Eco-Fuel to Drive Up Freight Rates at Stena

Stena Line says that the new sulphur directive for shipping traffic within the North European SECA area, which comes into force on January 1, 2015, is forcing the company to increase freight prices. The company projects that the directive will add extra SEK 1 million (USD 135,000) of freight costs per day.

“From an economic perspective, this is one of the largest negative political decisions since tax-free was discontinued. We have a positive attitude to environmental improvement rules as long as they are the same for everyone and are implemented at a rate that we and our customers can handle – but this isn’t the case with the new sulphur rules.

Ultimately, the increasing fuel costs affect the North European export and import industry negatively because a significant share of transports are done by sea,” said Stena Line’s CEO Carl-Johan Hagman.

For Stena Line, the changes mean increased fuel costs of around SEK 450m  (USD 62.3m) per year as a result of the more expensive low-sulphur fuel.

“On the freight side, we thereby have to increase prices by around 15%. We want to be able to deliver the same quality and service and continue our efforts to offer environmentally effective transports.

This means that we must charge our freight customers more to compensate for the increased costs,” said Hagman.

Stena Line has since 2005 worked to reduce its environmental impact within its Energy Saving Programme, which has reduced vessel energy consumption by 2,5 per cent every year, the company reports.

“In early 2015 we will be starting a trial with methanol as a fuel on one of our ferries. At the same time we are investigating scrubber technologies and also looking at LNG as a fuel. Naturally, converting and rebuilding our ferries will both take time and cost a lot of money,” said Hagman.