Sulphur Directive into force at the beginning of 2015

Ministry of Transport and Communications
Publication date 12.6.2014 13.20
Press release

Stricter provisions on sulphur emissions from shipping will enter into force at the beginning of 2015. On 12 June, Finland's Government submitted a proposal on the implementation of new climate protection provisions approved by the International Maritime Organization (IMO) and on amendments to legislation required by the EU Sulphur Directive.

The objective of the new provisions is to improve air quality, especially in coastal areas, and the state of the marine environment.

At the start of 2015, the sulphur limit for marine fuels will be cut to 0.1 per cent in SOx emission control areas in the Baltic Sea, the North Sea and North America's sea areas.

Ships can meet with the new provisions by using low-sulphur fuel, installing scrubbers or shifting to the use of alternative fuels, such as liquefied natural gas (LNG).

Emissions from shipping will be monitored by the Finnish Transport Safety Agency, Trafi, the Finnish Border Guard and the police. International cooperation between the coastal states in the Baltic Sea area, the North Sea, and the English Channel will be highlighted in monitoring. Within the EU monitoring of sulphur emissions will be carried out alongside with monitoring of maritime safety by the port states.

In accordance with the Directive the penalty for violating the sulphur provisions must be effective, proportionate and dissuasive. According to the government proposal, the price difference between high and low-sulphur fuels can be considered illegal financial gain that the violator must forfeit to the government. This will be more tangible than fines or other penalties. The same would also apply to shipping companies.

The exact extent of the cost impact of these sulphur provisions will only be known after the provisions enter into force, at which point it will become clear what the price of low-sulphur fuel will be.

A cost estimate by Trafi in 2013 found that the sulphur provisions will increase the costs of maritime transport to Finland by approximately 460 million euros each year, if ships only use low-sulphur fuel and by 120 million euros a year, if scrubbers are installed in ships.

Finland's government has already decided on a number of measures to decrease costs incurred by the sulphur provisions in Finland. Some of these measures are directly related to shipping, others indirectly.

The government has planned to halve fairways dues and suspend railway infrastructure tax for all cargo transport from 2015 to 2017. Finland's corporate income tax was cut at the beginning of 2014 from 24.5 per cent to 20 per cent. The government has also issued an extension on regional transport subsidies spanning to the end of 2017. In 2013 and 2014, the Ministry of Transport and Communications granted subsidies for the procurement of scrubbers.

Further information

Ms Silja Ruokola, Director of Unit for Transport Safety and the Environment, tel. +358 295 34 2367
Ms Lolan Eriksson, Senior Government Adviser, tel. +358 295 34 2493