Asia/Pacific News
Hong Kong Sulfur Cap Sees Shippers Mull New Bunker Surcharges
Shipping companies are mulling bunker surcharges to deal with additional costs resulting from Hong Kong sulfur cap legislation, South China Morning Post reports.
"With the majority of the industry awash in red ink in recent years, it is beyond our financial capability to bear the entire cost for clean air," said one local manager for a European shipping line.
"We may implement surcharges similar to what we are doing in North America and Europe" where Emissions Control Area (ECA) rules recently tightened.
Other international shipping lines are also said to consider such a move the most viable option.
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.
Low sulfur alternatives to traditional bunkers are currently much more expensive, meaning shipping companies' costs are likely to rise for the time they are berthed at Hong Kong.
According to the report, the proposed law was due to be tabled at Hong Kong's legislative council on Tuesday.
The legislation was expected to be introduced earlier this year, but was stalled, with commentators suggesting Hong Kong feared a flight of shipping traffic to nearby Shenzhen.
"This has been discussed for some time and I haven't seen anybody stand up to object to it," said one legislator concerned with transport, suggesting he expected it to pass.
Earlier this month an environmental think tank criticised Hong Kong port, suggesting it may extend until 2018 the use of port fee incentives designed to partly compensate for the additional cost of low sulfur bunkers, which would effectively be open to all shippers if it overlaps with the proposed legislation.
Late last year, Hong Kong welcomed signals in neighbouring Shenzhen that an ECA might be set up to cover the Pearl River Delta.
