Consultation Comments Table -Impact Assessment 8 December 2014

8/20/2019 Consultation Comments Table -Impact Assessment 8 December 2014

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SULPHUR CONSULTATION RESPONSES – IMPACT ASSESSMENT

Respondent Datereceived

Summary of Comments Response

Swiss Marine 08/05/14 (See Regulation table)

EGCSA 13/05/14 Many Scrubber manufacturers have ensured thatmonitoring of systems is a design feature to ensurecompliance.

This is a minor amendment which hasbeen reflected in the IA. (MCA)

Class NK 21/05/14 (See Regulation table) Noted.

Nautilus International 04/06/14 Regarding the availability of low sulphur fuel, Nautilusrefer to paper MEPC 66/4/18 jointly submitted to theIMO by the Netherlands and the UK which states‘Currently the signals received from the market do notsuggest there will be problems with the availability oflow sulphur fuel in 2020. The analysis by somerefineries shows the refining capacity in 2020 will

actually exceed the demand and thus reduce the pricefor diesel.’ With this in mind Nautilus anticipate thatship owners will not have any significant issues insourcing compliant fuel and therefore, the number ofvessels granted an exemption under paragraph 7 ofthe draft MSN would be very low.

(See also Regulation table)

These comments have been reflectedin the IA where appropriate

MOD - Defence SafetyEnvironment Authority

12/06/14 (See Regulation table) Noted.

UK Chamber of Shipping 18/06/14 Costs associa ted wi th fue l swi tch ing

Do not accept that the costs associated with fuelswitching have already been met

They believe availability of low sulphur fuel is likely tobe a financial issue and the reasons are detailed intheir response.

They are not aware of any other costs that have not

These comments have been reflectedin the IA where appropriate

Noted.

Noted.


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question the infrastructure in place to support themove. Also may be regulatory concerns which willdeter investors.

Health benefi ts

Fully support measures aimed at improving health ofcitizens.

Other benefi ts

Agree with the environmental benefits but point out theneed to recognize negative environmental impactssuch as those quoted in the AMEC report egcongestion, infrastructure, accidents, local air qualityetc.

Enforcement

Enforcement should be both appropriate and thepenalties proportionate.

General comm ents

Question who the ‘polluter’ is with respect to the‘polluter pays’ principle. They consider the IA paintsshipping in an unfavourable light.

Need to clarify what is meant by European waters.

The Chamber sets out in its response its strategy for

transitional arrangements.

They want a short defined transition period ending on1 January 2020.

recognised.

Noted.

Noted.

The SI follows normal statutorypenalties – however, there is theoption for cases to be referred to thecrown court where the penalties may

be more severe.

The ‘polluter’ will be the shippingindustry as they are the ones burningthe fuel. This is not intended asprejudicial language.

This has been reflected in the IAwhere appropriate.

There is no scope in MARPOL or the

Directive to adapt the transitionalarrangements. Noting the Chambersconcerns a significant additionalsection has been added to the IAaddressing this.

Lloyds Register – External Affairs

19/06/14 (See Regulation table) Noted.


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DFDS 23/06/14 Section 1.5 paragraph 2 states the negative impactsdue to acid rain. DFDS point out that EU document"COM (2013) 918 final" concerning the clean airprogram for Europe, states "The acid rain("acidification") problem has been broadly solved in theEU, thanks to a substantial reduction in emissions ofthe main pollutants involved"

Section 1.6 paragraph 2 refers to "unrefined fuel" whichthey believe is the same as crude oil. They refer to a 2005report which states that the shipping sector is expected to beresponsible for over 50% of sulphur emissions in the EU by2020. The source for this information is a report published in2005 that does not take in to account the additionalrestrictions imposed on shipping in the period between thereport and current date. During this period shipping, with inthe SECA area, has been subject to a 70% reduction in thesulphur content of the permissible fuel and the projectionsmade in this report can thus no longer be considered valid.The original report in which this statement was publishedwas" Brussels, 21.9.2005 SEC (2005) 1133". In this reportthe forecasted SOx level from EU 251 in 2020 is 3.526 mill.ts. It is generally accepted that the global consumption ofmarine fuel is around 300 mill. ts p.a. In 2020 the maximumsulphur content will be 0.5% in EU waters and likely also inthe rest of the World as per Marpol Annex VI. So the globalemission in 2020 should be around 1.5 mill ts., less than halfof the forecasted EU 25 emission on which thisstatement is based and which Is a key argument for thislegislation.

Section 2 deals with PM effect. It is correct that changingfrom 1.0% sulphur fuel to 0.1% sulphur fuel will reduce theoverall PM level. DFDS claim that the IA does not elaborateon is the size of the PM’s. Smaller PM's are more harmful tohuman health and can travel over longer distances and thus

a net benefit to society may not be evident.

Section 5.1.1 sub-item item 1 specifically mentions"Seawater scrubbers”. DFDS point out there are other typesof scrubbers.

Section 5.1.4. DFDS point out that when evaluating thefuture fuel consumption, the EU White Paper on Transportthat specifies the requirement for transfer of a significant

The widespread success in reducingsulphur has resulted in significanthealth improvements. This does notmean that shipping does not have toalso make reductions.

This has been taken intoconsideration on the IA whereappropriate

Modelling was carried out for this in2008.

Noted

This amendment has been made


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portion of road transport to other modes of transport has notbeen considered.

Section 5.1.5. Top of page 15 speculates in that a vesseloperator could choose not to operate a scrubber althoughinstalled and this cannot be checked. This isnot correct. To date all scrubbers installed have the so-called"Type B" approval.

Given the lead time for such installations it is alreadyclear how many vessels globally will be able to comply withthe new sulphur regulations through other means thatoperating on low sulphur (0.1%) gas oil.This number is very low approximately 17000 differentvessels trade within the North European SECA every yearand in 2015 less that 200 of these will have ascrubber installed or operate on alternative fuels such asLNG.

Scrubbers require significant investments and their pay-backnot only depends on the futu re difference between the pricein the various fuel grades. DFDS refute the statementsection 5.1.5 3rd paragraph, where the assumption is madethat scrubbers will reduce in price by 50% by 2020.

Section 5.2.3 and section g. DFDS are very concernedabout the assumption that the MCA will be able to carry outan effective enforcement without a change to currentpractice

This has been reflected by other partsof industry and has been expanded inthe IA.

The 50% value was based onprevious consultation work with

industry and manufacturers and hasbeen reviewed.

The Directive will be implemented andenforced within current budgets.

BP Shipping Ltd 24/06/14 They believe the case to explore development andutilisation of alternative fuels is valid, but should not beoverstated (including methanol and LNG)

They agree that there is good potential for LNG to be

used as the marine fuel in the long run (beyond 2020),The 2020 - 0.5% low sulphur fuel implementation dateand other regulatory measures (e.g., safety andhandling specification) will help facilitate future LNGinvestments.

Other alternative sources of fuel mentioned in theconsultation such as methanol, bio-diesel etc. that are


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derived from bio-feedstock warrant stringent testingand safety assessments prior to be considered as areliable source of marine fuel. These alternatives inour opinion do have potential, but certainty of supplywill be the key to determine their suitability, as shipswould need to bunker frequently.

In respect to marine fuel availability and pricing; it istheir view that this is dependent upon various driversof supply and demand within the global fuel markets,including the market for fuel substitutes.

They refer to the fact that Aviation sulphur limits of 15ppm (down from 3000 ppm) could be achieved by2020 (based on the US funded studies). BP believethat use of that example in the shipping context is notentirely relevant as there is no legislative framework inplace to reduce the aviation limits to the stated level.

(See also Regulation table)

The Maritime Heritage Trust 24/06/14 (See Regulation table) Noted

Harwich Town Council 26/06/14 (See Regulation table) Noted

Scottish Environment Protection Agency

26/06/14 (See Regulation table) Noted

UK Major Ports Group 26/06/14 UKMPG accepts that the draft transpositionregulations appropriately apply the terms of Directive2012/33/EU into national law without gold plating.However they are strongly of the view that the benefitsof the proposal as set out in the impact assessment(IA) have been overstated and the costs understated

for the following reasons:

The IA does not take into account the potential coststo port operators or to port communities resulting fromchanges to shipping patterns caused by theintroduction of more stringent standards in the SulphurEmission Control Areas in the North Sea and EnglishChannel from January 2015. (An example is in their

Noted

Where possible, the informationprovided by the UK major Ports Grouphas been incorporated into the IA.


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response)

Some of the non monetised health and air qualitybenefits appear to be overstated. For example with theone of exception of Dover, there are no Air QualityManagement Areas in ports attributable to emissionsfrom ships.

UKMPG believe the IA should be revised accordingly,to assess the effects of potential changes to shippingroutes in more detail for example the forthcomingwithdrawal of the Harwich – Ejsberg service. UKMPG’sunderstanding is that the true overall cost of all suchchanges could be much higher than stated, with theprospective loss of 2000 jobs in the UK, 12 milliontonnes of additional CO2 emitted each year andadditional costs of £300 million per annum for shippingoperators and customers. There is also someevidence that the increased demand for middle-distillate fuels could have knock-on consequences for

the price of diesel for motorists, and the IA should alsotake this into account. Finally the IA should be moreexplicit that the essential reason for bringing in theseparticular regulations is that the UK is fulfilling arequirement under international and more specificallyEU law which does not allow for an alternativeapproach.

These points which UKMPG havemade have been incorporated in theIA as appropriate.

Forth Ports 27/06/14 Page one of the IA states that ‘Emissions ofParticulate Matter (including Black Carbon) releasedinto the atmosphere are also expected to fall resulting

in a number of health benefits.’ Whilst this would have the potential to be beneficial, there is noevidence presented to support this assertion.

The IA needs to be clearer on air quality managementin ports and the benefits should result solely from areduction in SOX, not other pollutants.

Work was carried out by the MCA onthis in 2008 and much of the detail isbased upon that.

This is a minor amendment which hasbeen incorporated in the IA.


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IA is over optimistic regarding the uptake of alternatefuels.

They consider the uptake on scrubbers may not be asprompt as anticipated because of the options availableie open and closed loop type.

They consider the health benefit listed in the IA maybe optimistic.

There is going to be a consequent impact on othernon-marine fuel types which has not been takeninto account. They highlight that the legislation will puton the pressure on refineries.

The potential modal shift is highlighted as is the impactthe legislation will have on competition betweendifferent modes and routes, leading to distortion in themarket.

For the reasons above they believe that the benefits inthe UK are being over stated and the costs arebeing under stated in the IA.

They provide information which they say casts doubtover the incremental reductions that will accrue fromthe proposed sulphur limits.

A number of Forth Ports customers havemade it clear that there is significant risk that there willbe a movement in trade from ports on theeast coast of the UK to those on the west coast, thisallows the shipping lines to avoid the substantial

additional fuel costs associated with the ECA. This isof serious concern to Forth Ports and other portoperators on the east coast. It is particularlyconcerning when, despite this risk being highlighted byprevious reports, the impact assessment for theRegulations state that there is no competition ormarket distortion issue. Based on the customerdiscussions over the past couple of weeks, there is

This and the following points havebeen reflected in the IA as necessary.


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clearly significant risk of this occurring. It would appearthat Clydeport and Liverpool (both PeelPorts) are anticipated to be the key beneficiaries.Such a route variation further emphasises the overestimation in any improvements to UK airquality. An increase in shipping movements on thewest coast will result in the emissions beingdeposited predominantly upon the UK. This contrastswith UK east coast coastal shipping emissions,which are liable to be predominantly deposited at sea,rather than on land.

Hutchison Ports UK 27/06/14 The IA does not take account of potential costs to portoperators. It will result in cessation of services and amove to other modes of transport and the impact thatwill have.

The IA generally over estimates benefits and underestimates costs.

It will distort competition between UK ports within theSECA and those outside its boundaries.

These points have been incorporatedinto the IA where appropriate.

Bunkerworld 01/07/14 Costs associated with fuel switchingThere may be extra cost as tanks will need cleaning toavoid contaminating the fuel.

There could be an increase in obtaining middledistillates

Fuel premium

Bunkerworld have provided detailed information onprice scenarios.

Costs associated with fitting scrubbersSet out figures in their response which indicatessignificant costs.

Uptake could be significant before 2020 for vessels

The information provided byBunkerworld has been considered

and included in the IA whereappropriate.

These figures provide useful


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that operate exclusiviely within ECAs, providedinvestments aren’t deterred by uncertainty aboutwashwater criteria and a lack of waste receptionfacilities. Vessels operating globally will not be likely toadopt scrubbers prior to the date when a global 0.50%sulphur limit takes effect in, 2020 or 2025.

Possibly 10-20% level of uptake of EGCS before theglobal sulphur limit takes effect.

The availability of scrubber technology may beavailable but there could be installation bottlenecks.

Alternative fuelsThey believe there will be an extremely limited uptakeof other alternatives for existing fleets but a slow andsteady increase for newbuilds. A small number ofvessels will run on biodiesel but not enough to make asignificant impact on overall demand for MGO.

With respect to other alternatives, methanol is apossibility providing it is proved safe during sea trialsand the price is right.

EnforcementThey consider that the fines imposed by the UK arelow in comparison with other countries.

Clarification would be useful for the situation where avessel purchased low sulphur fuel in good faith but

later testing proved it not to be within the limits.

information which have been includedin the IA

Noted.

Noted

Noted

The SI follows normal statutorypenalties – however, there is theoption for cases to be referred to thecrown court where the penalties maybe more severe.

The UK would take a pragmaticapproach in these circumstances as

under the current regime.

P&O 01/07/14 It is noted that a number of the monetised costs relateto old information which may not hold good today.

This is noted but best endeavourshave been made to use the most upto date information and a review will


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Fuel switchingIt should be made clear that there is no requirement touse the 0.1% sulphur content fuel (MGO) prior to01/01/2015, as if companies switch over early toensure full compliance they will incur the additionalcosts of burning MGO within 2014 which has probablynot been budgeted for.

Detailed concerns expressed about the use ofscrubbers and conclude that only a small number ofthe scrubber designs available are technically suitablefor multi purpose ships.

Alternative fuelsGeneral industry view is that LNG is only feasible fornew builds.

Costs associated with fuel switching

Believe all costs will be a financial issue and demandwill push up price of similar grade fuels.

Tank cleaning will need to be taken into considerationand there is a massive cost in changing lub oils to alower TBN.

They consider refineries will be unable to cope with thedemand for low sulphur fuel.

Fuel premium

occur in 2018.

Noted.

These concerns have beenaddressed in the main body of the IA.

Noted.

Noted.

Assuming this comment is on thebasis the ship owners/operators havedecided to use compliant fuel, thetank cleaning would be a one offoperation expenditure.

For the same assumption, the changeof use of engine cylinder lubricating oilis noted.

Noted.


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Scenarios in IA are reasonable.

Costs associated with fitting scrubbersDo not agree with the values or costs as to whetherthey reflect industry experiences.

They believe the availability of scrubber technology willbe an issue.

Monetised cost estimates for the UK shippingindustryThey believe the impact of the Directive could be aloss of ships and a loss of EU seafarers and portworkers jobs

Alternative fuelsThey believe there will be a low uptake apart from newbuilds.

General point

They consider consultation and implementation shouldhave happened earlier.

Noted.

Noted.

Noted.

These comments have been reflectedin the IA where possible.

Noted

Noted

Northern Marine Management onbehalf of Stena

01/07/14 Costs associated with fuel switchingConsider costs for switching will increase as vesselswill now need to operate with LMSGO for prolongedperiods.

Use of low sulphur will lead to increased bunkeringoperations hence increased cost.

Believes that refineries will be able to cope withchange in demand.

Costs associated in fitting scrubbersBelieve much work is still to be done to make it anattractive proposition

Alternative fuels

These comments have beenincorporated in the IA as appropriate.

This is reflected in the IA

Noted.


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As a company are actively investigating suitability ofbiofuels.

Monetised cost for UK shipping industryDo not envisage changes to traditional shippingtransportation methods as a result of increasedshipping costs due to the low sulphur regulations.

GeneralDo not support the UK Government approach toimplementing the Directive.

The IA has incorporated this commentwhere appropriate.

Noted

British Ports Association 01/07/14 Cite the example of the Harwich/Esjberg ferry serviceclosing in light of the proposal. Also refer to theBrittany Ferry service between Poole and Spain.

They want to put on record their support of theEuropean Sustainable Shipping Forum which providesadvice on technical and finance issues.

They state that in the future ports will be affected by

the need for the shipping industry to invest inabatement technology and higher fuel costs. Theresult will be shipping lines closing or beingconsolidated.

These comments have beenincorporated in the IA whereappropriate

Intertanko 01/07/14 They express general concern about the Directivereferring to the Annex VI guidelines which they claimare not respected by industry.

Specific commentsPage 15 : incorrect assumption that scrubbers limitedto main engines.

Page 16 : Disagree that 20-30% assumption will beusing LNG by 2020.

Page 19 - Do not understand the concern of theimpact on the refining industry

They suggest that historically, the MGO price premium

Noted.

The further work on the IA hasincorporated these comments wherepossible.


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over HFO was about $300 to $350 per tonne. Thatwas the case when HFO price was $300/tonne andwhen the HFO price was over $700/tonne.

With regard to the cost of scrubbers, the price for ascrubber could be only 50% of the total price ofretrofitting it onboard a ship. The other 50% includesprices of commissioning, work to retrofit the scrubber,class fees, off-hire time, etc.

They suggest that an average price for retrofitting ascrubber is not lower than $4 millions. For existingships with ME engines, retrofitting for LNGconsumption could be as high as $7m or $.

It is possible that introduction of these (and other)regulations could result in the early scrapping ofvessels and increase the number of newbuilds.

Unite Union 01/07/14 Believes will have far reaching implications across

Europe and will impact the flow of freight

Will have impacts beyond the shipping industry

Environmental impacts

Points out that comparisons between, for example, theBaltic and North Sea are difficult as potential pollutionin the North Sea would spread further.

Costs associated with fuel switchingDo not agree that costs associated with the changehave already been occurred. Additional costs will

likely be passed onto customers and a potentialredistribution of freight paths.

Unite believes, any increase in the cost of fuel willhave significant consequences for the financial viabilityof services.

Additionally, in some ports the infrastructure previously

Noted.

All of these comments have beenconsidered and the IA amended asnecessary.


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utilised to supply the current heavy oil supplies will beused to provide the low sulphur distillates. This willforce lines to change to the low sulphur fuel, even ifthe line had previously invested in scrubbing deviceswhich enable it to continue using the current highersulphur oil.

Costs associated with fitting scrubbersUnite does not agree with the assumption that EGCSuptake will not be significant before 2020 given thatlines are already investing in EGSC heavily in order tocomply with the 2015 changes.

Unite doubt the availability of scrubber technology tobe an issue currently but doubt that shipping lines willbe able to install it by the deadline.

No mention is made of the costs of disposing ofscrubber wastes.

Monetised cost estimates for the UK shippingindustryUnite believe the lifelines to many small ports providedby short sea shipping routes, are especially at riskalong the South and East Coasts. Logistics companiesare already seeing the imminent entry of thislegislation as an opportunity. Unite believes that thiswill cause an increased demand for road containertraffic from Liverpool, Bristol and other West Coastports. This could impact on the surroundinginfrastructure and result in further pollution.

Alternative Fuels

Unite refer to the possible blending of standardshipping oil and biodiesel or fuels derived from othersustainable sources.

They believe LNG to be a viable option but its use willplace a strain on the infrastructure thus possiblydriving up price of gas supplies.


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Enforcement sanctions and monitoringUnite strongly believes the penalties for non-compliance are far too lenient.

They consider responsibility should lie with the shipowners with respect to the equipment installed.

They consider shipping lines may take a risk of non-compliance even after fines are paid.

Unite believe spot checks on vessels are ineffective asthe ship could change fuels when an inspection teamis in sight. They believe monitoring equipment shouldbe on board the vessel.

General commentUnite believe that there are some serious flaws in theimplementation of the legislation particularly, in respectof the clause which allows a ship to simply declare thatthey have not been able to obtain the fuel to avoid

compliance. Unite does not believe it is unreasonableto require shipping lines to be responsible for ensuringthat adequate fuel supplies available at port of call.

Unite also believes that the Impact Assessment hasnot taken a wide enough view on the effect of thislegislation, nor placed measures in place in order tolessen its effects in particular, on jobs, f reightmovement or the viability of short sea shipping andferry operations.


Any issues will be considered on acase by case basis.

The IA has incorporated this commentwhere possible.

South west maritime historysociety

02/07/14 (See Regulation table) Noted

The Government Chemist 04/07/14 (See Regulation table) NotedUK Petroleum Industry

Association (UKPIA)04/07/14 The incremental volume of gas oil is likely to be

sourced from imports

There are around 40mte of high sulphur bunkersconsumed in the EU and, if ships do not fit scrubbersby 2020 (or 2025 depending on the outcome of theMARPOL review), then this volume of fuel will have to


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be converted to 0.50% mass material. This will requirehigh pressure, high temperature refinery processingwhich will release additional CO2 as well as addingsubstantial cost to the consumer.

It is unlikely that such investment in upgradingrefineries will be made within the UK (or even the EU)because this measure, when combined with otherenvironmental regulations, puts UK & EU refining at adisadvantage versus non EU refiners. The combinedimpact of these measures, which do not include otherregulations currently being drafted within the EC, willpotentially cost UK refiners £11bn to comply with.Therefore some UK refineries may not be able tocomply, become uneconomic and close. Consequentlythe UK will rely on more imports and have lower supplysecurity and resilience for all fuel products.

Page 7:

“Marine fuel has been … increasing in average sulphur

cont ent …” – The only monitoring at global level thatwe are aware of is the IMO monitoring, which wasstarted in 2004 showing an average S level of 2.7% forheavy fuel oil, and reported an average of 2.43% in2013.“… disposing of excess elemental sulphur and …” – this is incorrect and refineries do not operate in thisway. Sulphur in its elemental form after being removedfrom the fuel is supplied to the chemical industry asfeedstock. The sulphur content in marine fuels comesfrom the sulphur which is naturally within the crude oilsprocessed themselves and those streams which are

used to blend the fuel. Elemental sulphur is not addedto marine fuel in the way implied by the impactassessment.

Page 31:The higher efficiency of distillate fuel is relatively smallcompared to residual fuel. CO2 emissions from theship are indeed lower, but these savings are more

These comments have beenconsidered and the IA amendedwhere appropriate.


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than offset by the increases in refinery CO2 emissions – in other words, on a well-to-propeller basis, distillatefuel is worse (this is explained in more detail inparagraph A3 above).The reasoning given on no increased CO2 emissionsin EU refineries due to the ETS cap is incorrect – it is afact that emissions would increase in EU refineries ifthey had to produce more low sulphur fuel.

Exxon Mobil 04/07/14 Exxon’s comments are incorporated with those ofUKPIA

Noted.

RMT Union 04/07/14 They consider the Impact Assessment has not takeninto account evidence on the risk to seafarers’ jobs,despite serious concerns being raised by unions andindustry.

They are very concerned about the impact onemployment. The Regulations could lead to cuts to UKseafarer jobs on a scale bigger than those that followedintroduction of Duty Free and opening of the ChannelTunnel combined.

RMT want the Government to give assurances that itwill not allow shipping companies to sack UK seafarersand replace them with low cost colleagues fromoutside the EU as a way of meeting the cost ofcompliance with the new sulphur dioxide emissionscap.

They believe the regulations could trigger a modal shiftthat would be environmentally damaging, as ferrypassengers and hauliers are hit with higher fares andswitch to other modes, especially road and aviation.

Comment taken into account in thefinal IA.


This is outside the scope of theRegulations.


Stena Line 01/07/14 Environmental ImpactsThe Impact assessment in Annex B is noted. Noted.


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Costs associated with fuel switchingThe costs associated with fuel switching on January 1st 2015 will be significant, in line with the fuel premiumestimates and will be passed on to customers. This willresult in some customers switching from Stena Line tousing the Channel Tunnel on the traditional SouthEastern corridor(s) routes and therefore impact on theprofitability and viability of our routes.

Stena Line understands that it is unlikely UK refinerieswill be unable to meet demand and fuel costs will risefurther in line with the new transportation costsnecessary to meet that demand.

Fuel premiumStena Line has no comment

Fuel consumptionStena Line strives to reduce fuel consumption as a KPIrequirement. Based on current indications it is unlikelythat fuel consumption reduction initiatives can possiblymatch the anticipated fuel premium.

Costs associated with fitting scrubbersIndicative costs for Stena Line vessels to fit scrubbersare circa €4-6M dependent on vessel with excessiverefit time estimated to be in excess 30 days. Scrubbertechnology reliability is not proven and currentavailability is questionable. Stena Line operates 25+ferries in ECA areas with 5 Ro Pax and 2 Ro Ro in

Area North Sea. The cost of chartering in vessels tocover these refit periods does not appear to have beentaken into account.

Monetised costs for the UK shipping industry Any reduction of revenue in what can only bedescribed as a marginal business in the South Eastcorridors can only be offset by a reduction in costswhich inevitably result in job losses. DFDS havealready announced one closure on Southern NorthSea as the business was marginal and with the ill

Noted.

Noted.

Noted

Noted.

Comments taken into account in thefinal IA where appropriate.



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thought out introduction of the new rules, despitelogical argument, it would not be viable to continue.This applies to all ferry operators operating in amarginal business and is exacerbated in South EastUK with the presence of the Channel Tunneloperators. The longer routes will suffer the mostsignificant costs in relation to numbers of passengersand cargo as identified in the IA.

Alternative fuelsStena Line is actively engaged in the pursuit ofalternative fuels and trialling methanol at this time.There is no infrastructure of substance in the UK thatcan currently support either LNG or methanol in theUK and that in itself will impact the viability ofalternative fuels. Ferry harbours by their nature arelocated close to the populous and are bound to facetough opposition in attempting to build the necessaryinfrastructure to support these fuels. Even then, thecosts may be prohibitive coupled with the necessarypermissions required in relation to such infrastructure.

Health benefitsStena Line supports measures that improve the healthand well being of the population. The IA suggestssignificant benefits of sulphur emission reductions butdoes not take into account the localised pollutioncaused by freight and passenger vehicles switching toshorter routes and travelling further by road. Neitherdoes it take into account the potential increase in roadtraffic accidents due to modal shift from sea to roads. Itis estimated that this modal shift will cause an extra3.6 million tonnes of freight on UK roads.

EnforcementStena Line always acts in good faith and assiduouslyto achieve compliance with all regulations. The level ofdeliberate offence should be proportionate to theoutcome of that offence. If a shipowner receives fuel ingood faith and it is subsequently found not to becompliant with the regulations then that shipowner

Noted.




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should not be penalised.

General questionsIs there any discussion on EU funding to assistshipowners moving to alternative fuels in relation tothe infrastructure necessary?

DfT have taken forward this strand ofwork separately in conjunction withindustry partners.

The Scottish Government 02/07/14 They remain concerned about a few points of theDirective - in particular, theimpact of increased fuel costs on their ferry servicesand on their cruise ship tourism, whichthey hope to continue to grow and not be stalled by theDirective. They are also concerned aboutthe possible implications for modal reverse as a resultof any increased costs incurred byshipping companies moving freight that will ultimatelybe passed onto their customers.

These issues have beenaddressed in the IA wherepossible or in bilateraldiscussions with the ScottishGovernment.

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