Shipowners operating shortsea ro-ro and container services in the Baltic and North Sea are warning of a huge shift in cargo to road transport unless they are granted an exemption from tough new emission rules that come into force in 2015.

If nothing is done to reverse the Sulphur Emission Control Area regulations, there will be a massive increase in road freight across parts of Europe, with some shipping operations likely to close down rather than face the punishing cost of complying with the 0.1% rule.

The IMO "had no idea what it was doing" when members adopted such requirements for the SECA area, TT Line managing director said as an in-depth analysis published by Bremen's Institute of Shipping Economics and Logistics. Regulators "did not study the consequences" of what they were imposing on the industry, Mr Conzen said.

While shipowners have no objection to cutting sulphur content in marine fuels to 0.5%, as will be required eventually on a global basis, they are adamant the further reduction to 0.1% for certain areas is unworkable. The level is already down to 1% in the SECA zone.

Until now, opponents had no firm evidence to support their views. But the new report - commissioned by the German shipowners' association and German ports association - arms the industry with a powerful lobbying tool.

The study estimates, for example, that ferries to the Baltic states could lose 46% of their traffic. Overall, up to 823,000 TEU and around 604,000 trailers a year would move from sea to land transport if shipowners were compelled to meet the 0.1% figure. In contrast, cutting sulphur content to 0.5% would be both manageable and have a significant impact on emissions without greatly raising costs, the study concludes.

But if regulators refuse to revert to 0.5% for the SECA zone, the only alternative would be to grant an exemption for ships operating in the shortsea trades. He estimates that around 600 ships in intra- Baltic services and in the North Sea, would be eligible.

For those operators that are heavily involved in the North Sea and Baltic shortsea trades, meeting the 0.1% target by 2015 could probably only be achieved by the use of petroleum distillates, and not heavy oil, according to the Bremen study. But the production of distillates is complicated and therefore is more expensive. One estimates put the extra cost at between $3m and $4m a year per ship.

Scrubbers retrofitted on ships could reduce payloads by as much as 15%, while operators would be greatly limited in the charter market when in need to tonnage.

There are also ridiculous anomalies, shipowners will be telling regulators, with a situation in Europe where ships operating in waters to the east of the UK will have to comply with the 0.1% requirement by as early as 2015, whereas those in the Irish Sea on the other side of the country will only have to meet a 3.5% limit up to 2020.

German owners are urging their government to open dissections with the relevant IMO groups about appropriate measures to avoid the "unwanted modal shift" and maintain competitive equality.

    Lloyd's List 15/11/2010