It has been a mixed few weeks for the shipping industry that operates in Hong Kong and the Pearl River Delta region. First, a research study highlighted the adverse health impact of air pollutants found in ship emissions in this part of the world and recommended some action to be taken. Notably, it suggested setting up an emission control area in regional waters to protect public health.
Second, Hong Kong's Environmental Protection Department and Marine Department launched an incentive scheme to encourage at-berth fuel switching by ocean-going vessels in Hong Kong waters, through a 50 per cent reduction of port facility and light dues for vessels that take part.
It is no news that ships pollute the air and affect public health. The key is how the sector takes ownership of its responsibility and seeks to be part of the solution. To this end, credit must be given to the ship industry associations in Hong Kong and the Fair Winds Charter - a breakthrough voluntary initiative championed by the associations and supported by 19 shipping companies since January last year. Under the charter, there were more than 3,600 instances when vessels switched to low sulphur fuel at berth in Hong Kong during the first 12 months of the initiative, leading to a significant reduction of sulphur dioxide and particulate matter emitted from ships.
The government's incentive scheme is welcome. About 300 vessels registered for the scheme during the first week of the launch, but the moment of truth will come next January when the 19 shipping lines' two-year pledge to the charter expires.
The companies have explained from the start that switching to cleaner fuel would cost each of them an extra US$1 million or more per year, and the latest government incentive will help them recoup about 40 per cent of that cost. This is probably a reasonable level of support from the government's perspective, but this financial assistance will be dwarfed by the unsatisfactory performance of the shipping companies this year and their need to cut costs.
More importantly, the shipping lines' biggest concern has always been a distorted playing field within such a competitive sector, in which a handful of companies have to pay more (even with the government subsidy) to voluntarily clean up while others can just pass the buck. To them, regulation on marine fuel standards and environmental performance for ships is the only effective and sustainable way to reduce ship emissions and protect public health.
It is important that the new administration is under no illusion that more ships will opt for cleaner fuel just because a new incentive has been introduced. The industry has been calling for regulation that covers the entire Pearl River Delta region for many years now, as well as a target-based timeline to map out the next steps so that companies can plan ahead.
It is indeed uncommon and quite extraordinary for an industry sector to support government regulation in Hong Kong, but even your most trusted ally will lose patience when there is little progress. We need the government to do more than just drop a few bucks to rally the troops and fight environmental battles.
Simon Ng is head of transport and sustainability research at Civic Exchange