Sulphur Regulations

Debate between Caroline Nokes and Karl Turner

Wednesday 18th June 2014 Westminster Hall

[Karl Turner]

I am grateful to my right hon. Friend for that intervention. He is absolutely right, of course, and I will return to that point.

As the Minister is aware, the route between Harwich and Denmark is to close after 140 years, because of declining demand and the £2 million annual cost of cleaner fuel. I am concerned that other routes will follow. Echoing such fears, the Transport Committee reported that the regulations could reduce shipping activity, affect ports and roads, and cause job losses.

Any attempt to reduce sulphur emissions is commendable and no one is arguing against reducing them per se, but I am concerned that this so-called green policy will in fact have a detrimental effect on the environment—as my right hon. Friend said. I agree that increased costs will see a modal shift, with freight travelling by road instead of by sea; road freight emits around 10 times more CO₂ per tonne than shipping.

In April 2008, the International Maritime Organisation agreed to reduce sulphur emissions from shipping to ensure that ships only use fuel that emits 0.1% sulphur in designated sulphur emission control areas. The entire eastern and southern seaboards of the UK sit within that control area, so every ship coming in and out of ports from Falmouth to Aberdeen will be required to comply with the regulations on 1 January 2015. At least 220 usual routes operating from the UK will be affected and there is real concern that increased costs will see the closure of many of those routes, resulting in job losses.

[Caroline Nokes (Romsey and Southampton North) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Does he agree that not only shipping companies are likely to be affected, but fantastically successful ports such as the port of Southampton, which contributes directly to around 15,000 jobs in Hampshire? It is critically important for us to have transitional arrangements so that the private sector investment that has continued in Southampton for many years carries on in future.

[Karl Turner]

I agree with the hon. Lady, and I thank her for her intervention. For me, the issue is mainly about the loss of employment, and she is right to mention her own constituency because I am sure that she is concerned about employment there. Although the IMO adopted the regulations, it also definitely recognised that flexibility would be required to allow companies the transition time to adapt to the new era without damage to businesses. The hon. Lady made that same point.

Following an inquiry by the Transport Committee, it reported that the regulations would see an 87% rise in fuel costs, and shipping companies estimate that approximately €55 million will be added to annual fuel bills. To meet such increased costs on the North sea routes will probably be economically unviable. I am told by P&O Ferries and other shipowners that, in reality, ferries tend to run on tight margins. The costs will create a problem not only for ship operators, but for exporters, leading to a detrimental effect on our region’s exports and tourism.

Hull’s local economy relies heavily on tourism, and Hull city council’s 10-year plan sees tourism as a major contributor to the economic regeneration of the city. Hull will be the city of culture in 2017 and we are working hard locally to ensure we have reliable and affordable transport links. As a result of increased fuel costs and in order to overcome the extra expenditure, ferry operators will no doubt pass them on to their customers or, worryingly, reduce services. It is therefore of great concern that the regulations could have a severe impact on the number of tourists coming through our ports and weaken the much-needed tourism economy.

No one disputes the need to reduce sulphur emissions, but, if we consider the resulting increased use of road haulage and accept that shipping produces considerably less carbon emissions per tonne kilometre than any other commonly used means of freight transportation, the environmental argument for the policy in the regulations is undermined.