The Sulphur Directive, Sauna and Finland’s Competitive Position

Last weekend was Midsummer. In Finland this is celebrated extensively, either as the start of the Summer or the start of the countdown to the shortest day of the year (21 December). One obvious important part of the celebration, no matter what the weather looks like, is to go to sauna, preferably near a lake or the sea.

So it went this Midsummer as well. The weather was quite cold and rainy in the end, but the sauna was nice. One interesting aspect was a discussion in the sauna on the merits of the EU’s Sulphur Directive, which should be implemented by the end of 2015, in particular regarding the effects on Finland’s competitive position. The Sulphur Directive is explicitly aimed at sulphur emissions of the the shipping industry, in the context of the environmental fragility of the Baltic Sea.

My point of view, which I also recently advanced in an op-ed in the Finnish daily newspaper Helsingin Sanomat, is that the Finnish forest industries’ developing biofuel industry is the perfect answer to the punishment of the Sulphur Directive. As biofuel does not contain sulphur, it would create an advantage for shipping companies to use it relative to those who use traditional fuel (i.e. diesel or something). Furthermore, the enormous demand for fuel due to the geographical position of Finland and hence the great reliance on shipping for exports, would be a huge stimulus for this industry, which is still in its infancy, A CEO I spoke with mentioned that with the currently planned biofuel-plants, 2 (!!) ships could be provided with biofuel for a year. This obviously means there is not yet nearly enough capacity. But there is a prospect for growth.

I don’t know how biofuel would compare with normal fuel in terms of price, taking into account the Sulphur Directive. But my companion in the sauna advanced the opinion, that nonetheless Finland (and hereby taxpayers) would pay a large price through the Sulphur Directive. He mentioned two arguments: 1) biofuel would be much more expensive and 2) other Baltic Sea countries have not ratified the Sulphur Directive (either). 1) is hard to assess, but 2) is easily checked.

Actually – I take that back. I found a document, that listed most of the EU states and Norway regarding the implementation of the Directive, but countries like Estonia and Latvia were not included. But in any case, I will get back on this issue, in relation to the direct effect of Directives and the implementation of the Directive in all Baltic Sea countries.

So, as it is, it cannot be said that only Finland would pay a price for the implementation of the Sulphur Directive. Obviously, there is likely a huge effect in the short term, because so many products can only be exported by ship. But also on this issue, I hope to return to those aspects in a later post featuring statistics on trade, transport and the like.

Blogging will be somewhat slow, as I am on holiday.

One response to “The Sulphur Directive, Sauna and Finland’s Competitive Position

  1. Pingback: Biofuels and the future of the Finnish forest industries | Arjen polku

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