Shipping lines cut clean fuel deal with government

Ships calling at the city's port will go on using low sulphur diesel in exchange for government timeline to make such fuel use compulsory

PUBLISHED : Tuesday, 01 January, 2013, 12:00am
UPDATED : Tuesday, 01 January, 2013, 4:47am

Shipping lines will continue to voluntarily use low sulphur diesel in Hong Kong, but only if the government sets a timetable for tough regulatory controls mandating the use of the cleaner fuel, experts said as the Fair Winds Charter, a voluntary two-year programme, ended yesterday.

About 18 shipping and cruise lines had signed the charter under which they agreed to use low sulphur diesel to the "maximum extent possible" from January 2011.

In return, they urged the implementation of a six-point action plan to help reduce marine pollution. Chief among the proposals was for the government "to take a lead and work with the Guangdong government to regulate the use of low sulphur fuel in the Pearl River delta region by December 31, 2012".

While no legal controls outlawing heavily polluting marine diesel have yet been put in place, the Environmental Protection Department in September inaugurated an incentive scheme, giving a 50 per cent cut in port fees to ship owners who use cleaner fuel.

But the rebate covers only 30 to 45 per cent of the cost of using the cleaner but more expensive low sulphur diesel.

Public policy think tank Civic Exchange estimated that if all container lines calling at Hong Kong switched to the cleanest fuel available - with a sulphur content of 0.1 per cent or less - sulphur dioxide emissions from shipping would drop by about 80 per cent.

But without laws laid out to mandate the use of such fuel, environmentally conscious shipping lines are concerned they are paying for the cleaner, more expensive diesel while those that continue burning cheaper, dirtier fuel have an economic advantage over them.

Arthur Bowring, managing director of the Hong Kong Shipowners Association, said the government would like shipping lines to extend the Fair Winds Charter. But he added: "If shipping lines were to consider an extension, then it would have to be accompanied by commitments from the government to move towards regulation in order to introduce a level playing field.

"Any extension would not be open-ended."

Roberto Giannetta, secretary of the Hong Kong Liner Shipping Association, said representatives from shipping lines, Hong Kong and Shenzhen container terminals operators, think tank Civic Exchange and the city's environment officials had met in November to discuss the issue.

"The concept is that the Fair Winds Charter will be revised and upgraded to include a new set of targets to be achieved within 2013," he said yesterday.

Giannetta said the targets would include draft legislation and signing of the charter by the Environmental Protection Department, adding that a revised draft of the 2013 charter had already been circulated to members of the liner shipping association which represents most container shipping lines operating in Hong Kong.

"Several of them are coming in with confirmation of support and participation," he said.