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Eco-compliance costs darken future of Baltic shortsea shipping

C0NTAINERISED shortsea volumes are expected to drop 10 per cent between 2012 and 2020 because of environmental compliance costs, but then rise to 2012 levels as subsidies and efficiencies are expected to effect a comeback, according to a St Petersburg PortNews analysis.

Eco-compliance costs darken future of Baltic shortsea shipping
04 September 2014 - 19:06

Eco-compliance costs darken future of Baltic shortsea shipping

C0NTAINERISED shortsea volumes are expected to drop 10 per cent between 2012 and 2020 because of environmental compliance costs, but then rise to 2012 levels as subsidies and efficiencies are expected to effect a comeback, according to a St Petersburg PortNews analysis.

"The forecast for 2020/2030 is rather bleak due to the shifts induced by the new SECA [Sulphur Emissions Control Area] regulations," said the PortNews analysis. 

"Assuming that the additional costs for meeting the stricter sulphur emission standards are eventually borne by the clients, we assume a shift towards routes with shorter sea distances (eg ferries) or direct land traffic," it said.

The partial comeback was predicted on the basis of state subsidies and increased shipping efficiencies. 

Costly low sulphur fuel is US$100 a tonne versus $60 for standard bunker, very expensive for shortsea operators whose entire voyages are within the eco-control zones in northern Europe and North America.

"Emission-based bonuses" cited were based on "model calculations and a 30 per cent fuel cost reduction, which would almost even out the additional costs of the SECA regulation that could increase the shortsea potential by 17-18 per cent in the forecast years to 235,000 TEU in 2030". 

Also assumed was state-subsidised container handling. "According to the modal shift model, a EUR10 (US$13.14) subsidy on handling in EU ports would add some seven to eight per cent (80,000 TEU in 2020 and 100,000 TEU in 2030)."

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