COMMISSION STAFF WORKING PAPER SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-07-15
Institutions: European Commission
Subjects: air quality, diesel fuel, international standard, pollution control, quality of the environment, sulphur

EUROPEAN COMMISSION 

Brussels, 15.7.2011 
SEC(2011) 919 final 

COMMISSION STAFF WORKING PAPER 

SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying document to the 

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 

{COM(2011) 439 final} 
{SEC(2011) 918 final} 

 
 
 
 
  
  
 
1. 

POLICY  CONTEXT,  PROCEDURAL  ISSUES  AND  CONSULTATION  OF  INTERESTED 
PARTIES 

This impact assessment accompanies a proposal for an amendment to Directive 1999/32/EC 
on  the  sulphur  content  of  certain  liquid  fuels.  In  preparation  of  this  amendment  the 
Commission conducted an online consultation open to all interested parties. The Commission 
also  consulted  regularly  with  representatives  from  Member  States  and  with  other 
stakeholders.  

Air pollution causes damage to human health and to the environment where we live. The EU 
acts on various fronts to reduce air pollution. As a result of this action emissions of most air 
pollutants  have  been  reduced  over  the  previous  years  and  decades,  including  emissions  of 
sulphur  dioxide  (SO2),  nitrogen  oxides  (NOx),  volatile  organic  compounds,  ammonia  and 
particulate  matter  (PM).  The  greatest  share  of  these  reductions  has  been  achieved  by  land-
based emission sources such as industrial plants or road transport. Still, evidence shows that 
further  reductions  of  such  pollutants  will  deliver  significant  benefits  to  the  health  of  EU 
citizens and to the environment, while being cost-effective.  

Maritime sources have historically been addressed to a much more limited extent than land-
based  sources.  However,  as  emissions  of  air  pollutants  can  travel  large  distances  many 
maritime emissions will have an impact on land, especially where they take place close to the 
shore.  It  has  been  projected  that  without  further  regulatory  action  the  continued  growth  in 
emissions  of  SO2  and  NOx  from  the  maritime  sector  will  surpass  total  emissions  of  these 
pollutants from all land-based sources by 2020.1 Taking into account the historical lag in the 
regulation  of  pollution  in  this  sector  the  cost-per-tonne  of  reducing  pollution  from  ships  is 
currently significantly lower than for land-based sources. 

Directive 1999/32/EC (as amended by Directive 2005/33/EC) regulates the sulphur content of 
fuels used by maritime transport and incorporates certain international rules into EU law, as 
agreed under the International Maritime Organisation (IMO). In particular, the Directive in its 
current form incorporates the more stringent rules on the sulphur content of marine fuels to be 
used  in  areas  in  need  of  special  environmental  protection,  the  Sulphur  Emission  Control 
Areas2  (SECAs).  The  sulphur  content  of  a  liquid  fuel  essentially  determines  the  SO2 
emissions  released  in  the  combustion  of  that  fuel,  i.e.  the  combustion  of  low  sulphur  fuels 
leads to low levels of SO2 emissions. Equally, a reduction of SO2 emissions can be achieved 
by using higher sulphur fuels in combination with emission abatement methods.  

Already  at  the  time  of  the  adoption  of  the  2005  amendment  to  the  Directive  the  EU's  co-
legislators,  foreseeing  the  need  for  further  reduction  of  shipping  emissions,  called  on  the 
Commission to review the relevant legal requirements on the sulphur content of liquid fuels. 
With strong support from Member States, IMO rules on air pollution from ships, including for 
SO2,  have  been  revised  in  October  2008.  These  rules  are  contained  in  Annex  VI  of  the 
Marine Pollution Convention 73/78 (MARPOL Annex VI).  

1 

2 

SEC (2005) 1133: Commissions Staff Working Paper accompanying the Communication on Thematic 
Strategy on Air Pollution (COM(2005)446 final) and the Directive on Ambient Air Quality and Cleaner 
Air for Europe(COM(2005)447 final).  
In the EU SECAs cover the Baltic and North Seas and the English Channel. 

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2. 

GENERAL PROBLEM CHARACTERIZATION AND OBJECTIVES 

2.1. 

General problem characterization 

The  most  significant  changes  to  IMO  MARPOL  Annex  VI  in  the  2008  revision  addressed 
SO2 pollution. In brief: 

(1) 

A reduction from 1.50% by weight of the sulphur content of all marine fuels used in 
SECAs 

– 

– 

to 1.00% by 1 July 2010; 

to 0.10% by 1 January 2015; 

(2) 

A  reduction  from  4.50%  by  weight  of  the  sulphur  content  of  all  marine  fuels  used 
globally outside of SECAs (the 'global standard'). 

– 

– 

to 3.50% by 1 January 2012;  

to 0.50% by 1 January 2020 subject to review in 2018, with a possible 
delay to 2025; 

(3) 

Allowing access to a broad range of emission abatement methods ('equivalents'), such 
as equipment, methods, procedures or alternative fuels. 

The IMO MARPOL Annex VI 2008 revision offers an estimated €15 to €34 
billion in benefits 
to the EU in improved health and reduced mortality. The costs of implementing the revision 
offers benefits that are three to thirteen 
range from €2.6 to €11 billion. As such the revision 
times greater than the costs. 

MARPOL Annex VI also introduces provisions on NOx emissions and allows for the creation 
of NOx Emission Control Areas (NECAs). 

The  new  MARPOL  Annex  VI  rules  on  sulphur  are  now  significantly  different  from  the 
1999/32/EC Directive: 

–  the Directive allows ships to use fuels with a sulphur content of up to 1.5% when operating 
in the SECAs, while the new MARPOL Annex VI allows a maximum sulphur content of 
1.00% and as of January 2015 a maximum sulphur content of 0.1%;  

–  the Directive offers a strong operator compliance mechanism, while MARPOL Annex VI 

has no such enforcement mechanism; 

–  the Directive allows for a limited range of equivalent emission abatement methods when 

compared to the revised MARPOL Annex VI.  

In addition to the alignment of the Directive with IMO rules, the review of the Directive has 
identified a number of other issues. In particular, it showed that certain weaknesses exist in 
the enforcement provisions of the Directive (on sampling and reporting) and that certain other 
provisions,  such  as  the  definition  of  'port  area',  of  'passenger  ships  on  a  regular  service'  or 
what  method  is  to  be  used  for  the  statistical  interpretation  of  the  verification  of  the  sulphur 
content of marine fuels , are unclear.  

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2.2. 

Objectives 

The  general  objectives  are  to  ensure  that  the  health,  environmental,  and  safety  benefits 
associated  with  the  IMO's  agreement  on  reducing  the  negative  impacts  of  air  pollutant 
emissions  from  shipping  are  delivered  in  practice;  and  that  the  proper  functioning  of  the 
internal  market  for  maritime  shipping,  EU  ports,  and  fuels  and  emission  abatement 
technologies used in shipping is ensured. 

To achieve the general objectives, three specific objectives must be met: 

(1) 

(2) 

(3) 

To ensure alignment of EU law with the latest international rules on maritime 
fuels and pollution, including the adaptation to advanced technical standards 
and technologies;  

To  identify  additional  and/or  alternative  measures  for  reducing  the  negative 
environmental impact of emissions from maritime shipping on human health 
and the environment;  

To  strengthen  and  enhance  the  implementation  of  the  EU  monitoring  and 
enforcement regime, ensuring compliance with the Directive.  

Chapters  3  to  5  of  this  executive  summary  present  four  main  recommendations  for  the 
amendment  of  the  Directive.  Other  issues  related  to  the  revision  of  the  Directive  are 
summarised in Chapter 6. 

3. 

TRANSPOSITION OF THE REVISED IMO RULES INTO EU LAW 

Specific problem definition 

The  Directive  is  no  longer  aligned  with  international  (IMO)  rules  following  the  revision  of 
MARPOL Annex VI in 2008. 

Analysis of the options 

Ten options have been considered in the impact assessment to address the misalignment of the 
Directive with MARPOL Annex VI, leading to the following recommendations: 

• 

Incorporate the 2008 IMO amendment of MARPOL Annex VI relating to the sulphur 
content of marine fuels in the Directive.  

•  Align the Directive with the IMO provisions that allow a broader range of equivalent 
emission abatement methods. Complement these provisions with additional safeguard 
measures to ensure that equivalent abatement methods have no unacceptable adverse 
impact on the environment. 

•  Adopt IMO fuel verification procedure.  

The  combination  of  these  options  would  align  EU  rules  with  the  international  rules  on  the 
sulphur  content  of  marine  fuels.  Incorporating  the  international  fuel  standards  and  their 
verification  procedure  into  EU  law  would  strengthen  the  effectiveness  of  these  standards  as 

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they  would  be  monitored  and  enforced  under  the  EU  compliance  regime,  which  is  more 
effective than the international system. Moreover, extending access to and promoting the use 
of  innovative  emission  abatement  methods  as  an  equivalent  compliance  option  would 
significantly  lower  the  IMO  compliance  costs  (by  50%  to  88%)  and  promote  innovative 
industry solutions, in line with the priorities of the Europe 2020 Strategy and Article 3 of the 
Treaty on the Functioning of the European Union. Therefore, the transposition of the revised 
IMO rules would ensure that the environmental and economic objectives motivating the IMO 
amendment  are  effectively  delivered  in  a  harmonized  and  cost-effective  manner  across  the 
EU.  

4. 

ENVIRONMENTAL STANDARDS FOR PASSENGER SHIPS ON REGULAR SERVICE 

Specific problem definition 

The current Directive requires passenger ships operating on a regular service outside SECA 
areas to comply with the same sulphur in fuel standards as ships operating in SECA areas, i.e. 
with  the  1.5%  standard  which  was  applicable  before  the  2008  IMO  MARPOL  Annex  VI 
revision.  This  standard  is  not  part  of  MARPOL  Annex  VI  and  exists  at  EU  level  only.  The 
provision was introduced into the Directive as passenger ships operate mostly in ports or close 
to  coastal  areas  and,  as  such,  generally  have  a  greater  negative  human  health  and 
environmental  impacts  than  other  types  of  ships.  At  the  time  the  1.5%  standard  was 
introduced for passenger ships the same fuel quality standard was applicable in SECAs and, 
hence, fuel availability was ensured. However, with the introduction of 0.1% sulphur content 
requirements  in  SECAs  from  2015,  the  costs  and  benefits  of  maintaining  or  changing  the 
Directive's provisions on passenger ships operating on a regular service outside SECAs need 
to be reassessed, both on the basis of fuel availability and of the benefits and costs of sulphur 
in fuel standards for those ships. 

Analysis of the options 

Four options were assessed, leading to the following recommendation: 

•  Restore the link with the SECA sulphur content in fuel provisions for passenger ships 
operating outside SECA areas by introducing the new 0.1% limit in 2020 (rather than 
in 2015). 

Aligning  the  requirements  for  passenger  ships  operating  on  a  regular  service  outside  SECA 
areas  with  the  0.1%  standard  in  SECAs  would  deliver  further  human  health  and 
environmental  benefits  exceeding  costs.  However,  the  impact  assessment  recommends 
introducing a new SECA standard for passenger ships with a 5 year delay from 2015 in order 
to  avoid  potential  problems  with  fuel  availability.  The  benefit  to  cost  ratios  for  the 
recommended option range from 1.5 to 6 (2020) and from 0.8 to 10 (2025).  

5. 

ISSUES RELATED TO COMPLIANCE MONITORING AND REPORTING 

Specific problem definition 

The  current  frequency  of  sampling  is  too  low  (typically  once  per  one  thousand  ships)  and 
there  is  evidence  of  significant  levels  of  non-compliance  with  some  of  the  sulphur  in  fuels 

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obligations  of  the  Directive.  As  a  result,  and  also  due  to  the  lack  of  harmonised  rules  on 
reporting,  the  reports  submitted  by  Member  States  make  the  assessment  of  compliance 
difficult.  

Analysis of the options 

Four options were assessed. The impact assessment makes the following recommendation: 

• 

Foresee  developing  a  nonbinding  guidance  on sampling  and  reporting  at  a  first  stage 
and, should this approach fail, consider adopting binding rules.  

This option would seek to improve compliance levels through a soft instrument. Failing that, 
binding provisions would be introduced regulating sampling frequencies, methods of analysis 
and the content and the format of Member States' reports. 

6. 

OTHER RELEVANT ISSUES FOR THE REVISION OF THE DIRECTIVE 

The impact assessment also considers a number of other issues for revision. 

6.1. 

Adapting the Directive to technical progress  

The impact assessment suggests aligning references and definitions in the Directive with the 
latest international technical standards (such as ISO). 

6.2. 

Improving legal clarity and certainty 

The  impact  assessment  suggests  clarifying  the  definitions  of  'passenger  ships  on  a  regular 
service' and 'port area' by means of guidance to be issued by the Commission.  

6.3. 

Supplementary  measures  to  address  disproportionate  impacts  on  short  sea 
shipping 

An overview of the studies on the impact of the 0.1% sulphur requirement in SECAs on short 
sea shipping concludes that this provision could have some effects on shipping patterns. Such 
effects may justify certain mitigating measures.  

The impact assessment recommends:: 

On a short term, to adapt the existing EU instruments to specifically target undesired impacts 
on modal backshift. This would allow for measures to support the short-sea shipping industry, 
with the objective of reducing undesirable modal shift from sea-based to land-based transport.  

On the medium and longer term, specific measures could be considered provided additional 
assessment would be carried out.  

6.4. 

Designation of new Emission Control Areas 

Current evidence indicates that extending ECA coverage to other EU maritime areas is likely 
to  offer  positive  net  benefits.  This  would  also  address  competitiveness  concerns  associated 
with  differing  environmental  standards  in  EU  sea  areas.  In  addition,  the  2008  MARPOL 
Annex  VI  revision  introduced  the  possibility  of  establishing  NOx  Emission  Control  Areas 

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(NECAs) and to set emission standards for NOx and, in the future, PM. The creation of a new 
ECA would have to be compliant with specific criteria established by the IMO. 

However, the Commission does not have the competence to propose Emission Control Areas 
to IMO. Moreover, the emission limit values for NOx and PM are engine-related standards. 
Their introduction into EU law would require either an extension of the Directive's scope, as it 
currently  regulates  only  sulphur  fuel  standards,  or  the  adoption  of  a  new  instrument.  This 
could be considered in the future, taking into account developments at IMO. At the moment 
the preferred option is that no new ECAs are introduced and the Commission will continue to 
support  Member  States  in  further  developing  proposals  for  additional  ECAs  and  emission 
limit values for submission to IMO. 

7. 

CONCLUSION 

The  new  international  limit  values  for  the  sulphur  content  of  marine  fuels  are  expected  to 
significantly reduce emissions of sulphur dioxides from the maritime sector. This will greatly 
contribute  to  achieving  the  general  environmental  objectives  stated  in  the  2005  Thematic 
Strategy on Air Pollution and is in line with the priorities of the Europe 2020 Strategy3. It will 
furthermore  yield  ancillary  benefits  in  terms  of  reducing  emissions  of  NOx  and  particulate 
matter.  The  international  rules  will  deliver  human  health  benefits  that  are  three  to  thirteen 
times  greater  than  the  costs,  plus  other  significant  benefits  related  to  environmental 
improvements.  Also,  for  the  purpose  of  promoting  compliance  with  existing  ambient  air 
quality  limit  values,  a  problem  for  several  Member  States  currently  facing  infringement 
procedures, it is essential to ensure that these projected benefits materialise.  

The  impact  assessment  confirms  the  cost-effectiveness  of  a  full  alignment  of  the  Directive 
with the IMO rules on fuel standards, including the standards applicable outside SECAs, and 
with  the  provisions  on  emission  abatement  methods.  Incorporating  the  international  fuel 
standards into EU law would strengthen the effectiveness of these standards as they would be 
monitored and enforced under the EU regime, which is more effective than the international 
system.  The  proposed  extension  of  the  use  of  innovate  emission  abatement  methods  as  an 
equivalent  compliance  option  addresses  concerns  about  the  cost  implications  resulting  from 
the new IMO rules. The use of such methods significantly lowers IMO compliance cost and 
promotes innovative industry solutions, in line with the priorities of the Europe 2020 Strategy 
and  Article  3  TFEU.  Furthermore,  the  impact  assessment  recommends  maintaining  the  link 
between  the  stricter  fuel  standards  in  SECAs  and  those  applicable  to  passenger  ships  on  a 
regular  service  outside  SECAs.  However,  the  introduction  of  a  new  SECA  standard  for 
passenger  ships  would  be  delayed  by  5  years,  in  order  to  avoid  potential  issues  with  fuel 
availability. 

Also,  increasing  the  effectiveness  of  the  EU's  monitoring  and  enforcement  regime  is 
particularly important considering that the significantly stricter fuel standards, with associated 
higher compliance costs, may increase the incentives for non-compliance by economic agents. 

3 

Communication  from  the  Commission,  Europe  2020  A  strategy  for  smart,  sustainable  and  inclusive 
growth, COM(2010) 2020 final. 

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Finally,  the  impact  assessment  suggests  that  the  European  Commission  and  Member  States 
use  and,  where  possible  or  necessary,  adapt  existing  public  support  instruments,  to  assist 
industry in the transition towards the new IMO standards.  

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