Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
It is a pleasure to serve under your chairmanship this afternoon, Dr McCrea. Like other Members, I congratulate the hon. Member for Kingston upon Hull East (Karl Turner) on securing this important debate. The sulphur regulations will undoubtedly have an impact on the shipping industry, jobs and the environment. I will answer a number of his points but also put on record some of what the Government have been doing. Some of the information that has been put about is perhaps slightly disappointing.
The hon. Gentleman was right to identify at the start of his speech that the fundamental issue is air pollution and its impact on human health and the environment. Everybody accepts that air pollution is bad for people’s health. We are talking not just about quality of life, although that is important, but about costs to industry and the commercial sector when people are off work because they are sick, and costs to the national health service for treating those who need treatment. Reducing sulphur emissions will undoubtedly provide benefits to public health, in both inland and coastal communities. Reducing the emissions will also provide benefits to the environment. Sulphur is linked to acid rain, which affects plant life and crops, and can upset the balance of delicate marine eco-systems.
For exactly those reasons the Government have worked consistently with the International Maritime Organisation, or IMO—the international body with the knowledge and expertise to regulate international shipping appropriately and proportionately—to develop measures to regulate pollutant emissions from ships. Throughout the whole of that process, under both this Government and the previous Government, the aim has been to develop measures that are effective and proportionate, with a view to implementing them in a way that minimises both the regulatory burden on and the cost to industry.
In the IMO, pollutant emissions from ships are controlled by annex VI to the international convention for the prevention of pollution from ships, more commonly known as MARPOL. Although it is true that a number of operators have worked to reduce emissions, sadly some have taken no steps on the issue. The regulations, which date back to 2008, and some of the new limits in MARPOL annex VI stem from the recognition by the international shipping community and the Government that the new limits need to be supported. The limits will help air quality and will also have consequential benefits for human health and for the environment.
Caroline Dinenage (Gosport) (Con)
I agree with the Minister—I know many shipping and ferry companies based in my region do, as well—that the intention of reducing emissions is admirable, but there is a twofold concern, which he has already raised. One element is the cost of the changes: one local ferry company has calculated that it will have to spend £320 million on converting its fleet. But it takes three months to convert each ship, and it is those time scales that are of most concern to companies.
Stephen Hammond
My hon. Friend is of course right, and she will hear in my speech what I did immediately I became shipping Minister, some 21 months ago, to recognise that. She will also want to hear about some of the work we are now doing with companies to reassure them about how they can minimise costs.
My hon. Friend will also recognise, as did the hon. Member for Kingston upon Hull East, that the Government and the EU are not seeking to impose on the industry something that was announced only today, yesterday, a month or a year ago. The industry has had over six years to get its head around the regulations. Indeed, it is worth reading into the record what the view of the UK Chamber of Shipping was when the proposals were first announced back in 2008. I quote directly from the chamber of shipping’s document:
“The IMO’s proposal to progressively reduce sulphur emissions globally to the equivalent of 0.5 per cent sulphur content in all fuel by 2020, and in designated sensitive coastal areas to 0.1 per cent sulphur content equivalent by 2015, is a major move forward. These realistic deadlines also give the oil industry the time it needs to ensure that the required quantities of low sulphur fuel will be readily available.”
That was its view in 2008, and at that stage it recognised that the time scales were realistic.
A time scale was put in place for reducing the global sulphur limit. There is a separate, staged timetable for reducing levels to the more stringent limit in designated emission control areas. In almost all respects, the IMO MARPOL standards have been incorporated into EU law, in the directive on sulphur in marine fuels. The origin of the requirements does not lie solely in the UK. It is not that the UK Government are placing burdens on the shipping industry; on the contrary, the requirements are part of an international worldwide agreement, stemming from international and European agreements. The industry was fully consulted on those at the time.
I have to say that I am pretty disappointed that the UK Chamber of Shipping continues to react as if the sulphur limits are new and are somehow inherently undesirable, or else that the UK Government should have avoided them. The fact of the matter is that the regulations are about the protection of health and protection of the environment, which is a legal obligation. The UK Chamber of Shipping has been brought into the Government’s deliberations at every opportunity. It is well aware of what the Government can and cannot do legally and of the fact that we have pushed back continually to try to change the time scales.
Again, in 2009 the UK Chamber of Shipping wrote to The Guardian:
“The latest IMO legislation was recognised by governments and the shipping and refining industries as a prime example of ambitious but pragmatic rule-making.”
It recognised that in 2009, so to pretend today that the regulations are something new is slightly disingenuous.
Karl Turner
Does the Minister accept that the chamber of shipping is saying that ferry operators are concerned about job losses and about their businesses failing as a result? That is an issue for me, as Member of Parliament for east Hull. Will he address that directly—is there anything he can do as a Government Minister?
Stephen Hammond
The hon. Gentleman is right to be concerned. If he waits a few minutes I will tell him directly what the Government have done and are doing now.
The idea that is being put forward today, namely that these are new regulations and a crunch is coming—there is not; there is a date for implementation coming—is not supported by all of the chamber’s own members. On the contrary, some members of the chamber belong to the Trident Alliance, which is a coalition of shipping owners and operators who share a common interest and do not share the views being put across.
I accept that shipping is not the only source of pollutant emissions, but without the controls, polluting emissions from ships will grow significantly because of the reductions made by other modes of transport: unless action is taken, by 2020 shipping will account for more than half of all sulphur emissions in Europe.
As everyone has recognised, the limits undoubtedly pose challenges for shipowners, particularly for those whose ships operate predominantly or exclusively in an emission control area. The Government appreciate that some shipowners, and ferry operators in particular, have raised concerns about the cost of complying with the new limits. From our discussions, we are conscious that the impacts are not spread evenly, and that routes for multipurpose vessels—those carrying both passengers and freight—are likely to see the highest costs. We also recognise the importance of ferries and jobs.
Throughout the whole process we have therefore sought to implement the sulphur limits in a way that maximises the opportunity for the industry to minimise the economic impact. I became shipping Minister in 2012, and immediately in October of that year and again in 2013 I chaired round-table meetings of industry stakeholders, including from shipping, the ports, abatement technology—more colloquially known as scrubbing technology—oil refining and logistics sectors, to consider how we could make sure that people could work to comply with the regulations in a way that minimised regulation and cost. As a direct result, we commissioned a survey to look at the economic costs to industry.
Penny Mordaunt
I thank the Minister for what he has done with the shipping sector. Whatever the sector needs, whether it be incentives or a boot up the backside, that work needs to carry on. Does he recognise that it is not just the sector itself that is affected, but the ports and jobs connected to ports? In Portsmouth we are putting a lot of money into our commercial port. Will he give us an assurance today that our ambitions—whether on ferries, cruise liners or freight—will be able to be met if the directive is implemented?
Stephen Hammond
I certainly hope to be able to do that by the end of my speech, and to explain some of the things we are doing. Portsmouth, like so many other places, including Hull, has a booming port industry. There is a renaissance, particularly in my hon. Friend’s port and in my home town of Southampton, from where there are huge exports, the like of which would not have been dreamed of 15 years ago. That is a tribute to the port industry, which is now a great success.
As a direct result of the round-table discussions, which were also about commissioning work on the economic costs, I immediately contacted the Secretary-General of the IMO and made exactly the point that the hon. Member for Kingston upon Hull East made: we must not wait for a review of the 2020 regulations, but should start a review immediately. I persuaded the IMO that it should start the review promptly following the implementation of these regulations.
Another outcome of the meetings is that the Government are looking at ways of helping the industry. My officials have been working closely with the UK Chamber of Shipping—which is why I am so disappointed—for a considerable period. We have solicited an assurance from the European Union that it will meet individual ferry operators who approach it to discuss a route to compliance. I accept that there are important issues to address, but both those things are a major step forward in helping the industry with the prospect of the regulatory burden.
One question is whether, as ships are encouraged to use fuels with a lower sulphur content, there will be sufficient fuel available. That is why the review is so important. It is equally important to look at other issues. Do we have an opportunity not to implement the sulphur limits? No, we do not because we would fail to meet international treaty obligations. More than that, we consistently spoke to EU fellow nations, none of which was prepared to deflect or move away from the time scales. If we do not implement the new limits, non-compliant UK-flagged ships will still be subject to enforcement action at UK ports. We do not have the opportunity or option of avoiding the limits. We cannot delay implementing the limits even on vulnerable routes. There is no exemption and that is why we have worked with the EU to allow ferry operators to discuss flexible implementation.
We held extensive discussions with other north European states that will be affected by the limits that will apply in the North sea. We pressed for exemptions for vulnerable routes, but there was no support from other members. The Government have not only pressed the case for ferry operators directly with the EU, but negotiated with other countries.
Shipowners have the option of installing scrubber technology or the exhaust gas cleaning system and we have been working with them on the cost of those systems. I recognise that significant capital is required and the Department is exploring the scope for securing EU finance under the trans-European network programme and affordable capital from the European investment bank for shipowners and ports that want to benefit from investment in that green technology.
The hon. Member for Kingston upon Hull East referred to a possible modal shift from sea to road and the identification of total fuel costs. Again, we are consulting on draft UK legislation. Part of that consultation is directly about the cost, but if we look at whether the implementation of the 0.1% sulphur limit will lead to a rise in costs for motorists, even if every ship in the emissions control area used 0.1% sulphur fuel rather than the abatement technology, we see that would still be less than 10% of the total market for middle-distillate diesel fuel. There will be a potential cost for motorists, but it will not be as great as stated. It is highly unlikely that every ship will use that. Many will use the scrubbing technology and I hope that the Government will be able to secure EU finance to enable shipowners to make transitional arrangements.
We have also been discussing with the industry our plans for applying a much more pragmatic approach to enforcement. It is important that enforcement is consistent and fair. My officials have already discussed with other member states and the Commission how to ensure a fair and consistent approach throughout the EU, so that services from UK ports are not unfairly disadvantaged.
It is important to look beyond compliance with the limits in the control area. I have been working closely with the Secretary-General of the IMO on the availability of 0.5% sulphur fuel in 2020, which will be the next challenge. l am pleased with the leadership that the UK has shown. We have been prominent, with the support of the Dutch and the Americans, in ensuring that the IMO is committed to engaging constructively and undertaking an early review.
There is no doubt that the sulphur limits are coming in in 2015 and prospectively in 2020. However, if the review shows that the fuel is not available, I will certainly negotiate with the IMO to push that limit back because it would be unfair to impose that on the industry. This Government and, to give them credit, the previous Government have worked with the industry to find ways of mitigating the cost and the regulatory burden and to ensure that jobs in this country are protected. That is why we are working to secure finance and transitional arrangements for people to implement scrubbing technology.
I hope that I have been able to reassure my hon. Friends and the hon. Gentleman that the Government, unlike the image that might have been presented, are taking the matter extraordinarily seriously. We have done so during my time in office and before. We have actively worked to support British shipping and the all-important jobs that come with it.
Question put and agreed to.