25 July (Lloyd's List) - THE Mediterranean sulphur Emission Control Area could reduce trade in the region by 1%, while the countries that would be affected the most were Syria, Lebanon and Spain, according to a new paper.
The implementation of ECA from 2025 could reduce trade in the Mediterranean to $249.7bn, from $252.1bn, according to research that reviewed 445 bilateral trade flows in the region.
The Mediterranean ECA would reduce trade by 1%-1.5% in Syria, Lebanon, Morocco and Spain, according to the paper by researchers from France’s Kedge Business School.
The most affected sectors would be foodstuffs, animal products and vegetable products, with these products’ trading to drop by 5.5%, 2.9% and 2.4%, respectively. Researchers found that these products were more sensitive to maritime transport costs, although they did not take into account affects of shippers’ potentially changing trade patterns because of higher costs.
Researchers, led by Pierre Cariou, suggested their findings could shed light on future ECA discussions, as they argued that it took countries 15 years to agree on the Mediterranean ECA because of disparate economies of southern and northern states in the region.
Mediterranean states agreed on the ECA proposal in late 2021, while it was adopted by member states of the International Maritime Organization a year later.
Vessels must switch to fuels with a maximum sulphur content of 0.1% in ECAs. Marine gasoil is the most popular fuel option for ECAs.
The bulk of the cost increase will be because of higher fuel costs to comply with ECAs, as MGO is more expensive than fuel oil.
MGO prices in Spain’s Algeciras were at $819 per tonne on July 3, compared with very low sulphur fuel oil at $616, according to price reporting agency Argus Media.
