Newsletter nr 4 - Midnordic Green transport Corridor

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In this issue there are for example following topics: - International needs should be part of national plans - Sulfur directive approved – scenarios for Midnordic Cargo Transports? - Positive news from Karelia, the Finnish and Russian border - Finnish Transport Minister Kyllönen visited Port of Kaskinen and many other.

Text of Newsletter nr 4 - Midnordic Green transport Corridor

  • NEWSLETTERDEVELOPING AND PROMOTING THE MIDNORDIC GREEN TRANSPORT CORRIDOR

    September 2012

    www.midnordictc.net

    Topics in this letter: - International needs should be part of national plans - Consequences of sulfur regulation

    ... and other related news

    North America

    Europe

    Russia

    Asia

  • www.midnordictc.net

    NEWSLETTERSeptember 20122/17

    DEVELOPING AND PROMOTING THE MIDNORDIC GREEN TRANSPORT CORRIDOR www.midnordictc.net

    The necessity to develop good east-west connections is about keeping domestic companies competitiveness on an increasingly global arena. This cant be emphasized enough. Looking at cross border solutions between Finland and Russia, getting a stabile ferry line between Finland and Sweden together with electrification of the Merkerline between Sweden and Norway is the most essential matters to solve in the short run. Business with Russia and China is a growing market potential for the Nordic companies. We all need to understand that we are facing a period where high amount of cooperation between the Nordic countries is essential, in order to be able to compete on a global market.

    International cooperation is a matter of domestic survival

    The IMO sulphur regulation kicking in 2015 in the Baltic Sea area will without any doubt affect and change the transport situation.

    The conclusion is that we need to change transport

    Norway, Sweden and Finland must invest in alternative and complementing inter-national transport routes in order to face future... Output from Midnordic Green Transport Corrdor (NECL II) Mid-term conference 15-16 August 2012 Vaasa

    patterns towards being environmental.

    It also means that we need to have efficient and reliable transport solutions where amount of loading-reloading, change of transport mode etc. are cut down to a minimum.

    In order to change transport patterns certain infrastructure needs has to be solved. Some of these needs are at such complexity that they cant be left to the market to solve. The need of changing transport mode in general from trucks to ships and trains led to another issue we currently are facing. Namely that infrastructure planning often stays domestic. Decision makers tend to look at national needs rather than cross border matters. International needs end up as low-ranking matters in national transport plans.

    Read the whole memo and download the conference presentations:

    www.midnordictc.net/newsevents/newsarchive/

  • www.midnordictc.net

    NEWSLETTERSeptember 20123/17

    DEVELOPING AND PROMOTING THE MIDNORDIC GREEN TRANSPORT CORRIDOR

    Per-ke Hultstedt is the Project Manager of NECL II -project, represent-ing the Leadpartner County Administrative Board of Vsternorrland.

    per-ake.hultstedt(at)lansstyrelsen.se, tel. +46 70 190 4195.

    In the footsteps of our forefathers for the victories of tomorrowWe are again standing face to face with extremely important and far-reaching national decisions in Norway, Sweden and Finland. In Sweden, for example, these decisions extend over infrastructure development up until 2050, but which will almost certainly have an impact beyond that. Such decisions will cover all infrastructure in which case we are suddenly talking not just about different means of transportation, but also about other methods of communication, energy supply, etc. Such decisions will not only affect individual countries, but also neighbouring countries. Such decisions are important from an environmental standpoint and for the competitive strength of companies on an increasingly global market; thereby they are important for all of us. Such decisions can provide us with the opportunity to maintain our standard and are essential to us being able to avoid the negative development trend that can be perceived in neighbouring countries.

    I started thinking about what the situation looked like from a historical perspective and how it all once started how we thought back then and what instruments dictated our decisions. Some of the questions I asked were

    - IS it really possible that we have learnt nothing from history?

    - CAN it really be that we are still struggling with the same preconceived notions as before, but in a new form?

    The first above-ground railway was built in 1798 between the mines and the Hgans harbour in north-west Skne. It was a railway with wooden rails and the

    carriages were pulled by horses. The Swedish word for railway, j r n v g , translates literally to iron way, so if we assume that railways are made of iron and require engine power, then the first railways in Sweden date back to 1856.

    In some cases r a i l w a y s s upp l emen ted the channels that were built, in other cases they came to compete with the channels. It was

    in the second half of the 19th century that the railway expansion gained momentum in Sweden.

    The railway radically reduced travel times. A stagecoach trip from Stockholm to Gothenburg used to take a whole week. By train the route could soon be travelled in 14 hours this time was gradually reduced as faster and faster locomotives became available.

    However, it was far from obvious that Sweden would invest in railways. Many were against and they did not lack arguments. The Swedish rolling landscape with all its hills, deep canyons, lakes and large forests was not suitable for steam locomotives. These were most of the arguments. Everyone thought that trips at such speeds would make people sick. Others feared that iron from the rails would be stolen.

    Interested to read Per-kes entire historical review ? Go to www.midnordictc.net/information and media/blog of project manager

  • www.midnordictc.net

    NEWSLETTERSeptember 20124/17

    DEVELOPING AND PROMOTING THE MIDNORDIC GREEN TRANSPORT CORRIDOR www.midnordictc.net www.midnordictc.net www.midnordictc.net

    NECL II -project will during fall 2012 produce and publish a report which analyses the scenarios of the sulfur regulation to the Midnordic Green Transport Corridor. The aim is to study the impact of the sulphur directive in general with a focus on cargo flows, costs, fuel options and investments, and also effects on competitiveness for the major industries in the Midnordic area.

    Analysis (including SWOT and Scenarios 2020 and 2030) will be based on current knowledge from authorities, universities, shipping and transport sector, ports, industry and stakeholder organisations.

    The IMO regulation is a UN declaration and all EU -members have signed the agreement as well as Sweden and Finland, but even also Russia. In general the whole EU should follow the IMO regulation and all EU waters outside SECA should apply the 0.5 % level from 2020 (even if the global limit will be delayed to 2025). For passenger ships outside SECA the limit would be 0.1 % in 2020 (is now 1.5).

    For example the Swedish Maritime Administration 2009 predicts the consequences to mean eg. following:

    50-55 % increase of fuel price

    20-28 % increase of shipping transport cost

    The sulfur regulation on Baltic Sea - scenarios for Midnordic Cargo Transports 5-6 % increase of transports on rail and road (respectively)

    7-10 % decrease of shipping transports

    But the administration admits it is extremely difficult to predict future fuel prices.

    Options for following the new limits are for example the following: Marine Gas Oil (MGO) or low sulphur Marine Diesel (MDO), Liquid Natural Gas (LNG) and Biogas (LBG), Heavy fuel oil with exhaust gas cleaning (Scrubber), Methanol / DME, Bio-oil and Hydrogen. Also slow steaming is considered a way to reduce fuel consumtion and cost. So there are several options for following the new limits but time will tell which solutions the companies will choose.

    We can speculate that the consequences will be both maritime, logistics and industrial. Anticipated consequences will raise the prizes for fuel, transport costs etc. but at the moment it is difficult to predict how much.

    So there is no back-door, the regulation will kick in and the new situation must be handled somehow. But for example the Swedish industry and the Shipping organisations still try to induce the government and/or EU to postpone the regulation.

    >>>>>>>>>

    The light blue line is marine fuel with a 0,1-0,2% sulphur content.

    The yellow line is bunker oil, the marine fuel used world wide today.

    Even though price varies over time the price between low sulphur fuel

    and bunker oil is almost around always around 250-300 USD/tonne.

    Dark blue line is 0,5% sulphur content in marine fuel.

  • www.midnordictc.net

    NEWSLETTERSeptember 20125/17

    DEVELOPING AND PROMOTING THE MIDNORDIC GREEN TRANSPORT CORRIDOR www.midnordictc.net www.midnordictc.net

    The sulfur regulation on Baltic Sea - scenarios for Midnordic Cargo Transports

    The light blue line is marine fuel with a 0,1-0,2% sulphur content.

    The yellow line is bunker oil, the marine fuel used world wide today.

    Even though price varies over time the price between low sulphur fuel

    and bunker oil is almost around always around 250-300 USD/tonne.

    Dark blue line is 0,5% sulphur content in marine fuel.

    Gustav Malmqvist who is the contract manager in the survey points out also following:

    The Sulphur regulation must also be seen as a driver for innovation and infrastructure investments. At the moment we have more questions than answers, but the upcoming report will hopefully atleast rise up many important topics to public and cross border discussions.

    More information about the upcoming study: Gustav Malmqvist, MIDEK Ltd contract managergustav(at)midek.se Tel. +46-70-6630442

    The big questi