MPs warn of impact on shipping jobs from new pollution controls

STRICT new pollution controls will cost thousands of British shipping jobs, force ferry fares to rise by a fifth and may even drive operators out of business, MPs have been told.

The UK maritime industry has warned that ports including Newcastle, Hull, Harwich, Teesport and Rosyth would be particularly badly hit by tougher limits on sulphur emissions in the North Sea.

Ferry companies said their fuel bills would rise by tens of millions of pounds a year, resulting in passenger fare increases of 20%, fewer services and job losses.

They also claimed that more traffic would be transferred to the roads and that higher freight costs would mean imported goods would cost more.

The so-called Annex VI controls, to come into force from 2015, are backed by the British government as part of an international convention revised in 2008.

The European Commission wants to bring the regulations into European Union law, but with additional requirements - resisted by the UK - for passenger ferries to observe the limits even when they are outside special emission control areas.

The Commons Transport Select Committee today supported the Government, saying the costs of tighter controls would be outweighed by the health benefits, estimated at �1.1 billion a year from 2020.

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But it urged the Government to work with fellow EU members to block the EC’s “gold-plating” of the regulations with the additional restrictions on passenger ferries.

“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,” the committee said in a report.

“However, we acknowledge that these regulations will impose significant costs on operators, and we therefore agree that the Commission should impose no additional burdens on operators at this time over and above the requirements of Annex VI.”

Maritime UK, which represents shipping and ports, said the regulations would cost jobs.

Vice chairman Lars Olsson told the committee the regulations would place an additional financial burden of up to �3.6 billion on shipping.

“The problem we have as an industry is that we cannot absorb this additional cost and we have to offset it by adding it to transport prices, for both passengers and freight,” he said.

“This, we believe, will lead to modal shift. It will affect our businesses in a radical way and it may lead to route closures and loss of jobs, investment and so forth.”

Steve Todd, national secretary of the Rail, Maritime and Transport Union, said: “You are talking about thousands of seafarers’ jobs being at risk if companies are forced into having to withdraw vessels because they cannot comply by a certain date.”

P&O Ferries said its fuel costs would rise by about �60 million a year, adding: “This will change routes which today are marginal, to be heavily loss making routes. This is completely unsustainable, with job losses inevitable.”

It said ferry services within the North Sea emissions control area would face “severe economic cost pressures” from 2015 and non-economic 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,” it said.

“Many of these areas are already suffering from high unemployment due to the ongoing recession over the last three years, and further job losses will hit these communities hard.”

Brittany Ferries told the committee its costs would rise by at least �40 million. “To absorb additional costs of this magnitude passenger fares and freight rates would have to increase by 20% which will inevitably result in a fall in business,” it said in written evidence to the committee.

“Because of our longer routes, which unavoidably use more fuel, our passenger fares and freight rates are already significantly higher than those on the Dover Straits.

“We are, consequently, relatively more sensitive to fuel prices so these increases would make us uncompetitive, particularly as the Tunnel will not be affected by these regulations.

“This will result, at the very least, in a reduction in frequency of services and the closure of routes and, at the worst, a cessation of business.”

Transport Committee chairwoman Louise Ellman said: “Clearly the Government must work with industry to identify available abatement technologies and help overcome barriers to the development of this equipment.

“But when tough emission standards were first imposed on cars, suitable technology emerged far more rapidly than much of the motor industry forecast and cost far less than was predicted at the outset.”