Ferry line
P&O has warned that job cuts in the
UK are 'inevitable' as a result of new sulphur legislation on marine fuels, due to come into force in 2015.
P&O fears that its fuel costs would increase by around GBP 60-80 million (USD 94-125 million) per year following the implementation of stricter standards in less than three years' time.
Under the new regulations approved by the
International Maritime Organization (IMO), all ships operating in ECAs (
Emission Control Areas) in 2015 will be required to change to a fuel that contains a maximum sulphur content of 0.1%, instead of the current sulphur limit of 1%.
According to the UK governmet, the new sulphur regulations will "markedly reduce sulphur emissions from ships, and consequently improve air quality in the UK and beyond, delivering significant health and environmental benefits".
The UK's
Transport Select Committee - a select committee of the
House of Commons - has said that the costs of tighter controls would be outweighed by the health benefits, which it estimates at around GBP 1.1 billion (USD 1.7 billion) per year from 2020.
A recent committee report said: "Tighter emissions limits have been under discussion for many years, during which time shipping has enjoyed favourable treatment when compared with the emissions limits and fuel costs faced by the road haulage industry.
"However, we acknowledge these regulations will impose significant costs on operators, and we therefore agree the Commission should impose no additional burdens on operators at this time over and above the requirements of Annex VI."
An unnamed spokesperson for P&O Ferries is quoted as saying: "This will change routes, which today are marginal, to be heavily loss-making routes. This is completely unsustainable, with job losses inevitable."
He said ferry services within the North Sea emissions control area would face "severe economic cost pressures" from 2015 and non-profitable routes would have to be closed.
"Within the UK, short sea and ferry services on the longer North Sea Routes from
Rosyth,
Newcastle,
Teesport,
Hull and
Harwich are particularly exposed to these job losses," P&O said.
"Many of these areas are already suffering from high unemployment due to the ongoing recession over the past three years, and further job losses will hit these communities hard," the ferry company added.
P&O Ferries fleet director
John Garner commented: “We are supportive of efforts to reduce the impact of shipping on the environment, but these proposals just haven’t been thought through.
"Increasing the cost burden on shipping companies threatens jobs and risks a modal shift that would see more trade moving by road as the cost of sea transport rises.
"This could have a significant effect on the environment, making a mockery of attempts to cut emissions."
