concluded that the 
main impact comes from the fuel requirement in SECAs as of 2015 and to a lesser extend potential future measures to redu ce greenhouse gas emissions and designation 
of NOx Emission Control Areas. 
This study assumed that compliance with the MARPOL regulation is obtained by the 
use of low sulphur fuel – as most expensiv e scenario for shippi ng. In addition, it only 
focussed on those lines which are susceptible for modal shift. 
 
 
Table 1:  Modal share of the SSS option and change of modal share  
Including all measures combined, by 2025 the maximum change of modal share 
calculated ranges from -1% for Ropax Small to -7% for LoLo ships. These resulting 
modal shifts are fairly limited, especially not ing that it is considered a "worst case 
scenario". 
Compared to the other studies, the oil pric e for 2025 (taken from iTREN) is relative 
low. On the other hand, the maximum m odal shift is predicted for the longer 
distances and the study has, by taking an  average speed of 60 km/h for trucks 
regardless of driving time legislation, clear ly underestimated road  costs for longer 
distances. So the competitive position of shipping will be better than assumed in this report. 
Another study done for the European Commission
96 quantified a number of 
parameters that will influence costs of maritime and road transport and how that 
                                                 
95  TML, August 2010 
96  Impact Study on the future requirements of Annex VI of the MARPOL Convention on Short Sea 
Shipping, SKEMA, June 2010 
 
EN  69  EN could translate into change of transport modes for some selected freight corridors 
where a choice exists between routes with more, less or no ship transport. Whereas the scope of the report does not allow to dr aw conclusions on an overall modal shift, 
the study gives insight in consequences of different policy instruments or scenarios. 
The impact of introducing MARPOL A nnex VI was found the most important 
potential cost increase for short sea shi pping whereas a decrease in truck driver 
salary would have a similar impact by d ecreasing road freight costs. The study found 
that the vulnerability for mode shift on th e same transport corridor with different 
choices of road/ship transport could be very  different. Shipping lines with a relatively 
high fuel consumption seem to be influenced most. Even it the SECA standard for sulphur in fuel would have been set at 0.50%, still a clear impac t on mode shift is 
observed, be it less than with 0.10%. Wh ere scrubbers are assumed to be 
implemented by ship operators, the compliance costs are obviously much reduced and the study concluded that there will be al most no risk of modal shift in such cases. 
The study assessing the additional fuel  costs for ships visiting Finnish
 ports97 
assumes maximum 30 to 50% increase in sh ipping freight charges but again does not 
quantify potential modal shift.  
The study focussing on Sweden98 assumes oil prices per barrel of $60, $100 and 
$150, resulting in mgo prices per tonne of $662, $1158 and $1650 respectively. The resulting reduction in the share of ship s is assessed at -2%, -7% and -10%, 
respectively, resulting especially in the mi ddle scenario in a remarkable increase in 
rail transport (+8%). This study is the on ly one to also incl ude impact on rail 
transport. 
The report does not reveal if and how the oil price scenarios are translated into prices 
for road and rail transport, nor if other costs increases have been taken into account. 
Assuming the middle scenario, the cost per tonne per voyage would increase between 
€2 and €10 (depending on type of ship and car go). Per passenger the costs increase 
for a ferry from Stockholm to Turku (Finland) would be about €2. 
The study done on behalf of the ECSA
 (European Community Shipowner 
Association)99 predicts significant shift towards road transport (3 to 50%) whereas 
the use of fuel containing 0.5% sulphur woul d not lead to any m odal shift at all. 
Therefore, the future SECA standard is believed to counteract an important portion 
of the benefits. The potential mode shif t is however far higher than assessed in 
studies mentioned above which might be in fluenced by a number of  assumptions that 
are not clear or questionable: 
(1) In is not clear how the oil price increas es are included in truck costs or how 
other legislation (like Euro VI) is in cluded. The average speed for trucks 
seems optimistic: 90km/h on highw ays, 75km/h on other roads. 
                                                 
97  Sulphur content in ship bunker fuel in 2015, Ministry of Transport and Communications, Finland, April 
2009 
98  Consequences of IMO's new marine fuel sulphur regulations, Swedish Maritime Administration, May 
2009 
99  Analysis of the Consequences of Low Sulphur Fuel Requirements, Universiteit Antwerpen and TML; 
commissioned by ECSA, January 2010 
 
EN  70  EN (2) It is not clear how capacity of other transport m odes is taken into account and 
whether indeed certain changes would be feasible at all. 
(3) The total amount of freight  transport is assumed to  be stable and certain 
percentage of modal shift is assumed to result in the same number of ships carrying less cargo, which will impact on the freight charge. However, as 
trade and certainly container trade is e xpected to increase, even a relative loss 
in market share could still be an increase in absolute terms. 
(4) The assumed price for fuel containing 0.50% sulphur is underestimated as 
unlike assumed in the report, it would be a distillate fuel. Basing the future price on historical figures leads to furt her underestimation as before there was 
no legal requirement so no price premium for this fuel. 
So in summary, it is clear that with the introduction of the 2015 emission 
requirements, short sea shipping will experience increased costs and competition from road, rail and deep sea shipping. This will impact especially those shipping lines that already today are least competitive, for example due to a relatively high fuel consumption. Based on the information available today, it seems however that 
the impacts are not as imposing as suggested by the industry. At the same time, given 
the large range in predictions, there is a clear level of uncertainty to what might happen and the European Commission will therefore be keeping a close eye on the consequences and look for solutions in case of disproportional impacts. 
2.4. Potential impact on trade 
The choice as to where goods are sourced ge ographically will depe nd on the relative 
cost difference between similar products (f rom different locations) to which transport 
costs may contribute. It is clear that the imp act of an increase in transport costs will 
be small for goods transported by containers  due to the relatively high value of goods 
transported. So the cargoes most at risk of enhanced competition are rather the 
relatively low value goods transported by bulk carriers. For industries in the Nordic 
region the most relevant products include paper pulp and iron ore. 
The assessment of the potential impact on European imports and exports (especially 
regarding to trade in low va lue goods) showed that with ECAs as they are now, the 
sailing to and from European ports from/to  other continents b ecomes only marginally 
more expensive. While this leaves Short S ea Shipping at a risk of losing activity to 
more fuel efficient Deep Sea Vessels making extra stops, other aspects than explicit 
costs (flexibility, opportunity costs, load factors) will likely temper this effect. 
Hence, it is not expected that changes in entry/exit points or shifts in modal balance 
(SSS to land) will take place. Given the marg inal cost increase of maritime transport 
and the marginal share of maritime transport cost in end user prices, the new legislation will cause negligible cost in crease to end user prices of national 
consumption
100. 
An independent consultant assessed the pr ice increase for goods transported from the 
middle of the Baltic Sea to the Englis h Channel at $2 per tonne for bulk goods 
(relative to the fuel price of September 2009). This is consistent with a Swedish 
                                                 
100  TML, August 2010 
 
EN  71  EN report assessing the price increas e at €2 to €9 for containers101. Relative to price 
fluctuations of iron or paper pulp, this increase is limited.  
2.5. Miscellaneous concerns  
Some concerns have been raised on whethe r ship engines can cope with low sulphur 
fuel which is less lubricating. However, several communications from both engine 
manufacturers and lubricating oil manufactur ers indicate that this should not be an 
issue. More over the revised ISO 8217: 2010 specification for marine fuels now 
contains minimum lubricity requirements. 
A more widespread concern will be the availability of compliant fuel when the new 
sulphur limits enter into force. As on th e first of January 2015 the sulphur limits of 
fuels used by ships passing through SECA s will reduce significantly by a factor of 
ten from 1% to 0.1% by mass. It can not be excluded that there might be problems 
regarding universal fuel availa bility in all ports. However, as the amount of fuel used 
in SECAs is only a few percent of the total amount this is likely to be a temporary problem and the situation is not  significantly different to previous changes in marine 
fuel sulphur requirements. Indeed, give n that the USA and Canada have also 
introduced SECA's covering a 200 mile z one contiguous with the USA/Canadian 
coastline it is more likely that geogra phically balanced availability of SECA 
compliant fuel will be seen in practice. 
                                                
 
101  Swedish Maritime Administration (2009), Consequences of the IMO's new marine fuel sulphur 
regulations  
 
EN  72  EN ANNEX VII T RENDS IN ACTIVITY , FUEL QUALITY AND PRICES , AND MODAL SPLIT 
1. TRENDS RELATED TO THE USE OF MARITIME FUELS  
1.1. Maritime and port activity 
Table 1 shows the total freight traffic for major EU ports ranked in order of 
increasing traffic (bulk and c ontainer cargoes) in millions of tonnes per annum. Most 
of the top 25 busiest ports below have  shown consistent growth in the 2000–2007 
period whilst the financial cr isis has affected traffic in 2008 although the degree is 
mixed with some ports actually having ex perienced continued growth such as 
Amsterdam, Bremerhaven, Antwerp and Rotterdam. 
Port   Member
State 2000 2005 2006 2007 2008 % 
change 
07-08 
Rotterdam** NL 302.545 345.819 353.576 374.152 384.210 2.7 
Antwerpen** BE 116.003 145.835 151.705 165.512 171.237 3.5 
Hamburg DE 76.950 108.253 115.529 118.190 118.915 0.6 
Marseille** FR 91.279 93.308 96.527 92.561 92.523 0.0 
Le Havre** FR 63.885 70.801 69.973 73.897 75.636 2.4 
Amsterdam** NL 42.044 47.133 56.794 62.516 74.366 19.0 
Grimsby & 
Immingham UK 52.501 60.686 64.033 66.279 65.267 -1.5 
Algeciras** ES   55.184 60.023 62.128 61.869 -0.4 
London** UK 47.892 53.843 51.911 52.739 52.965 0.4 
Dunkerque** FR 44.318 48.503 50.386 50.244 50.464 0.4 
Valencia** ES 21.958 34.990 40.742 45.935 50.182 9.2 
Taranto** IT 33.117 47.869 50.871 49.240 49.522 0.6 
Bremerhaven DE 24.835 33.728 40.350 43.618 48.956 12.2 
Genova** IT 43.797 42.640 44.425 48.358 46.469 -3.9 
Constantza** RO  44.377 42.888 44.916 45.750 1.9 
Tees & Hartlepool UK 51.472 55.790 53.348 49.779 45.436 -8.7 
Göteborg SE 33.261 36.479 39.912 40.353 42.331 4.9 
Barcelona** ES 25.787 37.061 38.267 41.040 41.516 1.2 
Southampton** UK 34.773 39.947 40.556 43.815 40.974 -6.5 
Wilhelmshaven DE 43.402 45.977 43.106 42.643 40.556 -4.9 
Forth UK 41.143 34.218 31.556 36.681 39.054 6.5 
Trieste** IT 44.015 43.355 44.644 39.833 37.195 -6.6 
Bilbao** ES 26.623 32.219 36.118 37.313 36.862 -1.2 
Milford Haven UK 33.768 37.547 34.307 35.496 35.875 1.1 
Zeebrugge** BE 32.660 28.442 32.763 34.843 34.768 -0.2 
Table 1: Freight traffic (bulk and container) in Mtonnes at major EU ports 2000 to 2008. Data taken 
from 'EU Energy and Transport in figures, statistical pocket book 2010.** signifies a port situated in 
an air quality management  zone that experienced an exceedance of  the daily air qua lity limit value for 
particulate matter PM 10  in 2007 or 2008  (see section 2). 
In the period 2005-2007 container traffic at th e largest EU ports gr ew substantially so 
that in the top 25 ports listed below in Tabl e 2 only 4 experienced growth lower than 
10% during the period whilst at Zeebrugge a change of 74% was recorded. The financial crisis affected traffic in several ports whilst for some growth continued strongly. 
 
EN  73  EN Port Member
State 2005 2006 2007 2008 % 
change
07/08 
Rotterdam NL 9,194.6 9,575.4 10,773.4 10,631.0 -1.3 
Hamburg DE 8,084.3 8,878.1 9,913.5 9,767.3 -1.5 
Antwerpen BE 6,220.9 6,718.2 7,878.9 8,378.9 6.3 
Bremerhaven DE 3,696.1 4,479.3 4,884.0 5,451.4 11.6 
Valencia ES 2,415.0 2,614.8 3,048.9 3,606.3 18.3 
Algeciras ES 3,183.1 3,262.5 3,419.9 3,297.6 -3.6 
Gioia Tauro IT 3,123.2 2,835.2 3,464.2 3,164.8 -8.6 
Felixstowe UK 2,759.7 3,029.8 3,342.3 3,131.4 -6.3 
Barcelona ES 2,071.3 2,314.6 2,605.6 2,564.5 -1.6 
Le Havre FR 2,144.3 2,118.9 2,684.7 2,511.6 -6.4 
Southampton UK 1,384.2 1,502.3 1,905.2 1,616.8 -15.1 
Genova IT 1,037.6 1,145.7 1,229.6 1,461.9 18.9 
Constantza RO 867.0 1,170.4 1,444.7 1,405.3 -2.7 
Zeebrugge BE 682.3 895.5 1,191.0 1,400.8 17.6 
Las Palmas, Gran Canaria ES 1,209.7 1,291.1 1,309.8 1,302.5 -0.6 
La Spezia IT 915.6 1,086.5 1,130.1 1,185.9 4.9 
London UK 765.1 742.6 857.8 983.5 14.7 
Marseille FR 910.6 950.2 1,058.5 901.4 -14.8 
Bilbao ES 861.5 898.7 956.1 894.1 -6.5 
Göteborg SE 771.7 811.8 840.9 863.9 2.7 
Medway UK 702.9 594.3 514.5 767.6 49.2 
Dublin IE 590.2 680.7 744.2 676.5 -9.1 
Liverpool UK 613.1 613.4 675.7 673.9 -0.3 
Kotka FI 376.5 460.6 576.5 627.1 8.8 
Gdynia PL 392.9 458.7 611.9 610.9 -0.2 
Table 2 : Container traffic in 1000 TEU at major EU ports 2005 to 2008. Data taken from 'EU Energy 
and Transport in figures, statistical pocket book 2010.  
Whilst there has been an overall increase in freight activity at EU ports, this growth 
is dominated by a shift towards containerise d freight. This has implications for the 
relative modal shares of seaborne versus road transport within the EU given that 
products transported by container are generally of a hi gher value and relatively less 
affected by increased transports costs (such as those potentially caused by a 
requirement for lower sulphur fuels).  
1.2. Trends in the sulphur content of marine fuels 
The IMO has established a monitoring pr ogramme which reports on the sulphur 
content of marine fuels sold globally. The information is provided by third party organisations involved in analysing fuel qua lity on behalf of fuel purchasers. The 
monitoring programme reports annually and results are available since 1999102. 
However, the average fuel sulphur level ha s been determined by averaging each fuel 
sulphur measurement but not taking into accoun t the quantity (mass) of fuel that the 
sample represents. In 2009, 106,503 samples of residual fuel oil were tested (associated with 94,323,860 tonnes of RFO bunkered) with an average sulphur content (not mass weighted) of 2.35% m/m. As  shown in Table 3 below, this figure 
has declined significantly since 2006 because  of the introduction of SECA-compliant 
fuels and the more frequent testing of such fuels by fuel purchasers. 
Year Corresponding quantity of Number of Samples Tonnes per Average 
                                                 
102  MEPC 61/4 "sulphur monitoring for 2009": Paper prepared by the IMO secretariat and submitted to the 
61st session of the Marine Environment Protection Committee of 16 February 2010.  
 
EN  74  EN residual fuel oil (tonnes) tested bunkering sulphur content
1999 47,000,000  53,000 886 2.7% 
2000 49,000,000  54,000 907 2.7% 
2001 56,000,000 62,000 903 2.7% 
2002 59,000,000  63,000 936 2.6% 
2003 67,395,141 66,958 1006 2.7% 
2004 74,408,066  66,312 1122 2.7% 
2005 82,436,438  79,592 1035 2.7% 
2006 86,857,565  86,117 1008 2.59% 
2007 92,757,373  97,172 954 2.42% 
2008 97,600,555  106,925 913 2.37% 
2009 94,323,860  106,503  886 2.35%  
Table 3: Average sulphur content of residual fuel oil from 1999 to 2009 based on the number of 
samples tested (i.e. not weighted by mass of residual fuel oil)  
The average sulphur content based solely on the average of sulphur measurements is 
not representative of the actual fuel use d. For example, when the average sulphur 
content of residual fuel oi l in 2009 is weighted by th e mass of fuel bunkered the 
average sulphur content is 2.60% as repor ted by the IMO rather than 2.35% based on 
the simple average of fuel sulphur meas urements. Having recognised this weakness 
in its fuel quality testing guidelines, the IMO intends to ensure that fuel sulphur 
monitoring data is mass weighted in future years.  
1.3. Marine fuel prices 
There are three broad categories of ma rine fuel which are covered by the 
international ISO standard ISO 8217 all of which are generally exempt from taxation. 
The first category of marine fuel is re ferred to as "residual fuel oil (RFO)", 
"intermediate fuel oil (IFO)"  or "heavy fuel oil (HFO)" and is characterised by its 
dark colour, high boiling point and high viscosit y such that heating is required before 
it can be pumped to a ship's engines. Di fferent grades of residual fuel oil are 
identified by their specific  viscosity in centistokes. IFO 380 is a mix of (heavy) 
residual oil and some (light) di stillate oil. The fuel used in SECAs is typically a low 
sulphur IFO. 
The second category is the lightest marine  fuel, known as marine gas oil (MGO) 
which is a middle distillate fuel and has properties similar to heating fuel and road 
diesel. Currently, this fuel is only allowed to be placed on the market in the EU if its 
sulphur content does not exceed 0.1%. The thir d category covers marine diesel oils 
(MDO) which are heavier distillate fuels and in practice are made from blending 
light distillate fuels together with RFO components. There is no legal requirement 
related to the use of this quality of fuel  but MDO is currently only allowed to be 
placed on the market (sold) in the EU if it contains no more than 1.5% sulphur by 
mass. 
The evolution in the spot price of the th ree categories of marine fuel since 2004 is 
depicted in Figure 1 below. Unsurprisingly, this shows that marine gas oil is more 
expensive than residual fuel oils by about  $150-200 per tonne but that this difference 
has been smaller since 2008. There is little difference in price between high and low 
 
EN  75  EN sulphur residual fuel oils. Price informa tion for low sulphur RFO is only available 
from 2006 when the requirements for the first SECA in the Baltic Sea formally entered into force thereby creating a demand fo r this fuel. The entry into force of the 
second SECA in the North Sea and Englis h Channel in August 2007 seems not to 
have had any significant impact on marine  fuel prices. The price of all refined 
products is heavily influenced by the price of crude oil which exhibited a sharp rise in 2008 where crude prices rose to $125 per barrel. Any price increase effect from 
the lowering of the sulphur content of MGO from 1 January 2008 (from 0.2% to 
0.1%) in the EU is probably masked by the changes in the crude price. 
Price Evolution of Maritime Fuels from 2004 to mid-2010
0200400600800100012001400
14/01/2004 28/05/2005 10/10/2006 22/02/2008 06/07/2009 18/11/2010YearPrice [USD]IFO380
MGO
LS380
Figure 1:  Monthly average prices for high sulphur IFO380, low sulphur (1.50%) IFO380 and MGO 
in Rotterdam from 1 October 2004 to 15 June 2010. Data provided by Bunkerworld. 
The US Energy Information Administration has produced energy forecasts for the 
consumption and prices of energy products  including transportation fuels such as 
residual fuel oil103.  Figure 2 shows the predicted e volution of the price of RFO out 
until 2035 for a "reference" case and low and high sensitivity cases.  RFO prices are predicted to be fairly static over the ne xt 10 years or so in the reference case. 
                                                
 
103  http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2010).pdf   
 
EN  76  EN Price evolution of Residual Fuel Oil
0200400600800100012001400
2005 2010 2015 2020 2025 2030 2035 2040
Year2008 $ per tonneLow
Reference
High
Figure 2:  Predicted price evolution of residual fuel oil in 2008 $ per tonne. Data taken from the 
Annual Energy Outlook 2010 of the US Energy Information Administration. 
1.4. Trends in modal share of freight transport 
During the period 2000-2008 tota l freight transport in th e EU-27 increased by 2.0% 
per annum whilst those for road, sea and ra il increased at 2.7%, 1.7% and 1.2% per 
annum respectively (see table below). 
EU-27 Freight 
transport in 
Billion tonne-km Road Rail inland 
waterways pipelines sea Air Total 
1995 1289 386 122 115 1146 2 3060 
1996 1303 392 120 119 1160 2.1 3096.1 
1997 1352 410 128 118 1193 2.2 3203.2 
1998 1414 393 131 125 1232 2.3 3297.3 
1999 1470 384 129 124 1268 2.3 3377.3 
2000 1519 404 134 127 1314 2.5 3500.5 
2001 1556 386 133 133 1334 2.5 3544.5 
2002 1606 384 133 128 1355 2.4 3608.4 
2003 1625 392 124 130 1378 2.4 3651.4 
2004 1747 416 137 132 1427 2.5 3861.5 
2005 1800 414 139 136 1461 2.6 3952.6 
2006 1854 440 138 135 1505 2.7 4074.7 
2007 1915 453 147 127 1532 2.8 4176.8 
2008 1878 443 145 124 1498 2.7 4090.7 
Table 4 : . Freight transport demand in  the EU 1995-2008. Data from statistic al pocketbook 2010. 
 
 
EN  77  EN ANNEX VIII – CURRENT AND POTENTIAL FUTURE SUPPORT MEASURES THAT COULD BE 
USED  FOR THE IMPLEMENTATION OF MARPOL ANNEX VI.  
1. INTRODUCTION  
 
The introduction of the new environmental sta ndards on sulphur emissi ons is expected to 
entail changes of a technical and operational nature in the shipping business as well as in 
upstream and downstream industries. Accordingl y, the Commission will further examine the 
possible impacts namely on shipping and especial ly in the Short Sea Shipping (SSS) sector. 
On one hand  impacts might result from hi gher costs due by the use of low sulphur bunker 
fuels. In this context, cost developments will be monitored in order to propose well informed policy responses to avoid possible distortions in  the logistics chain and modal backshift from 
sea to land. On the other hand, making use of  the equivalent compliance methods would 
require investments for the retro-fitting or newbuilding of ships, which would also often require additional operational efforts, both on-boa rd and on-shore. Especially a switch to the 
use of LNG or LPG will need adequate infra structure and superstructure to support the 
implementation of the technology.  The European Commission's proposal is intended to be both flexible and neutral as regards 
the way in which compliance with the new limits  can be achieved, leaving the choice of the 
most appropriate technology to the operators. Nevertheless, compliance needs to be achieved 
on time and at the scale required while minimi sing any possible unwante d collateral effects. 
To this end, a number of short-term accomp anying measures are being considered by the 
Commission to seek solutions for minimizing the compliance costs.  
The following text discusses support measures to address the imminent challenges for the 
shipping sector relating to copi ng with the effects of the extr a costs induced by actions to 
improve its environmental pe rformance, by reducing the
 SO x emissions from ships as foreseen 
in the revision of Directive 1999/32. 
In Chapter 3 it describes possible international m easures to avoid trade distortions and finally 
it presents the Commission’s considerations on an  additional set of measur es to address, from 
a broader perspective, the environmental impact of shippi ng in the medium and longer term. 
In this respect, a "sustainable waterborne transport toolbox" coul d assist the sector to improve 
its environmental performance while maintaining its competitive position. This multi-dimensional policy approach would explore m easures such as: hard and soft regulatory 
measures, green ship technology and alterna tive fuels, adequate green infrastructure, 
economic and funding instruments, research and innovation, internatio nal cooperation, etc. 
These measures will be put in place followi ng the adoption of the Roadmap to a Single 
European Transport Area - White Paper on Competitive and Sustainable Transport System
104, 
and the new TEN-T Policy and Guidelines, and will require further assessment and validation 
with the stakeholders.  
                                                
 
104   Commission White Paper – Roadmap to a Single European Transport Area – Towards a competitive and 
resource efficient transport system, COM(2011) 144 of 28.3.2011 
 
EN  78  EN 2. SHORT TERM MEASURES TO SUPPORT THE IMPLEMENTATION OF NEW SULPHUR 
LIMITS  
2.1. EU Instruments 
a) TEN-T Work Programme 2011 
In 2011, the TEN-T Work Programme will c ontinue to finance projects addressing 
environmental issues and facilities. These ma y include for instance the deployment of LNG 
and scrubber technologies, such as LNG stat ions and port reception facilities aiming at 
collecting the sludge produced by scrubbers. L NG bunkering vessels can also be funded as 
pilot projects. 
b) Marco Polo II – Work Programme 2011 
The Marco Polo Work Programme for 2011 includes as a political priority the encouragement 
of the use of maritime services that implem ent innovative technologies, which significantly 
reduce polluting emissions from ships. Ther efore, the use of low sulphur fuel, SO 2 abatement 
technologies, and the use of alternative fuels like LNG will be specific eligib ility criteria for 
Short Sea Shipping projects under the Call for 2011. In practice this means that SSS-based projects submitted under the Modal shift, Cataly st and Motorways of the Sea actions shall 
only be eligible provided they implement i nnovative technologies or operational practices 
which significantly reduce polluting emissions of  maritime transport, such as the use of low 
sulphur fuels, alternative fuels like LNG and abatement technologies. 
c) EIB --European Clean Transport Facility (ECTF)  
The maritime transport sector can already benefit from the European Investment Bank (EIB) 
loans. The EIB introduced the European Clean Transport Facility (ECTF)  at the end of 
2008, which should significantly underpin innovation in the sect or, by supporting investments 
targeting research, development, and innovati on in the areas of emissions reduction and 
energy efficiency in the European transport industry. The ECTF will amount to EUR 4bn per 
year and targets  in particular the shi pping industries. The average EIB lending for 
shipbuilding and maritime infrastructure has been to the order of €500m-€550m in recent 
years 
d) Strategic Transport Technology Plan (STTP)  
The STTP under preparation for 2011 will support  research, development and innovation with 
a view to ensuring the implementation of the research results espe cially into innovative 
products and processes. It could in partic ular help the introduction of new abatement 
technologies or of new fuels such as LNG. 
 
EN  79  EN 2.2. State aid measures 
2.3. State aid measures 
Member States may decide to compensate for the net increased costs for the ship industry to 
comply with new EU standards by provi ding State aid under certain conditions. 
Such State aid must have an incentive effect , contribute to envir onmental protection and 
comply with existing guidelines or regulations , in particular the Community Guidelines on 
State aid for environmental protection105 or the Commission Re gulation N° 800/2008 of 6 
August 2008(General block exemption)106. 
When new EU standards are considered or adop ted, Member States may in particular grant 
two categories of investment aid. 
In case of investments which take place before  the adoption of new EU standards, Member 
States may grant investment aid enabling co mpanies to go beyond existing EU standards .  
When new EU standards have been  adopted but are not yet in force, Member States may grant 
investment aid for early adaptation  ahead of the entry into fo rce of the new standards.  
In order to reduce the administrative burden , Member States may grant investment aid to go 
beyond EU standards and investment for early ad aption to SME, without prior notification to 
the Commission, in accordance with the provi sions of Commission Re gulation N° 800/2008 
of 6 August 2008 (General block exemption)107. 
Financing of port reception facilities and LNG fuelling stations may be under certain 
conditions approved by the Commission under Co mmunity Guidelines on National Regional 
Aid for 2007-2013108.  
Aid to research, development and innovation may be granted to shipbuild ing, ship repair or 
ship conversion yards on the basis of th e Framework on State aid to shipbuilding109. This 
Framework will expire at the end of 2011 and is  currently being reviewed by the Commission. 
It follows from the above that Member States could grant aid to support measures such as 
retro-fitting air pollution contro l devices or marine engines on vessels ahead of the entry into 
force of the new standards, or developing ons hore infrastructure, such as for marine-LNG 
refuelling stations. 
3. INTERNATIONAL ACTION  
Similar standards for all Baltic Sea third States are necessary in order to avoid potential traffic 
flow shifts between Baltic ports. In this cont ext, the Commission proposes  to use international 
dialogue, e.g. within the framew ork of the EU-Russia Common Spaces, or as appropriate 
within the Helsinki Commission, so that all Ba ltic third countries do ratify MARPOL and 
                                                 
105  OJ C82 of 1.4.2008, p.1. 
106  OJ L 214 of 9.8.2008; p 3 
107  OJ L 214 of 9.8.2008; p 3 
108  OJ C54 of 4.3.2006, p13 
109 OJ C 317 of 30.12.2003, p.11, and the Communication from the Commission concerning the prolongation of 
the Framework on State Aid to Shipbuilding, OJ C 173 of 8 July 2008, p.3.  
 
EN  80  EN effectively comply with all Annex VI requirem ents. In more general terms, the Commission is 
preparing a Communication to set conditions for a renewed transport policy with its 
neighbours, one aim of which will be to make tran sport more efficient and bring it closer to 
EU standards. 
The Commission will also stimulate the exchange  of experiences and best practices on new 
emissions abatement technologies and the use of  alternative fuels, compliance monitoring, 
safety and cost aspects with third countries bordered by SO x ECAs, as the United States of 
America. The ultimate objective is to set up ha rmonised standards based on cost effectiveness 
assessment, which will permit to use vessels in  all seas without technical hindrances.  
4. MEDIUM -TERM AND LONG -TERM MEASURES TO FOSTER SUSTAINABLE MARITIME 
TRANSPORT  
In the long run, the main challenges of the shi pping sector relate to meeting the increasing 
demand for transport in an efficient and sustaina ble way, and to contribute to the general EU 
effort to reducing the GHG emissions from transport. To this end, as mentioned above, the 
Commission is considering a "sustainable waterborne transport toolbox" which could assist 
the sector to improve its environmental performance while maintaining its competitive 
position. This would be an integrated, multi-di mensional action, tailored to the sector's 
specific needs. Its implementation could be  undertaken by the Commission, the Member 
States, and the relevant stakeholders , either individually or jointly.  
Following the adoption of the Roadmap to a Si ngle European Transport Area - White Paper 
on Competitive and Sustainable Transport Sy stem, and in line with the new TEN-T 
Guidelines and Policy, as well as further assessment and validation with the relevant stakeholders, the sustainable waterborne transport toolbox will include the following measures:   
1. Regulatory measures to reduce emissions from ships, not  exclusively in the context of 
transposing international emissi on reduction requirements, but al so to create the adequate 
regulatory framework to facilitate the implemen tation and the safe and secure use of green 
ship technologies and the development of the n ecessary standards, notably in an amendment 
of the marine equipment directive
110. The European Commission, in cooperation with EMSA 
will assess the benefit of averaging complian ce methods which could provide to operators 
some flexibility to meet the requirement s of the directive on sulphur emissions.  
This may lead to a change of legal require ments, which will be submitted to the IMO. 
Furthermore, in its Roadmap to a Single Transport Area111, the Commission announced its 
intention to proceed, over the period 2016-2020, to internalising the costs for local pollution 
and noise in ports, as well as for air pollution at sea, which w ould reduce potential imbalances 
between regions resulting from the implementation of SECAs. 
2. Implementation of advanced green technology and alternative fuels. The 
Commission will analyse the creation of a dedicated programme to promote the use of 
                                                 
110  Council Directive 96/98/EC of 20 December 1996 on marine equipm ent, OJ L 46 of  17.2.1997, p.25 
111  Commission Staff Working Document accompanying th e White Paper – Roadmap to a Single European  
T    Transport Area – Towards a competitive and resource efficient transport system, SEC(2011) 391 
final of 23.3.2011 
 
EN  81  EN alternative fuels, notably LNG, contributing to the global effort to reduce GHG emissions 
from transport and optimise ship energy efficiency. 
3. Development of adequate green infrastructure and superstructure  to support clean 
vessel technologies such as LNG shore-based infrastructure and bunker delivery logistics.  
The use of LNG requires investment in term inals with LNG filling stations for ships. 
Appropriate locations for developing safe a nd efficient LNG bunker logistics need to be 
identified. The case for specific governmental  support for the initial development of the 
necessary shore based infrastructure will be examined. The Commission will consider supporting the deployment of LNG shore-based infrastructure a nd bunker delivery logistics in 
the European Union. A support programme fo r the development of a EU LNG bunkering 
network or the installation of coastal stations will be studied. These acti ons will be part of 
wider programmes (like TEN-T or Marco Polo ) and may be also assessed with these 
respective programmes. 
Given the budgetary constraints of the TEN-T programme, which provides for relatively low 
co-funding rates, a better coordi nation will be required with funding opportuni ties under the 
Structural Funds (European Rural Developm ent Fund and the Cohesi on Fund), which allow 
for higher co-funding rates. To this end, the Commission aims to develop a transport 
infrastructure framework, encompassing the in vestment strategies of both the TEN-T and 
Structural Funds. In view of continued pres sure on public sector budge t resources, unlocking 
the potential of private finances is very important to support i nvestment in green technologies 
and alternative fuels. In its Ro admap to a Single Transport Area
112, the Commission 
announced its intention to establish an enabli ng framework for the development of PPPs, and 
to participate in designing new fi nancing instruments for the tran sport sector, such as the EU 
project bond initiative113. 
4. Research and innovation : moving towards low carbon wate rborne transport requires 
substantial research efforts. Furthermore, it is very important to optimise research and 
innovation activities and to ensure the timely de ployment of their results.  The Commission in 
its Strategic Transport Technol ogy Plan (STTP) will address options for all transport modes, 
and notably for waterborne transport. Furt hermore, funding for European research and 
innovation relevant to this mode of transport sh ould be part of future framework programmes, 
and industry-driven prioritie s be reinforced, as suppor ted by the Communication on 
Innovation UnAnnex 
                                                 
112  Commission White Paper – Roadmap to a Single European Transport Area – Towards a competitive 
and resource efficient transport system, COM(2011) 144 of 28.3.2011 
113  Commission White Paper – Roadmap to a Single European Transport Area – Towards a competitive 
and resource efficient transport system, COM(2011) 144 of 28.3.2011, p.109 
 
EN  82  EN ANNEX IX A DMINISTRATIVE BURDENS  
 
The European Commission's Impact Assessment Guidelines request that administrative 
burdens associated with the delivery of EU  legislation are assessed and reduced where 
feasible whenever an impact assessment is conducted.  For the purposes of legislative impact assessmen t 'administrative burdens' are strictly defined 
as information obligations  that are placed on citizens, busin esses or public administration 
(excluding the EU) by EU legislation and that enta il financial costs. These obligations can be 
to provide or record and keep information.  The Directive contains information obligations  mostly related to compliance monitoring and 
reporting. The following is a mapping of inform ation obligations currently included in the 
Directive:  
• For Member States 
 
Article Description Comment 
Art. 4a (6) Maintain a register 
of local suppliers of marine fuel This provision is not revisited in this impact assessment. 
Art. 4c (4) Communicate to 
IMO criteria for the assessment of impacts on ecosystems of waste streams 
associated with 
abatement technologies. This is a conditional obligation, dependent on the use of 
abatement technologies to meet compliance (instead of low sulphur fuels). This provision is  not revisited in this impact 
assessment.  
Art. 7 (1) Provide the 
Commission with a short yearly report  This provision is not revisited in this impact assessment.. 
  
• For companies 
 
Article Description Comment 
Art 4a (5), 
Art. 4b (1b) and Art. 6 (1a) Register fully 
information on the sulphur content of fuels in log books and bunker delivery notes. Ships hold log books on which operational information is 
registered. This requires the entry of information on the 
sulphur content of fuel, which also has to be present on 
the bunker delivery note. There is an IMO obligation to keep fuel bunker delivery notes for at least one year. In general the sulphur content of  fuel has to be known by 
the operator to ensure it is compatible with a ship's 
 
EN  83  EN installed technology. This provision is not revisited in 
this impact assessment. 
Art. 4a (6) For fuel suppliers. 
Document the sulphur content of fuels on a bunker delivery note. This provision is not revisited in this impact assessment. 
Art. 4c (1) Notify in writing the 
Commission and the 
port State on trials; 
provide full results to the Commission and to the public. This provision is not revisited in this impact assessment. 
Art. 4c (4) Document that 
waste streams associated with abatement technologies used to meet compliance have no impact on ecosystems. This is a conditional obligation, dependent on the use of 
abatement technologies too m eet compliance (instead of 
low sulphur fuels). This provisi on is not revisited in this 
impact assessment. 
 The options generated in the impact assessment would not in troduce some changes to these 
information obligations.