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Hong Kong Plans Low-Sulphur Incentives

Keith Wallis, Hong Kong – Monday 16 June 2008

Ships could be asked to reduce speeds to 12 knots.

VESSEL operators could be given incentives to switch to low-sulphur fuels within 64 km of Hong Kong and Shenzhen ports and to reduce ship speeds to just 12 knots, as part of a package of initiatives to reduce maritime pollution.

The plans are among a raft of proposals set to be unveiled tomorrow in a report by Hong Kong public policy think tank Civic Exchange.

The 45-page study, Green Harbours: Hong Kong and Shenzhen — reducing marine and port related emissions, recommends 12 key measures to be implemented by both the private and public sectors.

The document is important because it was prepared with help from the Hong Kong Shipowners’ Association, the Marine Department, terminal companies including Hutchison Ports and other local organisations. As a result, many of the proposals could be speedily launched.

Chief among these are the implementation of what Civic Exchange said are “fast and easy wins, such as requiring vessels to slow down to reduce fuel consumption”.

Vessel operators would be given incentives to switch to a low-sulphur fuel within 64 km of Hong Kong and Shenzhen ports. Under the proposal, port operators would pay shipping companies the difference between the price of bunker fuel and the low-sulphur distillate fuel for vessels that make the fuel switch at least 32 km from the ports.

To qualify for the incentives, ships must also participate in the ports’ voluntary vessel-speed reduction programme, limiting speeds to 12 knots. In addition, ships must burn low-sulphur fuel in their auxiliary engine while at berth.

The report also calls for “the creation of a regional cross-industry body to manage port and marine related environmental issues” and says the Hong Kong government “is well-placed to convene this group”.

The report also calls for “a comprehensive green ports strategy and related policy measures” to be developed. This should include the use of “regulatory processes under international treaties such as emissions control areas to engage Hong Kong, the Pearl River delta and Beijing”.

Officials are urged to “consider imposing fees on high-sulphur fuels and lowering taxes and duties on ultra low sulphur diesel” while improving fuel distribution to decrease the actual cost of ultra-low-sulphur diesel for local craft.

The report also calls for a government-led detailed inventory of maritime-related pollutants, including greenhouse gases, to provide a strong technical foundation for both policy decisions and on-going research and monitoring in southern China. It says research should be carried out on the health effects of marine and port related emissions to determine subsequent policy measures to reduce the impact of maritime related pollution.

Civic Exchange praises several companies, including China Navigation, the privately-owned Swire shipping company, Shekou Container Terminal, and Yantian International Container Terminal for their environmental iniatives, including switching to low-sulphur diesel and electric-power port equipment.

But the group said: “There is a willingness among them to do better but they will need government regulation to create a level playing field so that laggards do not benefit from non-action. Thus, marine and port-related emissions in fact represent a low-hanging fruit for the authorities, which they must harvest sooner rather than later.”

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