Proposed Amendment of the Sulphur Directive Would Weaken the Competitiveness of the Finnish Forest Industry

Container ships in the Baltic Sea will be required to lower sulfur emissions by 2015.

July 20, 2011 (Press Release) - The EU Commission has published its proposed amendment to the Sulphur Directive, which would lead to the maximum sulphur content of maritime fuels being lowered to 0.1% on the Baltic Sea by the beginning of 2015.

This decision poses a significant threat to the competitiveness of the export-dependent Finnish forest industry because over 90% of the industry's products are shipped overseas. Implementation of this decision will increase the price of cargo shipping by hundreds of millions of euros.

The Commission wants to introduce the International Maritime Organisation's demands of maximum sulphur content into its proposed Sulphur Directive without reservations. The regulations would come into force in a more stringent form and ten years earlier in the Baltic Sea, North Sea and English Channel regions than in other sea areas. To preserve the industry's competitiveness it is necessary to postpone the introduction of these restrictions to 2025.

In conjunction with the publication of its amendment proposal, the Commission released reports on the Directive's consequences as well as on alleviating measures, such as EU or Member State subsidies for a transition to liquefied natural gas or the adoption of sulphur extractors.

The effectiveness of subsidies is, however, questionable and no concrete measures were outlined. The industrial sector has also pointed out that the scheduled date of implementation in 2015 is unrealistic because the securing of a stable source of alternative fuels and the development of new technologies will require more time.

Finland Must Take an Active Political Stance
Implementation of this decision would increase the Finnish forest industry's maritime transport costs by at least EUR 200 million annually. Because of our greater distance to the main markets, Finland would bear a higher cost that our competitor countries, and this would erode the competitiveness of the Finnish export sector. Furthermore, the decision could lead to a situation where export deliveries move from ships to roads and railways, which would increase considerably the carbon footprint of transportation.

International political decisions should not be allowed to put countries in an unequal position based solely on their geographical location. The Government must take an active stance and join forces with other Baltic Sea nations to safeguard the operating prerequisites of Finland's export industries by controlling the negative impact on costs that this decision's implementation would have. This is supported by Finland's fresh Programme for Government's provisions, which aim to influence the implementation and scheduling of maritime sulphur emission restrictions.

Background information
The forest industry is the direct and indirect source of employment for almost 200,000 Finns. The industry's multiplier effects extend comprehensively into surrounding society and contribute to the creation of up to 500,000 jobs. The Finnish forest cluster accounts for one-third of our national export earnings.

There are 50 pulp, paper and paperboard mills, some 170 industrial-scale sawmills and 15 panel products factories in operation in Finland.

SOURCE: Finnish Forest Industries Federation