A European Parliament panel approved tougher restrictions on sulfur in ship fuel as part of a maritime clean-air package that may cost the industry as much as 11 billion euros ($14 billion) a year.

The Parliament's environment committee voted to set a 0.1 percent sulfur limit for fuel used by passenger ships operating between European Union ports beginning in 2020. The current EU limit is 1.5 percent.

The committee also decided to reduce sulfur in fuel used by all ships in EU waters other than the Baltic Sea, North Sea and English Channel to 0.5 percent in 2015 and 0.1 percent in 2020 from 3.5 percent at present. In addition, the panel voted to incorporate into EU law an International Maritime Organization accord that will lower sulfur in fuel used by all ships in the Baltic Sea, North Sea and English Channel to 0.1 percent in 2015 from as much as 1.5 percent currently.

"By switching to more stringent sulfur limits, it would be possible to achieve significant health and environmental benefits," Satu Hassi, a Finnish member steering the draft legislation through the 27-nation EU Parliament, said in a report approved by the environment committee today in Strasbourg, France.

The EU is cracking down on sulfur-dioxide emissions blamed for illnesses including asthma, bronchitis and heart disease and environmental damage such as the disintegration of buildings. Ship emissions of sulfur dioxide in EU areas will surpass European land-based discharges of the pollutant by 2020 without further action, according to the bloc.

Tougher Standards

The tougher standards would bring health benefits of between 15 billion euros and 34 billion euros a year, the European Commission, the EU's regulatory arm, said last July when proposing the new law. The annual costs for the shipping industry would range from 2.6 billion euros to 11 billion euros, according to the commission.

The Parliament environment committee's vote on the tougher EU limit for passenger ships and on the IMO standard for all ships in the Baltic Sea, North Sea and English Channel matches the commission's proposal.

The committee's decision on all ships in EU waters other than the Baltic Sea, North Sea and English Channel goes further than the commission proposal, which was limited to incorporating into European law an IMO agreement that will reduce the sulfur limit to 0.5 percent in 2020.

The European legislation still needs the support of the full EU Parliament and of the bloc's national governments. A possible fast-track process could lead to final EU approval in the coming months.

Source: Bloomberg