Transportation
Around 85% of the products that Sweden’s steel companies manufacture e.g. plate, strip, wire, rod, profiles and tubes are exported. At the same time, about 85% of all steel used in Sweden is imported – primarily steel of less sophisticated qualities. To this should be added the import of input goods such as iron ore, scrap and coal to satisfy the needs of the steel industry.
This extensive foreign trade with more than 140 countries around the world makes the steel industry one of Sweden’s largest transport operators through the purchase of transport services by truck, train and ship. Just over 50% of the steel export goes by rail while just over 40% is carried by ship. The rest is transported by truck. Furthermore, a large part of the steel industry’s input goods is imported by ship or railway to Sweden. To this must be added the transportation between different production plants within the country.
Decision on reduced sulphur content in marine fuel – consequences for the steel industry
The International Maritime Organisation (IMO), at its 58th environmental committee meeting (MEPC) in October 2008, adopted more stringent limit values for sulphur in marine fuels. The new rules imply that the limit value for sulphur in marine fuels in the Baltic Sea, North Sea and English Channel (sulphur emission control area SECA) is cut from 1.5% at present to 0.1% in 2015. Globally, as in the rest of the EU, the limit value is reduced from 4.5% at present to 3.5% as of 2012. If shown to be feasible, an additional reduction shall take place down to 0.5% with effect from 2020, otherwise the reduction will come into effect in 2025. An equivalent control station is absent for SECA.
The Swedish Maritime Administration has, on behalf of the government and following Sweden’s agreement to be bound by the IMO decision, carried out an enquiry into the consequences of this decision. In Finland a corresponding enquiry has been conducted for the Finnish Ministry of Transport and Communications. Both these enquiries indicate serious economic consequences for trade and industry.
Consequences of the new regulations will include:
- •A competitive disadvantage and additional costs for Swedish industry that operates in a global market,
- Distortion of the EU’s internal market, since standards vary sharply between northern and southern Europe,
- Sharply increased transportation costs for both imports and exports,
- Altered logistics flows in Europe to ports that are not part of SECA (e.g. Le Havre or Marseille in France, the west coast of the UK and Narvik)
- Transfer of goods transport from sea to road throughout the EU, i.e. directly contrary to stated political objectives in both Sweden and the EU.
Decision on new regulations for marine emissions of nitrogen oxides
The IMO also adopted more stringent limit values for marine emissions of nitrogen oxides at the 58th Environmental Committee Meeting. Emissions shall, in line with the decision taken, be reduced in two stages; globally in 2011 and within an Emissions Control Area (ECA) in 2016. By 2016 nitrogen oxide emissions from vessels shall have been cut by 80% compared with the level that applies to ship engines during the years 2000-2011. However, before the decision can take effect an equivalent ECA that applies to sulphur emissions must be instituted by the IMO. In the autumn of 2009 work is under way within Helcom – Baltic Marine Environment Protection Commission – to draw up an application to the IMO on the establishment of an ECA for nitrogen oxide in the Baltic Sea. This application shall, according to plan, be submitted to the IMO’s 60th Environment Committee Meeting in March 2010.
The IMO standards for nitrogen oxide emissions mainly apply to new ship engines and should therefore be fairly unproblematic to implement. These demands however result in increased costs which - together with the cost increase that the new sulphur regulations (see above) imply - will make shipping even less competitive compared to land transportation. Moreover, should the new IMO regulations only cover the Baltic Sea or Baltic Sea together with the North Sea and English Channel, it may also mean that in this marine area only older vessels operate in order to circumvent the regulations.
Until now, Sweden has not carried out any analysis of possibilities and risks/threats with different simulation scenarios inherent in an ECA for nitrogen.
Our fundamental standpoints
It is our opinion that transport policy shall be based on the following principles:
- Proper consideration shall be given to the competitiveness of Swedish industry
- Objectives and steering instruments shall be harmonised internationally or at least at the EU level
- Only one steering instrument for each objective
- A harmonised internal market
- An efficient infrastructure
