Up to now ships plying the Baltic Sea have been allowed to use fuel with a 1.0 percent sulphur content. That is set to drop to 0.1 percent in 2015 with the adoption of a new directive.
This will increase the cost of fuel and therefore of cargo shipping, making Finnish exporters’ costs more significant.
The European Parliament will decide on the matter on Tuesday. The restrictions are most painful for Finland to adapt to, as up to 80 percent of Finnish exports leave the country by sea.
UPM CEO Jussi Pesonen has already threatened in Maaseudun Tulevaisuus, a newspaper linked to the Central Union of Agricultural Producers and Forest Owners, to move production to Central Europe
Timo Jaatinen, Managing Director of the Finnish Forest Industries Federation, claims that investment in Finnish plants is also on hold ahead of implementation of the new rules.
”Now when it isn’t known what is happening, investment is stalled, so Finnish factories are not developing,” said Jaatinen. ”That is naturally a problem. If industry is to remain competitive, then it should also invest in the future.”
Finnish exporters estimate the cost of meeting the directive at around a billion euros per year. Toni Hemminki, Senior Vice President of Technology, Energy and Environment at Rautaruukki, says that the directive is being implemented too quickly.
Hemminki says that as there is not yet a technological solution to the problem of high sulphur emissions, ship owners will be forced to use low sulphur fuel which is considerably more expensive than the alternative.
‘Costs unlikely to reach levels claimed by industry’
Fuel currently used by shipping in the Baltic is around a thousand times more sulphurous than the fuel used by haulage lorries, for instance. The limits to be introduced will reduce shipping emissions to a tenth of current levels and save thousands of lives, according to Finnish Green MEP and architect of the sulphur directive Satu Hassi.
”It is estimated at present that just emissions from shipping causes 50,000 premature deaths each year,” noted Hassi.
She does not believe that the cost of compliance will reach the levels claimed by industry, pointing out that interest groups always put their projections at the upper end of the scale during the lobbying stage.
After that there will be a search for the cheapest way to implement the legislation, claimed Hassi.
Finnish industry can also gain from the legislation. The Wärtsilä engineering firm is one of the leading manufacturers of exhaust gas cleaning system to combat sulphur emissions, and the company expects an uptick in orders ahead of the new directive coming into force.