European Union May Adopt More Stringent Sulfur Content Limits for Marine Fuels

On May 23, 2012, the European Union (EU) announced that an agreement in principle (strictly, a "compromise proposal") had been reached by the two arms of the EU legislature (the Council of the EU and the European Parliament) on proposed legislation requiring all ships operating in EU waters to meet more stringent limits on the sulfur content in marine fuels. The proposed legislation is similar to United States Environmental Protection Agency (“EPA”) regulations addressing marine fuel sulfur content. Implementation of these standards throughout the United States and EU highlights the seriousness with which many nations are addressing the public health implications of particulate emissions from marine vessels. The European Commission estimates that air pollutants from ships cause approximately 50,000 premature deaths each year in Europe. It remains to be seen, however, how difficult it will be for ships to comply with the new standards and how strictly they will be enforced once they go into effect.

Annex VI of the International Convention for the Prevention of Pollution from Ships (a treaty called MARPOL) includes two tiers of standards for marine fuel sulfur limits. While some of the standards, found in Regulation 14, apply globally, the most stringent standards are regionally-based and apply only in designated Emission Control Areas (“ECAs”). ECAs are specific areas designated by the International Maritime Organization (“IMO”) as requiring higher levels of protection.

Annex VI was revised in 2008 to limit the global sulfur fuel content to 0.5% by 2020 (down from 3.5% for cargo ships and 1.5% for passenger ships) and ECA sulfur emissions to 0.1% by 2015 (down from 1.0%). Limits could be met by using either 0.1% sulfur content fuel, abatement technology, or a combination of the two. Importantly, the amendments left open the possibility that the global standards could be postponed until 2025 if the signatory nations determine that it is not possible for ships to comply with the 0.5% global fuel standard by 2020.