Opinion of the European Economic and Social Committee on the "Proposal for a Directive of the European Parliament and the Council amending Directive 1999/32/EC as regards the sulphur content of marine fuels" (COM(2002) 595 final — Vol. II — 2002/0259 (COD))
Date: 2003-05-14
Institutions: European Economic and Social Committee
Subjects: EU environmental policy, air quality, fossil fuel, pollution control measures, sulphur, vessel

3.9.2003

EN

Official Journal of the European Union

C 208/27

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the
European Parliament and the Council amending Directive 1999/32/EC as regards the sulphur
content of marine fuels’

(COM(2002) 595 final — Vol. II — 2002/0259 (COD))

(2003/C 208/06)

On 10 December 2002 the Council decided to consult the European Economic and Social Committee,
under Article 251 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 1 April 2003. The rapporteur
was Mr Retureau.

At its 399th plenary session on 14 and 15 May 2003 (meeting of 14 May), the European Economic and
Social Committee adopted the following opinion by 101 votes to 2 with 8 abstentions.

1. Commission proposal

Channel and the Baltic Sea (SOx emission control areas =
SOxECAs), in line with MARPOL Annex VI (1);

1.1.

Environmental impact of burning marine fuels containing
sulphur

Emissions of sulphur dioxide (SO2) and secondary
1.1.1.
inorganic sulphate particles formed as a result of its oxidation,
as well as of primary soot particles and nitrogen oxides (NOx),
are given off
into the atmosphere when fossil fuels that
naturally contain sulphur are burnt in ships’ engines. These
emissions can damage human health and the environment
(acidification, damage to sensitive environments and certain
materials, formation of ground-level ozone).

1.1.2.
The impact of ships’ emissions on exceedances of
critical loads of acidity is particularly noticeable in countries
bordering on the North Sea, the Baltic Sea, the English Channel
and the Irish Sea. In northern European countries, maritime
transport contributes to exceedances of critical loads of acidity
by more than 50 % in most coastal areas, while in the EU as a
whole ships’ emissions are responsible for 20-30 % of the air
concentrations of secondary inorganic particles in most coastal
areas, according to a study commissioned by the Commission.

Ships’ emissions as a whole have a measurable
1.1.3.
harmful impact on human health throughout the European
Union, in terms of effects on mortality and morbidity (illnesses,
including exacerbation of asthma, higher incidence of bron-
chitis and heart failure).

1.2. Aims of the proposal

— introducing a 1,5 % sulphur limit for marine fuels used
by passenger vessels on regular services to and from any
Community port, in order to improve air quality around
ports and coasts, including outside the emission control
areas defined in MARPOL Annex VI, and to create
sufficient demand to ensure an EU-wide supply of low
sulphur fuel;

— introducing a 0,2 % sulphur limit

for fuel used by
seagoing vessels at berth in Community ports and by
inland vessels,
in order to reduce local emissions of
sulphur dioxide and particulate matter and improve air
quality locally.

1.2.2.
amendments concerning marine fuels:

Two other types of amendments supplement the

— 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.

1.2.1.
The proposal aims to reduce ships’ emissions of
sulphur dioxide and particulate matter by amending Directive
1999/32/EC and, in particular, by:

— introducing a 1,5 % sulphur limit for marine fuels used
by all seagoing vessels in the North Sea, the English

(1) Convention of the International Maritime Organisation (IMO) for
the prevention of marine pollution; to enter into force, Annex VI
must be ratified by at least 15 flag states representing at least 50 %
of the gross tonnage of the world’s merchant shipping. Only 25 %
of the gross tonnage is represented so far, but the expected date
of entry-into-force has been brought closer by the announcement
that Panama is going to ratify.

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Official Journal of the European Union

3.9.2003

1.3. Cost-benefit analysis

1.3.1. With regard to the cost to EU refiners of producing
lower sulphur marine fuels, it has been shown that the greater
the quantity of low sulphur fuels produced, the greater the
unit production costs per tonne. This means that as the
demand for low sulphur fuels rises, so does the price.

1.3.2.
The Commission assumes that the costs borne by
Community refiners will be passed onto shipowners in the
form of higher fuel prices. The annual incremental cost of the
SOxECA proposal for 2006 is assumed to be (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 annual incremental cost of
the in-ports proposal for 2006 is assumed to be (2,3 m ×
EUR 57,75) = EUR 133 m. From 2008, the sulphur limit will
decrease from 0,2 % to 0,1 % and consumption will increase
to 2,4 million tonnes. The annual incremental cost of the in-
ports proposal for 2008 is assumed to be (2,4 m × EUR 2) =
EUR 4,8 m.

1.3.3.
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 for human health
and the environment.

1.3.4.
In its quest to weigh up the costs against the benefits
in money terms, the Commission thinks that some of the
effects can be monetised by attaching a benefit to each tonne
of pollutant reduced but that others (acidification) cannot be
monetised. Nevertheless,
it concludes that on balance its
proposals will have a positive impact.

1.3.5.

The annual net benefits are estimated to be:

— EUR 645 721 000 for the SOxECAs (2006);

— EUR 209 400 000 for the passenger vessels proposal

(2007);

— EUR 787 975 000 and EUR 26 194 000 for the in-ports

proposal (2006 and 2008).

1.3.6.
This is based on a conservative estimate which does
not take account of the fact that of the 50 ports with the
highest emissions, ten have a population of around 500 000 or
more. Of these, five are European capitals and four have a

population of one million or more.
the
monetised benefit per tonne of SO2 and PM reduced will be 5
to 15 times greater than that used for the purpose of the
cost-benefit analysis, because more people benefit from the
emissions reductions.

In these areas,

1.3.7.
Reducing the sulphur content of 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. Consequently, the Commission
has not taken CO2 into account in its cost-benefit analysis.

2. General comments

2.1.
The Committee approves the aim of the Commission’s
proposals, which seek to reduce the pollution caused by
emissions from ships’ engines.

It notes that these proposals comply with the pro-
2.2.
visions in Annex VI of the MARPOL Convention, although the
number of countries that have ratified Annex VI so far and the
commercial tonnage they represent show that the hopes of a
rapid entry-into-force are too optimistic unless IMO members
display more political will.

2.3.
The Committee firmly hopes that all the EU member
countries and candidate countries which have not yet ratified
MARPOL Annex VI will consider all the opportunities available
to them for doing so as soon as possible. Annex VI is an
important instrument for protecting human health and the
environment, which are particularly under threat in all port
areas (especially when they are densely populated) and numer-
ous countries (especially the coastal states of the North Sea,
the English Channel, the Baltic Sea and the Mediterranean
countries).

2.4.
It considers that the Commission proposals for reduc-
ing the sulphur content of marine fuels constitute a strong
political case worldwide in favour of
the ratification of
Annex VI and that they are likely to speed up the entry-into-
force worldwide of the MARPOL provisions for reducing
emissions of SO2, NOx and particulate matter resulting from
the combustion of heavy fuel oils and marine gas oils.

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2.5.
The Committee thinks that the maximum limit of
1,5 % is fair at the present stage and that opting for this ceiling
is bound to speed up its entry-into-force worldwide. This will
soon put an end to the main source of distortions of
competition with third countries, because they will be subject
to the same constraints.

2.6.
In order to obtain limits below 1,5 % (such as 1 % or
0,5 %) for heavy fuel oils for vessels, it would be necessary to
use much more costly methods of refining, which would have
a much higher energy consumption and produce higher CO2
emissions.

running costs. Even though not all of these major benefits are
easy to evaluate in money terms, the balance is firmly in favour
of the proposed measures to reduce sulphur and particulate
matter.

2.9.
Environmental protection and the protection of human
health are prominent among the main EU objectives and are
of direct interest to the inhabitants of present and new member
states. The Committee therefore gives its unreserved support
to the Commission’s proposals, which in its eyes are realistic
and proportionate. It is politically desirable to implement these
proposals as soon as possible.

2.7.
The 0,2 % limit for vessels at berth and inland shipping
is fully justified in ports in urban areas and in terminals far
away from urban centres, where the consequences of pollution
are just as serious for sailors, dockers and all the personnel
and users in the port areas as well as neighbouring firms,
passengers and residents living close by. The Committee
therefore approves the general application of this ceiling, as
proposed by the Commission. It also recommends with a view
to facilitating its application that the Commission evaluates
how vessels can best be adapted to this ceiling from the
technical, safety and environmental point of view.

2.8.
The cost-benefit analysis provides valuable economic
indications about the incremental cost of the new maximum
limits on sulphur content for maritime operators and hence
for the final customers of the goods being transported.
However, the general benefits in terms of human health and
life expectancy and in terms of protecting fragile environments
in northern Europe threatened by acid rain clearly outweigh,
in the Committee’s view, the extra cost of refining and vessels’

Brussels, 14 May 2003.

3. Specific comments

3.1.
So that the proposed measures are more effective, the
engines of new vessels should be designed or adapted to the
new composition of the fuels so as to make them more
energy-efficient and reduce CO2 emissions, thereby eventually
compensating for a possible increase in CO2 emissions from
refineries as a result of desulphurisation operations.

3.2.
The Committee is not proposing, at this stage, limits
lower than those proposed by the Commission, which rep-
resent a reduction of about one half compared with the average
sulphur content of fuels at present (close to 3 %). This is
because the draft effectively supports the aim of having the
1,5 % limit applied universally as soon as possible. This must
not stop new drafts being planned subsequently, and the
Committee encourages the Commission and the member
countries to work in that direction, especially within the IMO
framework.

The President

of the European Economic and Social Committee

Roger BRIESCH