UN Body Nears Agreeing Ship Pollutant Limits UK: April 4, 2008 LONDON - The world's top maritime body has tentatively agreed new sulphur limits for ship fuels that will slash air pollutants, but cost the oil and ship industry dear, an industry source close to the talks said on Thursday. At a major UN International Maritime Organisation (IMO) meeting in London this week countries gathered to thrash out how best to reduce harmful ship pollutants, like sulphur dioxide, and tackle climate changing gases. The industry source who is involved in the negotiations said countries party to the IMO had provisionally agreed on sulphur limits in ship fuels, a bugbear of the industry and a critical milestone, late last night. The final figures and timetable will be agreed by the IMO's Marine Environment Protection Committee on Friday, the source said, adding he would be surprised if it changed radically. Negotiations on tackling climate changing CO2 gases emitted from ships were still continuing, he said. "This will be a massive shakeup for the refining industry, they (oil industry) tell us they will be extremely challenged to meet these figures," said Simon Bennett, secretary at the International Chamber of Shipping commenting of the figures. "It has been reported that this will have far wider implications for the availability and price of diesel for road transport," Bennett said, emphasizing that cleaner distillate fuels would increasingly make up a substantial part of the fuel mix in the future. The world's 50,000 ocean-going vessels, which carry more than 90 percent of the world's traded goods by volume, currently mostly burn fuel oil rich in sulphur. ACTION PLAN The industry source said the revision of the marine pollution laws known as MARPOL Annex VI are as follows: -- By 2010 all Sulphur Emission Control Areas (SECA), currently there are only two, in the Baltic (May 2006) and North Sea (Nov 2007), to have a ship fuel sulphur limit of 1 percent from current 1.5 percent. *It is envisioned that nations will declare new SECA in the future, with the European Union and North America likely declared as huge SECA. -- By 2012 global sulphur limit reduced to 3.5 percent on ship fuels from the current 4.5 percent. -- By 2015 All SECA limits to be reduced to 0.1 percent from 1.5 percent. Japan and Australia and other regions likely to have full SECA by then alongside EU and Americas. -- By 2020 global limit reduced to 0.5 applied of ship fuels. Deadline will have a review two years beforehand to make sure oil industry can produce enough fuels. -- By 2025 absolute deadline for 0.5 percent fuel across world. Critics, including the European Commission and regulatory bodies in the United States, have said progress through the UN agency to date has been too slow. The wide-reaching revisions may go some way to silencing those critics, experts say. "All of this is going to be extremely expensive and cost the shipping industry billions of dollars, the cost of bunker fuels is going to increase quite dramatically," ICS's Bennett said, outlining the ramifications for industry. Bennett, who welcomed the overall initiative on pollutants, said fuels currently represent 50 percent of operating costs for container ships, for example, which carry manufactured goods. Story by Stefano Ambrogi REUTERS NEWS SERVICE