MO warned of price impact of shipping fuel switch

A ship industry proposal to switch the world's merchant fleet to diesel fuel from high-sulphur heavy oil would send oil soaring through the $150-a-barrel mark, an environmental technology group said yesterday, suggesting the £10 gallon would become a distinct possibility as demand begins to outstrip supply. Consumers will also feel the knock-on effect of higher food and energy bills, since the extra demand from switch to diesel at sea would be equivalent to one and a half times the annual automotive diesel consumption in Europe.
 
Shipping circles are debating how to reduce harmful sulphur dioxide emissions, which cause acid rain, respiratory illnesses and heart problems. Part of the industry, led by the independent tanker owners' organisation Intertanko, wants a total ban on high-sulphur marine fuels in favour of lower sulphur diesel fuels.
 
The International Maritime Organization (IMO), the UN agency responsible for preventing pollution from ships, will consider the fuel proposal when its Marine Environment Protection Committee (MEPC) meets in London on Monday 31 March.
 
Robert Clarke, spokesperson for the Technology for Sustainable Shipping Group said the idea "does not make any sense environmentally or economically. It is not a cost-effective way to improve the environment," he said. "The oil market impact alone would likely more than double the cost of marine fuels and substantially increases prices of diesel, aviation jet fuel and heating oil on land.
 
Refineries would need to produce an extra 250 million tonnes of distillate fuels a year to meet the new diesel at sea demand, requiring around one billion tonnes per annum of crude.
 
"That's more than double annual production of Saudi Arabia," Clarke said. "The increase in the cost of crude oil is also likely to spell bad news for the economy as costs and prices rise. And the development poses a major threat to international economies, which are already suffering from the global credit crunch.
 
Clarke also said the ship industry proposal to switch to diesel risked raising carbon dioxide (CO2) emissions in the manufacturing process.
 
The Technology for Sustainable Shipping Group is an informal forum designed to communicate the benefits of emissions reduction technology. Members include The Torvald Klaveness Group (Norway), BP Krystallon (UK), Marine Exhaust Solutions (Canada) and Wärtsilä (Finland).
From: auto industry.uk/news

Address: Bibo Road, Zhangjiang High-technology Park, Shanghai, China
Tel: 0086-21-3637-6177
Fax: 0086-21-3637-6177
Skype: eastfilters