Proposal for a Directive of the European Parliament and of the Council amending Directive 1999/32/EC as regards the sulphur content of marine fuels
Date: 2002-11-20
Institutions: European Commission
Subjects: EU policy, acidification, air quality, fuel, maritime transport, pollution control measures, sulphur, vessel

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Proposal for a Directive of the European Parliament and of the Council amending Directive
1999/32/EC as regards the sulphur content of marine fuels

(2003/C 45 E/32)

(Text with EEA relevance)

COM(2002) 595 final — 2002/0259(COD)

(Submitted by the Commission on 20 November 2002)

EXPLANATORY MEMORANDUM

1. INTRODUCTION

1.1. Environmental impacts of burning marine fuels containing sulphur

Sulphur is naturally present in liquid and solid fuels such as oil and coal. Most marine fuels contain
sulphur. The combustion of fuels containing sulphur gives rise to emissions of sulphur dioxide (SO2 or
SOx), and particulate matter (PM):
including primary soot particles, and secondary inorganic sulphate
particles formed as a result of atmospheric oxidation of sulphur dioxide. Nitrogen oxides (NOx) are also
emitted when fuels are burned, as a result of incomplete combustion, and to a lesser extent the nitrogen
content of the fuel.

SO2 emissions can damage human health and the built environment, and contribute to acidification,
damaging sensitive ecosystems. PM emissions can damage human health. NOx emissions contribute to
acidification, and to the formation of ground-level ozone, which can harm human health and vegetation.
impacts under consideration in this
Acidification and effects on human health are the two principal
proposal.

Emissions modelling undertaken by EMEP in 2000 (1), and illustrated in Figure 1 below, shows the impact
of ships' emissions in the EU on acidification, in terms of their contribution to the exceedance of critical
loads of acidity.

Figure 1: The contribution of ship emissions of SO2 and NOx to accumulated exceedances of critical loads of acidity.
Units: Acid equivalents per hectare per year. Source: EMEP, 2000.

________________________________________________ _________________________________________

(1) For more details see EMEP's 2000 report

international shipping on European pollution levels’ at
http://www.emep.int/reports/dnmi_note_5_2000.pdf. EMEP have reviewed the new ship emissions data from
Entec against the data used for that report. They believe that the differences are not significant, and therefore
that the report's findings remain valid.

‘Effects of

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load of acidity is the maximum deposition of sulphur and nitrogen not causing harmful
The critical
leaching of acidity. Critical loads vary depending on geological and ecological factors, which mean that
ecosystems in northern Europe are generally more acid-sensitive than those in the south.

The modelling behind the map in Figure 1 shows that ship traffic contributes to exceedances of critical
loads of acidity by more than 50 % in most of the coastal areas along the English channel and North Sea,
in the Baltic sea along the coast of Germany and Poland, and also in large parts of southern Sweden and
Finland.

We also know that throughout the EU, ship emissions contribute between 20 % and 30 % to the air
concentrations of secondary inorganic particles (PM) in most coastal areas (1). Secondary PM, as well as
primary PM, SO2 and NOx, has impacts on human health throughout the EU.

Both short-term and long-term exposure to air pollutants gives rise to health impacts — in terms of effects
on mortality and on morbidity (illness, including exacerbation of asthma, incidence of bronchitis and heart
failure). The table below provides illustrative data on the incidence of death and ill-health for a 1 000
tonne change in emissions of different air pollutants in different EU sea areas (2).

Table 1.1.

Some health impacts of ship emissions in different EU sea areas

SO2

NOx

PM

Respiratory hospital admissions
(per kilotonne emitted)

Eastern Atlantic

Baltic Sea

English Channel

Northern Mediterranean

North Sea

Deaths linked to short-term exposure
(per kilotonne emitted)

Eastern Atlantic

Baltic Sea

English Channel

Northern Meditteranean

North Sea

Life years lost through long-term exposure
(per kilotonne emitted)

Eastern Atlantic

Baltic Sea

English Channel

Northern Meditteranean

North Sea

0,69

0,25

0,90

0,71

0,66

1,66

0,60

2,18

1,72

1,60

4,22

1,52

5,55

4,37

4,06

0,57

0,42

0,55

0,69

0,31

0,38

0,50

0,26

0,40

0,13

6,75

2,32

7,81

8,82

4,53

0,72

0,20

0,98

0,79

0,76

—

—

—

—

—

14,32

3,96

19,41

15,63

15,04

(1) See EMEP's 2001 report ‘The influence of ship traffic emissions on the air concentrations of particulate matter’, at

http://www.europa.eu.int/comm/environment/air/background.htm#transport

(2) Source: BeTa EC database of externalities of air pollutants. AEA Technology, 2002. Based on estimates that were
calculated using the ExternE methodology (EC, 1998) and DG Environment guidelines on the valuation of health (see
http://europa.eu.int/comm/environment/enveco/studies2.htm).

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1.2. EU regulation on SO2 emissions and fuel sulphur content

Directive 1999/30/EC (1) sets limit values for the level of SO2in ambient air, for the protection of human
health and vegetation. Directive 2001/81/EC (2) on national emissions ceilings sets national SO2 targets for
2010, to reduce acidification.

Directive 1999/32/EC (3) sets sulphur limits for certain fuels used in EU territory, including marine gas oils
and diesel oils used by ships in inland waterways and territorial waters (up to 12 nautical miles from
shore). The directive also sets sulphur limits for inland heavy fuel oils and gas oils, but no limits are set for
the sulphur content of marine heavy fuel oils. Other directives set sulphur contents for liquid fuels used by
automotive and non-road vehicles.

Since there are no sulphur limits for marine heavy fuel oils, these now contain a high amount of sulphur
relative to other fuels. The average sulphur content of marine heavy fuel oil worldwide is currently 2,7 %,
or 27 000 parts per million (ppm), compared to 2 000 ppm maximum for heating oil, and a forthcoming
limit of 10 ppm for automotive petrol and diesel. This means that ships are now one of the biggest
sources of SO2 emissions in the European Union. Recent research for the Commission (4) shows that by
2010, ship emissions of SO2 are likely to be equivalent to over 75 % of all land-based emissions, including
emissions from all transport modes, combustion plants and heating engines which burn liquid fuels.

For the reasons outlined above, the European Commission believes that reducing SO2emissions from ships
is now an important environmental priority.

1.3. MARPOL Annex VI

An international instrument on air pollution from ships — MARPOL Annex VI (5) — was adopted by a
Diplomatic Conference hosted by the International Maritime Organization in 1997.

MARPOL Annex VI establishes a global sulphur cap of 4,5 % for heavy fuel oil burned by ships, and
designates two SOx Emission Control Areas (SOxECAs) where fuel used by ships must be below 1,5 %
sulphur, or equivalent abatement technologies used. The Baltic Sea was designated a SOxECA in the
original protocol, and the North Sea & English Channel were added in 2000 (6), after a negotiating
effort by EU Member States.

MARPOL Annex VI enters into force internationally one year after it has been ratified by at least 15 flag
states representing at least 50 % of the gross tonnage of the world's merchant shipping. When Directive
it was assumed that entry into force would be achieved before long.
1999/32 was being prepared,
However
the
Islands, and Liberia representing approximately 25 % of world tonnage. The
Bahamas,
remaining EU 14 represent approximately 10 % world tonnage, candidate countries a further 10 %
(notably Malta at 5 % and Cyprus at 4 %), while Panama, the biggest open register, represents 20 %.

to date only six countries worldwide have ratified — Sweden, Norway, Singapore,
the Marshall

(1) Council Directive 1999/30/EC of 22 April 1999 relating to limit values for sulphur dioxide, nitrogen dioxide and

oxides of nitrogen, particulate matter and lead in ambient air (OJ L 313, 13.12.2000, p. 12).

(2) Directive 2001/81/EC of the European Parliament and of the Council of 23 October 2001 on national emission

ceilings for certain pollutants (OJ L 309, 27.11.2001, p. 1).

(3) Council Directive 1999/32 relating to a reduction in the sulphur content of certain liquid fuels and amending

Directive 93/12/EEC (OJ L 121, 11.5.1999, p. 13).

(4) Quantification of emissions from ships associated with ship movements between ports in the European Community.

Entec, 2002. http://www.europa.eu.int/comm/environment/air/background.htm#transport

(5) Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships, 1973, as

modified by the Protocol of 1978 relating thereto.

(6) Agreed at the IMO's Marine Environment Protection Committee in 2000 (MEPC 44)

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1.4. Aims of the proposal

This proposal aims to reduce ships' emissions of sulphur dioxide and particulate matter by modifying
Council Directive 1999/32 on the sulphur content of marine fuels. In particular, the proposal aims to:

— introduce a 1,5 % sulphur limit for marine fuels used by all seagoing vessels in the North Sea, English
Channel and Baltic Sea, in line with MARPOL Annex VI sulphur limits, in order to reduce the effect of
ship emissions on acidification in Northern Europe and on air quality

— introduce a 1,5 % sulphur limit for marine fuels used by passenger vessels on regular services to or
in order to improve air quality around ports and coasts, and create

from any Community port,
sufficient demand to ensure an EU-wide supply of low sulphur fuel

— amend existing sulphur provisions for marine gas oils used by seagoing and inland vessels, in order to

improve local air quality in ports and on inland waterways

These marine fuels amendments are the main substantive elements of this proposal. Two other elements
are also proposed:

— consequential amendments to the inland heavy fuel provisions arising from Directive 2001/80/EC

relating to large combustion plants, and

— the creation of a Regulatory Committee to agree future technical amendments which do not require

political co-decision

2. EXPLANATION OF INTENTIONS

2.1. Current provisions

The only marine fuels currently in the scope of directive 1999/32 are marine gas oils. These are defined in
the directive to include all marine distillate fuels: DMX and DMA grades, which are known as marine gas
oils or MGO, but also DMB and DMC grades, which are known as marine diesel oils or MDO. The
directive does not currently apply to the third (and most widely used) type of marine fuel, which is heavy
fuel oil (HFO).

The current marine gas oil provisions require Member States to ensure that if ships are using marine
distillate fuels in the Community (territorial waters — including seas 12 nautical miles from shore and
inland waterways), then the sulphur content of those marine distillate fuels must be 0,2 % or below (0,1 %
by 1 January 2008).

2.2. Marine fuels — introducing new provisions

Article 7.3 of Directive 1999/32/EC requires the Commission to consider which measures could be taken
to reduce the contribution to acidification of the combustion of marine fuels other than gas oils and if
appropriate, make a proposal.

The first proposed amendment introduces a new sulphur limit for all marine fuels, including heavy fuel oil,
used in the North Sea, English Channel and Baltic Sea. This is the same limit agreed at the IMO for the SOx
Emission Control Area under MARPOL Annex VI. Anticipating that EU Member States and accession
candidate countries will soon ratify MARPOL Annex VI, and that other major flag states will follow, this
will mean that the internationally-agreed sulphur limit is implemented 12 months after entry into force of
this directive, or one year after entry into force of Annex VI, whichever is the earlier.

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Secondly, the proposal aims to set the same 1,5 % sulphur limit for all marine fuels used by passenger
ships on regular services to or from any EU port. This will reduce emissions in populated southern
European urban areas which would otherwise not benefit from the SOx Emission Control Area. The
proposal
is in line with established Community policy of imposing high operational standards on all
passenger ferries operating to or from EU ports.

Thirdly, the proposal aims to ensure that compliant 1,5 % sulphur fuel is made available in sufficient
quantities in all EU Member States. A corollary benefit of the passenger ships proposal is that it will help
Member States achieve this by creating EU-wide demand for low-sulphur fuel oil.

Finally, the proposal aims to remove the 0,2 % sulphur limit for DMB and DMC marine diesel oil grades,
and ban the sale of DMB and DMC grade fuels having over 1,5 % sulphur. This will allow marine diesel
oils to be used to comply with the SOx emission control area – which is particularly important for
international vessels as low sulphur heavy fuel oil may not be widely available outside the EU.

2.3. Marine gas oils — amending current provisions

The other main amendments relate to the current marine gas oil provisions under Article 4 of Directive
1999/32/EC. From consultations with industry, it is clear that these provisions are effective in relation to
inland vessels, whose engines are designed only to run on marine gas oils. However, their effectiveness is
less clear with regard to seagoing vessels. Seagoing vessels' main propulsion engines operate predominantly
on heavy fuel oils, which are not currently covered by the directive and which under the current inter-
national marine fuels standard, ISO 8217, can contain up to 5 % sulphur.

Historically, the high viscosity of heavy fuel oil meant that seagoing vessels had to switch to distillate fuels
on approaching ports — for manoeuvring, and subsequently for powering electricity generators from
auxiliary engines while at berth. This is no longer the case, as new engine and oil-heating technologies
now allow seagoing vessels to operate on heavy fuel oil at all times. There has therefore been a trend
including in ports,
towards uni-fuel operation on cheaper, higher sulphur heavy fuel oil at all times,
leading to higher emissions of SO2, PM and nitrogen oxide (NOx) close to populated areas.

In preparing this proposal, the Commission has therefore considered how best to significantly reduce ships'
air pollutant emissions close to areas where people live. It was decided that the best approach in terms of
environmental effectiveness and enforceability would be to regulate on the sulphur content of fuel used in
EU ports. It was then necessary to consider how to define the port area, and in particular whether the
regulation should apply to the fuel used by ships during manoeuvring (main engines), and/or the fuel used
by ships while at berth (mostly auxiliary engines providing power for electricity generation).

While it is possible for ships to switch the fuel being supplied to their main engines while manoeuvring,
engine manufacturers have advised that a switch from high viscosity heavy fuel oil straight to low viscosity
marine gas oil would require a 20-60 minute change-over procedure to avoid problems with the fuel
pumps and injector systems resulting from rapid changes in temperature. Any shortcuts in the procedure
could lead to temporary engine failure, which could be particularly dangerous close to ports.

As well as these practical considerations, a quantification of in-port emissions was used to inform the
proposal. This found that air pollutant emissions during ships' manoeuvring in ports were around one
quarter of the emissions while at berth.

The first aim of this proposal is therefore to require that all marine fuels used by ships at berth in all
Community ports contain 0,2 % sulphur or less. This approach is proportionate, practical and easily
enforceable, and will improve local air quality by reducing ships' emissions of SO2, PM and NOx in ports.

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Secondly, it is proposed to remove the existing derogation for Greece and the overseas territories. It is clear
that ship emissions affect local air quality in these areas as much as they do elsewhere, and the emissions
quantification suggests that three of the ten ports with the highest ship emissions in the EU are in Greece.

Thirdly, it is proposed to ban the sale of marine gas oils (DMA and DMX grades) having over 0,2 %
sulphur (0,1 % by 2008). This will help to ensure that compliant fuel is made available.

The final element relates to Article 1.2(a) of Directive 1999/32, which currently exempts ‘marine gas oil
used by ships crossing a frontier between a third country and a Member State’ from the 02 % sulphur
content requirement. This exemption has proved difficult to interpret and enforce in a uniform manner. It
was included on the grounds that international ships would not necessarily be able to find a supply of
compliant gas oil at their port of departure, for use in Community territorial waters. The lack of worldwide
availability of 0,2 % marine gas oil has been born out by a survey of the global fuels market undertaken for
the Commission. (1) The proposed amendment requires seagoing ships to use 0,2 % sulphur fuel only while
at berth in EU ports, therefore allowing ships to take on compliant fuel on arrival, and removing the need
for an exemption.

Finally, therefore,
between a third country and a Member State.

it is proposed to remove the exemption for international ships crossing a frontier

2.4. Heavy fuel oil for use by large combustion plants — consequential amendments

Article 3.4 of Directive 1999/32/EC states that the provisions relating to sulphur content of heavy fuel oil
for inland use shall be reviewed and, if appropriate, revised in the light of any future revision of Directive
88/609/EEC on large combustion plants. Directive 2001/80/EC, adopted last year, revises Directive
88/609/EEC and introduces new requirements relating to sulphur dioxide emissions from large combustion
plants. As SO2 emissions are generally a function of the sulphur content of the fuel being used, it is now
necessary to bring forward consequential amendments to directive 1999/32.

This proposal therefore aims to introduce consequential amendments to Directive 1999/32/EC to be
compatible with the new Directive 2001/80/EC relating to emissions from large combustion plants.

2.5. Removing the derogation provision for heavy fuel oil

Paragraphs 2 and 5 of Article 3 set out a procedure whereby Member States may request a derogation
from the 1 % maximum sulphur content of heavy fuel oil, which applies from 1 January 2003. After 1
January 2003, the heavy fuel oil derogation will no longer be relevant as the 1 % sulphur limit will have
entered into force. The removal of this clause will not affect transition arrangements with candidate
countries, which can be negotiated on a case by case basis.

It is therefore proposed to delete the derogation provision for heavy fuel oil.

(1) Advice on the costs to fuel producers likely to result from a reduction in the level of sulphur in marine fuels. Beicip

Franlab, 2002. http://europa.eu.int/comm/environment/air/020505bunkerfuelreport.pdf

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2.6. Establishing a Regulatory Committee to agree technical amendments in future

It can be preferable for technical and/or consequential amendments such as those discussed under 2.4
above to be agreed by a Regulatory Committee rather than by a lengthy co-decision procedure with the
European Parliament and Council.

This ‘comitology’ procedure is particularly appropriate where amendments are simply consequential to
other directives which have already been agreed politically by co-decision. It is also a useful means of
agreeing on non-political proposals such as the development of guidelines for policy implementation.
However, no Regulatory Committee is currently provided for under directive 1999/32.

This proposal therefore aims to create a Regulatory Committee, which can be used in future to take
decisions on technical issues which are not politically controversial. This Committee cannot be used to
adopt amendments which result in any direct or indirect changes to fuel sulphur limits.

3. COSTS & BENEFITS OF THE PROPOSAL

This section deals only with the marine fuels proposals as they affect seagoing ships, since the proposals
do not change the current situation for inland vessels, the amendments on large combustion plants are
consequential to Directive 2001/80/EC, and the proposal to establish a Regulatory Committee will not give
rise to any costs. To inform the proposal, DG Environment commissioned two separate studies, whose
results are central to this cost-benefit analysis (1):

— A report by Beicip Franlab on the costs to EU refiners of producing lower sulphur marine fuels (the
‘Franlab report’) The report concludes that the greater the quantity of low sulphur fuels produced, the
greater the unit production costs per tonne. This means that contrary to the usual principles of
economics, as demand for low sulphur fuel rises, so does the price. This is illustrated in Figure 2 below.

— A study by Entec UK Ltd to quantify emissions from ships (the ‘Entec study’). The study provides an
inventory of actual year 2000 emissions and puts forward a number of future fuel consumption and
emissions projections based on two scenarios for annual growth in ship movements (1.5 % and 3 %),
and various regulatory scenarios. For this analysis, we have used the 1,5 % growth figures.

3.1. Costs of marine fuels proposals

For the purposes of this analysis, we have assumed that EU refiners' costs will be passed on to shipowners
through increased fuel prices, as has been the case with previous regulations on fuel quality. We indicate
below the average fuel price premia (extra cost per tonne) for low sulphur fuel over high sulphur fuel,
identified in the Franlab report on the basis of average refinery costs, and using fuel consumption data
derived for 2006 — 2008 in the Entec study. Where the year 2006 is mentioned, this is indicative only, as
the provisions concerned may well apply before this. In any case the annual cost-benefit ratio remains very
similar year on year.

(1) Both studies are available at. http://www.europa.eu.int/comm/environment/air/background.htm#transport

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3.1.1. Costs and methods of producing low sulphur heavy fuel oil in EU refineries

Marine fuel prices fluctuate considerably, but as a point of reference, average prices in the Amsterdam-
Rotterdam-Antwerp region from 1997-2001 have been EUR 110 per tonne for higher sulphur marine
heavy fuel oil, and around EUR 190 per tonne for higher sulphur marine gas oil.

Figure 2 below shows a wide range in the possible premium for low sulphur heavy fuel oil. The high end
represents oil companies' target levels to achieve a return on investment, while the low end is more in line
with the actual return achieved historically in the European refining industry. The range also reflects
uncertainty about the investment costs for producing low sulphur fuel. For the purpose of this cost-benefit
analysis we have assumed a price premium in the middle of the range.

Figure 2. Cost curve showing the price premium for EU refiners to provide 1.5 % sulphur marine fuel, against a current
average quality of 2.9 %. Source: Beicip Franlab 2002.
_____________________________________________ _______________________________________________________

To produce lower sulphur heavy fuel oil, the Franlab report suggests that refiners' initial approach would
be to reblend within the refining system, as this is the least expensive method. At least 4.7 million tonnes
could be provided in this way. If more were required, a second more expensive approach would be to buy
and use greater quantities of expensive lower sulphur crude in the refining process.

It should be noted that neither of these approaches will reduce the overall sulphur balance,
resulting in slightly higher sulphur contents in fuel used elsewhere.

instead

The third and most expensive option is to desulphurise the fuel. This approach will reduce the overall
sulphur balance, but it is the most costly and also the most energy-intensive for refineries, resulting in
increased CO2 emissions. There are currently very few plants in Europe which desulphurise residual fuel
because the returns do not justify the investment.

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3.1.2. Supplying 1.5 % sulphur marine fuel for use in the North Sea & Baltic SOxECAs, and for use by passenger

vessels on regular services

The Entec study projects that by 2006 around 14 million tonnes of marine fuel will be consumed annually
in the North Sea and Baltic SOxECAs. Emissions data suggests that a further 4 million tonnes are
consumed by regular passenger vessels in EU sea areas outside the SOxECA. Under this proposal, all
18 million tonnes of this fuel must be 1.5 % sulphur or less. CONCAWE (1) have estimated that around
half of the marine fuel required for use in the SOxECAs (7 million tonnes) would be supplied in EU ports,
and the other half would be supplied outside the EU to international vessels whose journey will pass
through a SOxECA. Assuming that all 4 million tonnes of marine fuel used by regular passenger ferries
outside the SOxECA is supplied in the EU, the total quantity of lower sulphur marine fuel required in the
EU would be 11 million tonnes. The Franlab report suggests that the average price premium per tonne for
supplying 11 million tonnes of 1.5 % sulphur marine heavy fuel oil in the EU would be around 50 EUR.

It is more difficult to predict the price premium for 1.5 % sulphur marine fuel supplied outside the EU. In
some areas, 1.5 % sulphur marine heavy fuel oil is unlikely to be available because the crude oil used to
produce marine fuels has a high sulphur content. In these areas, ships destined for a SOxECA are likely to
take on marine distillate fuel to comply with the 1.5 % sulphur requirement. It is assumed that half of the
7 million tonnes of fuel purchased outside the EU for use in the SOxECAs will be distillate fuel, with a
price premium of around EUR 60 (the average price premium for DMB grade marine diesel oil over heavy
fuel oil over the past 4 years), and that the other half will be heavy fuel oil, with a price premium similar
to that for low sulphur heavy fuel oil in the EU of around EUR 50. The average price premium for the 7
million tonnes of 1.5 % sulphur marine fuel supplied outside the EU is therefore assumed to be EUR 55.

incremental cost of

therefore assumed to be
The annual
(7 m × EUR 50) + (7 m × EUR 55) = EUR 735 m. The annual incremental cost of the passenger vessel
proposal for 2007 is assumed to be (4 m × EUR 50 = EUR 200 m.

the SOxECA proposal

for 2006 is

3.1.3. Supplying 0.2 % sulphur marine fuel for use in EU sea ports (0.1 % from 2008)

The Entec study projects that by 2006 around 2.3 million tonnes of marine fuel will be consumed
annually by ships at berth in EU ports. Under the proposal, this fuel would be required to be 0.2 %
sulphur or below. It is assumed that all of this fuel would be supplied by EU refineries, in the form of
marine gas oil. It is further assumed that half of the vessels entering EU ports would have to switch from
heavy fuel oil to marine gas oil to comply with the proposal, representing a price premium of EUR 100
per tonne, and the other half would already be using a marine distillate oil, and switching to a lower
sulphur grade. The Franlab report suggests that the price premium for switching from 1.5 % S to 0.2 %
sulphur marine gas oil would be EUR 15.5 per tonne. The average price premium for this fuel is therefore
assumed to be EUR 57.75. The annual incremental cost of the in-ports proposal for 2006 is therefore
assumed to be (2.3 m × EUR 57.75) = EUR 133 m.

From 2008, the sulphur limit decreases from 0.2 % to 0.1 %, consumption increases to 2.4 million tonnes,
and the price premium is presumed to be EUR 2 per tonne for switching from 0.2 % S to 0.1 % sulphur
marine gas oil. The annual incremental cost of the in-ports proposal for 2008 is therefore assumed to be
(2.4 m × EUR 2) = EUR 4.8 m.

(1) CONCAWE is the Oil Companies' Health, Safety and Environment Organisation.

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3.2. Benefits of marine fuels proposals

The overall benefits of the proposal are derived from the reduced emissions of conventional air pollutants
associated with reducing the sulphur content of marine fuels consumed in the SOxECA and in EU ports.
Reductions in conventional pollutants have a number of direct benefits on human health and environment.
Some of these benefits can be converted into monetary form by attaching a benefit to each tonne of
pollutant reduced.

With respect to acidification, methodologies are not yet available to monetize the effects on ecosystems in
terms of exceedance of critical loads. This is significant because it means that the principal benefit of the
SOxECA part of this proposal — the reduction of ships' contribution to the exceedance of critical loads for
acidification in Northern Europe — cannot be monetized.

The monetized benefits which have been produced recently for the Commission and used to assess this
proposal (1), take into account effects on human health as well as effects on crops and building materials.
The health impacts set out in Table 1 (p1) were analyzed, and other impacts on health, buildings and crops
added, to produce monetized benefits per tonne of emissions reduction. The resulting values used in this
cost-benefit analysis are set out in table 3.2 below.

Table 3.2.

Monetized benefits of emissions reductions

Pollutant

Location of emission reduction

Air quality benefit

EUR per tonne
reduced (average)

Explanation

SO2

SO2

SO2

PM

PM

North Sea, Baltic Sea &
English Channel (SOxECA)

East Atlantic & Northern
Mediterranean

EU port areas

EU port areas

SOxECA port areas

3 933

4 600

8 200

30 500

27 650

Reduced impact of SO2 and sulphate particles
on health, and SO2 and acidity on materials

Reduced impact of SO2 and sulphate particles
on health, and SO2 and acidity on materials

Benefits as above, but higher value because
more people are affected

Reduced impact on human health (high value
as PM is particularly harmful)

Reduced impact on human health (slightly
lower value than above as SOxECA countries
have slightly lower average population density
than EU)

NOx

EU port areas

4 200

Reduced impact of nitrate particles on health
and ozone on health and crops

The values for sea areas are based on air quality benefits in rural areas in bordering countries, weighted by
straight-line length of coasts. The values for different sea areas were averaged to provide values for the
SOxECA area, and for the East Atlantic & Northern Mediterranean.

(1) BeTa EC database of externalities of air pollutants. AEA Technology, 2002. Based on estimates that were calculated

using the ExternE methodology (EC, 1998) and DG Environment guidelines on the valuation of health
(see http://europa.eu.int/comm/environment/enveco/studies2.htm).

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The values for EU and SOxECA port areas are based on the assumption that half of the ports are in rural
areas and half are in cities having 100 000 population. This is a conservative estimate because the Entec
study found that of the 50 ports with the highest emissions, ten have populations of around 500 000 or
more. In order of emissions, these are Hamburg, Barcelona, Genoa, London, Amsterdam, Thessaloniki,
Naples, Lisbon, Dublin and Copenhagen. Of these, five are EU capitals and four have populations around 1
million or more.

In these areas the monetized benefit per tonne of SO2and PM reduced will be 5 to 15 times greater than
that used for the purpose of this cost-benefit analysis, because more people benefit from the emissions
reductions.

Nonetheless, by way of sensitivity analysis, the costs and benefits of the in-ports proposal have also been
calculated assuming all ports are in rural areas (and therefore that the benefits per tonne of SO2and PM
reduced are almost halved). Under this scenario, benefits still outweigh costs by 4:1.

3.3. Summary tables of costs, benefits and emissions reductions

Three tables below summarise the annual costs and benefits of the different marine fuels elements of the
proposal.

Table 3.3.1.

Annual benefits & costs of SOxECA proposal (2006)

BENEFITS

3 933

EUR Average benefit per tonne SO2reduced in North Sea, Baltic & Channel

× 337 000

Tonnes SO2 reduced through SOxECA proposal

= 1 325 421 000

EUR Annual air quality benefit

27 650

EUR Average benefit per tonne PM reduced in ports in SOxECAs

× 2 000

Tonnes PM emissions reduced in ports

= 55 300 000

EUR Annual air quality benefit

1 380 721 000

EUR Total annual air quality benefit

COSTS

50

EUR per tonne premium for 1.5 % sulphur marine fuel bought in the EU

× 7 000 000

Tonnes of 1.5 % S HFO bought and used in SOxECA

= 350 000 000

EURAnnual incremental fuel cost

55

EUR per tonne premium for 1.5 % sulphur marine fuel bought outside EU

× 7 000 000

Tonnes of 1.5 % marine fuel bought outside EU and used in SoxECA

= 385 000 000

EUR Annual incremental fuel cost

735 000 000

EUR Total annual incremental fuel cost

EUR 645 721 000

= ANNUAL NET BENEFIT

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Table 3.3.2.

Annual benefits & costs of passenger vessels proposal (2007)

BENEFITS

4 600

EUR Average benefit per tonne SO2reduced in Mediterranean/Atlantic

× 89 000

Tonnes SO2 reduced through passenger ships proposal

= 409 400 000

EUR Annual air quality benefit

COSTS

50

EUR per tonne premium for 1.5 % sulphur marine fuel bought in the EU

× 4 000 000

Tonnes of 1.5 % S HFO used by ferries in Mediterranean/Atlantic

= 200 000 000

Annual incremental fuel cost

EUR 209 400 000

= ANNUAL NET BENEFIT

Table 3.3.3.

Annual benefits & costs of in-ports proposal (2006 & 2008)

0,2 % S fuel (2006)

0,1 % S fuel (2008)

BENEFITS

8 200

× 81 000

8 200

EUR Average benefit per tonne SO2 reduced in ports

× 3 000

Tonnes SO2 reduced in ports

= 664 200 000

= 24 600 000

EUR Benefit

30 500

× 8 000

30 500

EUR Average benefit per tonne PM reduced in ports

× 200

Tonnes PM reduced in ports

= 244 000 000

= 6 100 000

EUR Benefit

4 200

× 3 000

4 200

EUR Average benefit per tonne NOx reduced in ports

× 70

Tonnes NOx reduced in ports

= 12 600 000

= 294 000

EUR Benefit

920 800 000

30 994 000

EUR Total annual incremental air quality benefit

0,2 % S fuel (2006)

0,1 % S fuel (2008)

COSTS

57,75

2

EUR per tonne premium for fuel

× 2 300 000

× 2 400 000

Tonnes of fuel consumed in EU ports

132 825 000

4 800 000

EUR Total annual incremental fuel cost

EUR 787 975 000

EUR 26 194 000

= ANNUAL NET BENEFIT

It is clear that for all elements of the proposal, benefits significantly outweigh costs. In fact, for the 1.5 %
sulphur fuel elements, the fuel price premium would have to rise to EUR 99 per tonne before the costs
would exceed the benefits. For the in-ports proposal, the fuel price premium for 0.2 % sulphur marine fuel
would have to rise to EUR 400 per tonne before costs would exceed benefits.

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3.4. Carbon dioxide

The move to lower sulphur marine fuel will also have a slight effect on emissions of carbon dioxide (CO2),
the principal greenhouse gas which contributes to climate change. Desulphurising fuels is energy-intensive
and leads to increased CO2 emissions from refineries. On the other hand, lower sulphur fuels have a higher
specific energy, leading to lower CO2 emissions from vessels.

While a small amount of additional desulphurisation will be required to provide the 2.3 million tonnes of
low sulphur gas oil required under this proposal, the Franlab report predicts that most of the low sulphur
heavy fuel oil required will be provided by reblending and/or using lower sulphur crude. It is therefore
likely that any CO2 increases at refineries will be small, and more than offset by the annual reduction in
CO2 emissions from ships — projected in the Entec study to be 190 000 tonnes in 2006. Consequently,
we have not included CO2 emissions in this cost-benefit analysis.

3.5. Possible impacts on sulphur content of heavy fuel oil used outside the SOxECAs

For the SOxECA part of this proposal it is assumed that the 7 million tonnes of EU-supplied heavy fuel oil
required for use in the SOxECAs would be produced at relatively low cost in EU refineries by reblending
within the existing refining system, or by using a lower sulphur crude.

As mentioned in section 3.3.1, this will mean that the sulphur content of fuels produced in the EU for use
outside the SOxECAs is likely to increase slightly. Assuming that the current average sulphur content of
heavy fuel oil in the EU is 2,9 % (CONCAWE figure used in the Franlab report) and knowing that 7 million
tonnes of EU-produced HFO would need to be blended down by 1,4 % to arrive at an average 1,5 %
sulphur content, a simple sulphur mass calculation (7 m × 0,014) implies that 98 000 tonnes of sulphur
would be moved out of the SOxECAs. Assuming that all 98,000 tonnes of deblended sulphur ends up in
the 35 million tonnes of fuel which is consumed in EU sea areas outside the SOxECA, there would be an
increased sulphur content of around 0,3 % in this fuel. This is a pessimistic assumption, as it is likely that
much of the deblended sulphur would in fact end up in fuel being consumed outside EU sea areas in the
high seas.

Moving sulphur emissions from one area to another can be justified to an extent, because the rationale
behind the SOxECAs, as agreed by Member States at the IMO, is to reduce the impact of ships' SO2
emissions on acid-sensitive ecosystems. Other EU sea areas do not border acid-sensitive ecosystems to
the same extent as the North Sea and Baltic SOxECAs, so it is rational to move ships' SO2 emissions to
these areas where they do less harm.

Nonetheless, it is important to ensure that SO2 emissions from ships in other EU sea areas do not reach a
level which could adversely affect local air quality and harm human health.

This is one reason why the Commission is proposing a 1,5 % sulphur fuel standard for regular passenger
vessels throughout the EU, and a 0,2 % sulphur fuel standard for all EU ports, to reduce the local air
quality impact of SO2, PM and NOx emissions. We also propose to monitor the sulphur content of marine
heavy fuel oil being used throughout the EU by means of the reports on fuel sulphur content required
under this proposal. If necessary, the Commission will then propose measures to reduce ships' SO2
emissions in other sea areas.

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4. CONTENT OF THE PROPOSAL

4.1. Article 1

This Article details each of the proposed amendments to Directive 1999/32/EC.

1. Article 1 of Directive 1999/32/EC is amended: to include an explanatory statement about the extended
scope of the marine fuels provisions; to delete the clause exempting marine heavy fuel oils and marine
gas oils used by ships crossing a frontier between a third country and a Member State; and to introduce
a new clause exempting fuels intended for the purposes of research and testing.

2. Article 2 is amended to update existing definitions and introduce new definitions relating to the marine

fuels provisions.

3. Article 3 is amended to delete existing provisions on combustion plants, including the derogation clause
which expires in 2003, and introduce new provisions which are consistent with Directive 2001/80 on
Large Combustion Plants.

4. Article 4 is amended to remove the existing marine gas oil provisions.

5. A new Article 4a is added to limit the sulphur content of marine fuels used in SOx Emission Control
Areas, and by passenger ships on regular services to or from any EU port, to 1,5 %, and to prohibit the
sale of marine diesel oils having over 1,5 % sulphur.

6. A new Article 4b is added to limit the sulphur content of marine fuels used by ships on inland
waterways and at berth in Community ports to 0,2 % sulphur (0,1 % by 2008), and to prohibit the
sale of marine gas oils having over 0,2 % sulphur (0,1 % by 2008).

7. Article 6 is amended to include the new marine fuels articles in the sampling regime, and specify

marine fuels sampling, analysis and inspection procedures.

8. Article 7 is amended to introduce new reporting requirements for marine fuels, and a requirement for
technologies when IMO guidelines have been

the Commission to consider alternative abatement
developed.

9. A new Article 9a is added to introduce a Regulatory Committee.

4.2. Article 2

This Article concerns the obligations on the Member States to transpose this proposed Directive.

4.3. Article 3

This Article concerns the date of entry into force of the proposed Directive.

4.4. Article 4

This Article addresses the proposed Directive to the Member States.

5. VIEWS OF MEMBER STATES AND STAKEHOLDERS

Earlier this year, two meetings were held with stakeholders, including Member States, candidate and EEA
countries, industry representatives and environmental NGOs. In addition, a written consultation exercise
was held, to which around 40 responses were received. Records of both meetings, lists of participants, a
report on the written consultation, and copies of all non-confidential responses are publicly available at

http://www.europa.eu.int/comm/environment/air/future_transport.htm

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5.1. Summary of views on proposed marine fuels provisions

Member States: Most Member States support a geographically limited ban on the use of high-sulphur
marine fuels, in line with the internationally-agreed SOx Emission Control Area in the North Sea and
the Baltic. Most do not support a EU ban on the sale of high-sulphur marine heavy fuels. Most agree that
the marine gas oil provisions of the directive need to be clarified to be more operational.

Belgium proposes that the sale of non-compliant marine gas oils should be banned, and Italy confirms that
they have already banned the marketing of marine gas oils over 0,2 % sulphur. Finland confirms that its
regular ferries already tend to use 0,5 % sulphur fuel or less. Italy believes a 3 % limit would be more
appropriate for ferries. Greece believes it should exempted from all marine fuels provisions.

EU candidate and EEA countries: Latvia and Poland support a geographically limited ban on the use of
high-sulphur marine fuels, consistent with the SOx Emission Control Area. Romania believe the desig-
nation of the Black Sea as a SOx Emission Control Area should be considered. Norway support a
geographically-limited ban on the use of high-sulphur heavy fuel oils, provided this does not go
beyond the requirements of the SOx Emission Control Area. They support a parallel, or an even more
restrictive, ban on the sale of high sulphur heavy fuel oils.

Shipping industry representatives: (European Community Shipowners Association, International Chamber of
Shipping, Baltic & International Marine Council and Independent Tanker Owners Organisation).
Shipowners' representatives prefer international regulation on marine heavy fuels to EU action. If EU
action is proposed, they believe regulation on fuel sulphur content at the point of sale would be the
most effective way to ensure compliance and availability. They believe the marine gas oil provisions of the
directive need to be amended to exempt fuel contained in the tanks of ships arriving from outside the EU.

industry representatives:

(EUROPIA (European Petroleum Industries Association), CONCAWE (Oil
Oil
Companies' Health, Safety and Environment Organisation) and BP Marine). EUROPIA and CONCAWE
support a geographically limited ban on the use of high-sulphur marine fuels, consistent with the SOx
Emission Control Area, where this would contribute to cost-effective attainment of air quality standards
and reduced exceedances of critical loads. They would not support a ban on the sale of high sulphur heavy
fuel oil. They support the raising of the sulphur limit for marine diesel oils under 1999/32. BP Marine
proposes an emissions trading regime, where the use of SO2 abatement technology is permitted, instead of
a limit on the sulphur content of marine fuels.

(Acid Rain Secretariat, North Sea Foundation, Seas at Risk and the
Non-Governmental Organisations:
European Federation for Transport & Environment). The environmental NGOs support the inclusion of
marine heavy fuel oils in the scope of the directive, and believe a 0,5 % sulphur limit should be applied in
all EU seas, including exclusive economic zones. They would support a parallel ban on the sale of marine
fuels having over 0,5 % sulphur. They agree that the marine gas oil provisions of the directive need to be
clarified and support the exemption for Greece being removed. They believe that market-based instruments
should be developed in parallel with regulation.

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THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 175(1) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social
Committee,

Having regard to the opinion of the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) The Community's environmental policy, as set out in the
action programmes on the environment and in particular
in the Sixth Environmental Action Programme on the
basis of principles enshrined in Article 174 of
the
Treaty, aims to achieve levels of air quality that do not
give rise to unacceptable impacts on, and risks to, human
health and the environment.

(2) Council Directive 1999/32/EC of 26 April 1999 relating
to a reduction in the sulphur content of certain liquid
fuels and amending Directive 93/12/EEC (1),
lays down
the maximum permitted sulphur content of heavy fuel
oil, gas oil and marine gas oil used in the Community.

(3) Article 7(3) of Directive 1999/32/EC calls upon the
Commission to consider which measures could be taken
to reduce
the
combustion of marine fuels other than marine gas oils
and, if appropriate, make a proposal.

contribution to acidification of

the

(4) Emissions

from shipping due to the combustion of
marine fuels with a high sulphur content contribute to
sulphur dioxide and
air pollution in the
form of
particulate matter
and
human
contributing to acidification.

harming

health

(5) Annex VI of

the 1997 Protocol

to amend the Inter-
national Convention for
the Prevention of Pollution
from Ships 1973, as modified by the Protocol of 1978
relating thereto (hereinafter ‘MARPOL Annex VI’) drawn
up by the International Maritime Organization (IMO)
regulates the prevention of air pollution from ships and
makes provision for certain areas to be designated as
Sulphur Oxide Emission Control Areas (hereinafter ‘SOx
the
Emission Control Areas’). To date,
North Sea and the English Channel have been so
designated.

the Baltic Sea,

(6) MARPOL Annex VI will not enter into force until ratified
by at least 15 States representing at least 50 % of world
merchant shipping tonnage, and the IMO in its Assembly
resolution A.929(22) urged governments to ratify Annex
VI and in its Assembly resolution A.926(22) called upon
Governments, particularly of States in whose territory SOx
Emission Control Areas have been designated, to ensure
the availability of low sulphur bunker fuel oil
in areas
within their jurisdiction.

(7) The Marine Environment Protection Committee of the
IMO has adopted guidelines for the sampling of fuel oil
for determination of compliance with MARPOL Annex VI.

(8) Under MARPOL Annex VI,

to develop
guidelines on exhaust gas cleaning systems and other
technological methods to limit SOx emissions in SOx
Emission Control Areas;

the IMO is

(9) Directive 2001/80/EC of the European Parliament and of
the Council of 23 October 2001 on the limitation of
emissions of certain pollutants into the air from large
combustion plants (2) recasts Directive 88/609/EEC, and
Directive 1999/32/EC shall be revised accordingly, as
provided for under Article 3(4) of Directive 1999/32.

(10) A regulatory procedure is necessary for the adoption of
future amendments adapting this Directive to scientific
and technical progress.

(11) Directive 1999/32/EC should therefore be

amended

accordingly.

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 1999/32/EC is amended as follows:

1. Article 1(2) is replaced by the following:

‘Reductions in the emissions of sulphur dioxide resulting
from the combustion of certain petroleum-derived liquid
fuels shall be achieved by imposing limits on the sulphur
content of such fuels as a condition for their use within the
territory of the Member States.

Limits on the sulphur content of marine fuels shall be
imposed as a condition of their use by ships in certain
parts of
the Community. The marketing in Community
territory of marine gas oils and diesel oils having a
sulphur content higher than the levels specified in this
directive shall also be prohibited.

(1) OJ L 121, 11.5.1999, p. 13.

(2) OJ L 309, 27.11.2001, p. 1.

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limitations on the
The
petroleum-derived liquid fuels
Directive shall not, however, apply to:

sulphur
as

certain
content of
laid down in this

(a)

fuels intended for the purposes of research and testing;

(b) fuels intended for processing prior to final combustion;

(c)

fuels to be processed in the refining industry.’

2. Article 2 is amended as follows:

(a)

In paragraph 1,
following:

the first

indent

is replaced by the

‘heavy fuel oil means

3.d. MARPOL Annex VI means the Protocol of 1997
to amend the
the
Prevention of Pollution from Ships, 1973, as modified
by the Protocol of 1978 relating thereto;

International Convention for

SOx Emission Control Areas means the Baltic Sea,
3.e.
North Sea and English Channel as designated by the
International Maritime Organization under Regulation
14 of MARPOL Annex VI.

3.f.
passenger ships means ships which carry more
than 12 passengers, where a passenger is every person
other than:

(i) the master and the members of the crew or other
person employed or engaged in any capacity on
board a ship on the business of that ship; and

— any petroleum-derived liquid fuel falling within CN

code 2710 19 51 to 2710 19 69 (*)’

(ii) a child under one year of age.

(b) In paragraph 2, the first and second indents are replaced

by the following:

‘gas oil means:

— any petroleum-derived liquid fuel falling within CN
code 2710 19 45, 2710 19 49 or 2710 19 25 or
2710 19 29 (*);

or

— any petroleum-derived liquid fuel, of which less than
65 % by volume (including losses) distils at 250 °C
and of which at least 85 % by volume (including
losses) distils at 350 °C by the ASTM D86 method.

___________
(*) These CN codes are specified in the Common
Customs Tariff as amended by Commission Regu-
lation (EC) No 2031/2001 (OJ L 279, 23.10.2001,
p. 1).’

(c) Paragraph 3 is deleted and the following paragraphs 3.a.

to 3.h. are inserted:

marine fuel means any fuel intended for marine

‘3.a.
use as defined in ISO 8217;

marine diesel oil means any fuel

intended for
3.b.
marine use which has a viscosity or density falling
within the ranges of viscosity or density defined for
DMB and DMC grades as defined in Table I of
ISO 8217;

3.c.
marine gas oil means any fuel intended for marine
use which has a viscosity or density falling within the
ranges of viscosity or density defined for DMX and
DMA grades as defined in Table I of ISO 8217;

3.g.
regular services means a series of passenger ship
crossings operated so as to serve traffic between the
same two or more ports, or a series of voyages from
and to the same port without intermediate calls, either:

(i) according to a published timetable; or

(ii) with crossings so regular or frequent

that

they

constitute a recognisable schedule.

3.h.
ships at berth means ships which are stationary in
ports, including while they are loading, unloading and
hotelling.’

3. Article 3 is replaced by the following:

‘Article 3

Maximum sulphur content of heavy fuel oil

1. Member States shall take all necessary steps to ensure
that as from 1 January 2003 within their territory heavy
their sulphur content exceeds
fuel oils are not used if
1,00 % by mass.

2. (i) Subject to appropriate monitoring of emissions by
shall not

requirement

competent authorities
apply to heavy fuel oils used:

this

(a)

in combustion plants which fall within the scope
of Directive 2001/80/EC, which are considered
new in accordance with the definition given in
Article 2(9) thereof and which comply with the
sulphur dioxide emission limits for such plants set
out in Article 4 of that directive and Annex VI
thereto;

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the

thereof, where

(b) in combustion plants which fall within the scope
of Directive 2001/80/EC, which are considered
existing in accordance with the definition given
in Article 2(10)
sulphur
dioxide emissions from these combustion plants
are equal to or less than 1 700 mg/Nm3 at an
in the flue gas of 3 % by
oxygen content
volume on a dry basis, and where,
from 1
January 2008, the emissions of sulphur dioxide
from combustion plants subject to Article 4(3)(a)
of Directive 2001/80/EC are equal to or less than
those
from compliance with the
emission limit values for new plants contained
in Part A of Annex IV to that Directive and
where appropriate applying Articles 5, 7 and 8
thereof;

resulting

(c)

(a) or

in other combustion plants which do not
under
emissions
equal
oxygen content
volume on a dry basis;

fall
(b), where the sulphur dioxide
from those combustion plants are
than 1 700 mg/Nm3 at an
in the flue gas of 3 % by

to or

less

(d) for combustion in refineries, where the monthly
average of emissions of sulphur dioxide averaged
over all plants in the refinery, irrespective of the
type of fuel or fuel combination used, are within
a limit to be set by each Member State, which
shall not exceed 1 700 mg/Nm3. This shall not
apply to combustion plants which fall under (a)
or,
from 1 January 2008, to those which fall
under (b).

(ii) Member States shall take the necessary measures to
ensure that any combustion plant using heavy fuel oil
than that
with a sulphur concentration greater
referred to in paragraph 1 shall not be operated
without a permit issued by a competent authority,
which specifies the emission limits.

3.
The provisions of paragraph 2 shall be reviewed and if
appropriate, revised in the light of any future revision of
Directive 2001/80/EC.’

their territorial seas, exclusive
not used in the areas of
economic zones and pollution control zones falling within
SOx Emission Control Areas if the sulphur content of those
fuels exceeds 1,5 % by mass. This shall apply to all vessels
of all flags, including vessels whose journey began outside
the Community, from twelve months after the date of entry
into force of MARPOL Annex VI, or
from [. . .] (*),
whichever is the earlier.

2. Member States shall take all necessary steps to ensure
that
from 1 July 2007, marine fuels are not used by
passenger ships operating on regular services to or from
any Community port if the sulphur content of those fuels
exceeds 1.5 % by mass. This shall apply to vessels of all
flags.

3. Member States shall take all necessary steps to ensure
that from twelve months after the date of entry into force of
MARPOL Annex VI, or from [. . .] (*), whichever is the
earlier, marine fuels containing no more than 1,5 %
sulphur by mass are made available in sufficient quantities
to meet demand in all Community ports.

4.
From twelve months after the date of entry into force
of MARPOL Annex VI, Member States shall require the
including fuel-
correct completion of
changeover operations, as a condition of ships' entry into
Community ports.

logbooks,

ships'

5. Member States shall ensure that from twelve months
after the date of entry into force of MARPOL Annex VI, or
from [. . .] (*), whichever is the earlier, the sulphur content
of all marine fuels sold in their territory is documented by
the supplier on a bunker delivery note, accompanied by a
sealed sample.

6. Member States shall ensure that marine diesel oils are
not sold in their territory as from [. . .] (*) if the sulphur
content of those marine diesel oils exceeds 1.5 % by mass.

4. Article 4 is amended as follows:

___________
(*) 12 months after entry into force’.

(a)

In paragraph 1, the words ‘including marine gas oils’ are
deleted.

6. The following Article 4b is inserted:

(b) Paragraph 2 is deleted.

‘Article 4b

5. The following Article 4a is inserted:

‘Article 4a

Maximum sulphur content of marine fuels used by
ships
in
on
Community ports

inland waterways

berth

and

at

Maximum sulphur content of marine fuels used in SOx
Emission Control Areas and by passenger vessels
operating on regular services to or from ports in the
European Community

1. Member States bordering SOx Emission Control Areas
shall take all necessary steps to ensure that marine fuels are

1. Member States shall take all necessary steps to ensure
that marine fuels are not used by any ships on inland
waterways or by any ships at berth in Community ports
as from:

— [. . .] (*) if their sulphur content exceeds 0,20 % by mass

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— 1 January 2008 if their sulphur content exceeds 0,10 %

8. Article 7 is replaced by the following:

by mass

2. Member States shall ensure that marine gas oils are
not sold in their territory if the sulphur content of those
marine gas oils exceeds the limits set out in paragraph 1.

‘Article 7

Reporting and review

___________
(*) 12 months after entry into force.’

7. Article 6 is amended as follows:

(a) The following paragraph 1.a. is inserted:

For marine fuels, Member States shall take all
‘1.a.
necessary measures to check that the sulphur content
of marine fuels marketed in the Community and used

— by all

ships

in SOx Emission Control Areas,

Community ports, and inland waterways

report

1.
On the basis of the results of the sampling, analysis
and inspections carried out in accordance with Article 6,
Member States shall by 30 June of each year provide the
Commission with a short report on the sulphur content of
the liquid fuels falling within the scope of this Directive and
used within their territory during the preceding calendar
year. That
the total
number of samples tested by fuel type (heavy fuel, gas oil,
marine heavy fuel oil, marine diesel oil, marine gas oil), and
shall indicate the corresponding quantity of fuel used, and
the calculated average sulphur content. Member States shall
also report on the number of inspections made on board
ships, and record the average sulphur content of marine
fuels used in their territory which do not currently fall
within the scope of the Directive.

include a record of

shall

— by passenger ships on regular services to or from

any Community ports

complies with the relevant provisions of Articles 4a and
4b. Marine fuels being used in other Community sea
areas should also be sampled and the sulphur content
checked. Each of
the following means of sampling,
analysis and inspection shall be used:

— sampling and analysis of the sulphur content of fuel
oil for combustion purposes being delivered for use
on board ships, following IMO guidelines;

— sampling and analysis of the sulphur content of fuel
oil contained in tanks and in sealed bunker samples
on board ships;

— inspection of ships' log books and bunker delivery

notes.

The sampling shall commence within six months of the
date on which the relevant limit for maximum sulphur
content in the fuel comes into force. It shall be carried
out with sufficient frequency,
in sufficient quantities,
and in such a way that the samples are representative
of the fuel examined, and of the fuel being used by
ships while in Community sea areas, ports and inland
waterways.’

2.
On the basis inter alia of the annual reports submitted
in accordance with paragraph 1 and the observed trends in
air quality and acidification, the Commission shall, by 31
December 2010,
to the European
a
Parliament and to the Council. The Commission may
submit with its report proposals for revising this Directive,
in particular as regards the limit values laid down for each
areas where
and the Community sea
fuel
low-sulphur marine fuels are to be used.

category,

submit

report

Taking into account any IMO guidelines on exhaust
3.
gas cleaning systems and other technological methods to
limit SOx emissions, and the effects of such technologies
including the marine environment,
on the environment,
the Commission shall consider which,
if any, alternative
abatement methods might be permissible as alternatives to
the use of low sulphur marine fuels required under Articles
4a and 4b and if appropriate, make a proposal.

4.
Any amendments necessary to adapt the provisions of
this Directive to scientific and technical progress shall be
adopted in accordance with the procedure laid down in
Article 9a but may not result in any direct or indirect
changes to fuel sulphur limits.’

9. The following Article 9a is inserted:

‘Article 9a

(b) In paragraph 2, point (a) is replaced by the following:

Regulatory Committee

‘(a)

ISO method 8754 (1992) and PrEN ISO 14596 for
heavy fuel oil and marine fuels;’

The Commission shall be assisted by a committee
the Member States and

1.
composed of representatives of
chaired by the representative of the Commission.

C 45 E/296

EN

Official Journal of the European Union

25.2.2003

2. Where reference is made to this paragraph, the regu-
latory procedure laid down in Article 5 of Decision
1999/468/EC (*) shall apply,
in compliance with Article
7(3) and Article 8 thereof.

The period provided for in Article 5(6) of Decision

3.
1999/468/EC shall be three months.

___________
(*) Council Decision 1999/468/EC of 28 June 1999 (OJ L

184, 17.7.1999, p. 23).’

When Member States adopt those provisions, they shall contain
a reference to this Directive or be accompanied by such a
reference on the occasion of
their official publication.
Member States shall determine how such reference is to be
made.

Article 3

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 2

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by [. . .] (1) at the latest. They shall forthwith inform
the Commission thereof.

Article 4

Addressees

This Directive is addressed to the Member States.

(1) 12 months after entry into force.