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Shippers Extend Clean Fuel Pledge After Hong Kong Vows Laws

Shipping companies including A.P. Moeller-Maersk A/S (MAERSKB) will extend a pact to use cleaner fuel while at berth in Hong Kong for a year after the city pledged to impose mandatory limits on all ocean-going vessels.

The 17 shipping companies will use fuel with 0.5 percent sulfur or less at berth in Hong Kong and were “delighted” after Chief Executive Leung Chun-Ying announced plans for tighter regulation during a policy address last week, said Tim Smith, Maersk Line’s North Asia chief executive officer.

The companies’ decision may add pressure on Leung to follow through with a pledge to tighten controls on pollution that’s responsible for 3,000 premature deaths a year in the city. Vessel emissions are a major source of the city’s pollution, which has defied more than 25 years of government efforts to tame it.

“Recognizing that it will take more time to introduce the legislation to make fuel switch mandatory in Hong Kong, the industry has decided it will extend the voluntary switch for another year,” Smith, who is also chairman of the Hong Kong Liner Shipping Association, said at a briefing in the city.

Fifteen shipping lines, two cruise lines and an autoliner agreed in 2010 to abide by the Fair Winds Charter until the end of 2012 to voluntarily use bunker fuel with a sulfur content of 0.5 percent or less while in Hong Kong waters. Vessels can now burn oil containing 3,500 times the sulfur as auto diesel sold in the city.

About 200,000 vessels called at Hong Kong port in 2011, of which about 30,000 are ocean-going vessels, marine department statistics show. Sulfur dioxide emissions from ships would drop by 80 percent if all shipping lines switched to the cleanest fuel available while at port, according to Hong Kong-based think tank Civic Exchange.

Keep Momentum

“What we want to see now is to keep up the momentum from the industry, by bringing other shipping companies on board” such as cruise ship companies, Simon Ng, Civic Exchange’s head of transport and sustainability research, said in a statement after today’s briefing.

Hong Kong has never met its air quality targets in the years since since they were adopted in 1987, according to a November government audit report.

“We envisage this to be completed in a relatively short time,” said Christine Loh, the city’s undersecretary for the environment, on the timing of the legislation.

The 17 companies participating in today’s announcement include Pacific Basin Shipping Ltd. (2343), Hapag-Lloyd AG and Cosco Shipping Co.

To contact the reporter on this story: Natasha Khan in Hong Kong at nkhan51@bloomberg.net

To contact the editor responsible for this story: Hwee Ann Tan at hatan@bloomberg.net

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