Hong Kong's Clean Fuel Rules May Cost Shippinglines
The bill requiring ocean going ships to switch to low sulfur fuel while at berth in Hong Kong could effectively raise the cost of shipping containers through the city.
Under the new Hong Kong Air Pollution Control (Ocean Going Vessels) (Fuel at Berth) Regulation, OGVs will be required to use low-sulphur marine fuel, LNG and any other fuels approved by the Director of Environmental Protection.
According to a report in South China Morning Post, the law for greener Hong Kong has raised concerns on who should bear the costs for an environmentally clean port.
Several international shipping lines reportedly said that they were studying ways to minimise the hit. Levying a surcharge on their customers remains the most viable option. Box lines mulling passing on extra cost of fuel.
With the majority of the industry awash in red ink in recent years, it is beyond the financial capability to bear the entire cost for clean air. So the shipping lines may implement surcharges similar to what they are doing in North America and Europe [emission control areas].
If the legislation is adopted, it will mandate the use of bunkers with a maximum sulfur content of 0.5 percent while ocean-going ships are at berth in port city and carry a maximum fine of HK$200,000 ($25,700) and six months imprisonment for violators.
Ship masters and ship-owners will be required to record the date and time of fuel switching and keep the relevant records for three years. If a vessel uses technology that can achieve the same or lower emission of sulphur dioxide when compared with using low-sulphur marine fuel, the ship may be exempted from switching to compliant fuel, a spokesman for the Environmental Protection Department said.
Hong Kong is not the only port to implement green practices; Singapore’s Jurong Port has recently announced that it will be constructing and implementing the first green berths in the world.
The new sulphur fuel requirement, which is due to be implemented by 2020 has sparked outrage among shipping lines, who could be expected to pay tens of billions of dollars a year in higher fuel costs under the new 0.5% sulphur cap.