3. Existing Regulations Controlling Sulphur Levels in HFO and LFO

• 3.1 Canada
• 3.2 United States
• 3.3 European Union

Tables table3.1 and table3.2 present the requirements of existing regulations for sulphur in HFO and LFO in Canada, United States, and the European Union and its member states. These requirements are further discussed in the following paragraphs.

There is currently no regulated national standard for sulphur in either HFO or LFO. British Columbia, Ontario, Quebec, New Brunswick and the Montreal Urban Community regulate the sulphur content in HFO at various levels ranging from 1.1% wt. up to 3.0% wt.⁹. Several provinces including New Brunswick, Ontario and Quebec regulate the sulphur content of LFO at 0.5% wt.

The commercial standard set by the Canadian General Standards Board (CAN/CGSB-3.2) specifies limits of 0.3% wt. sulphur content for type 0 LFO and 0.5% wt. for types 1 and 2 LFO. It does not specify any limit for sulphur in HFO.

For HFO, northeastern states have sulphur limits ranging from 0.2 to 2.8% wt. (predominately 1% wt. in urban areas and 2% wt. in rural areas) as shown in Figure 3.1. All regulated limits for HFO are per-litre (or per-gallon) maximum limits.

In the United States about 30% of HFO consumed is low sulphur HFO (defined as fuel oil with 1% wt. sulphur content or less). In the northeastern states, around 40% of HFO consumed is low sulphur HFO. (See Appendix 4 for details). This contrasts significantly with the Canadian use of low sulphur HFO of less than 8% of all HFO (refer to Table 2.1).

For LFO, a number of states, including Connecticut, Delaware, Massachusetts, New Hampshire, New York and Texas have set sulphur limits generally ranging from 0.2% wt to 0/4% wt.

Figure 3.1: Sulphur Limits for Heavy Fuel Oil in Northeastern States

Regulated by Northeastern U.S. States.

Countries of the European Union are subject to its Directive 1999/32/EC requiring them to reduce sulphur in HFO to 1% wt. by January 1, 2003 and sulphur in LFO to 0.1% wt. by January 1, 2008. Some countries such as Austria, Denmark and Finland already have in place a limit of 1% wt. sulphur (or less) for HFO. The current EU sulphur limit in LFO is a maximum of 0.2% wt.

The EU Directive forms part of an overall European strategy to combat acidification. In November 2000¹⁰, the European Union Council adopted national emission ceiling limits (to be met by 2010) for certain atmospheric pollutants including SO₂. Accordingly, some flexibility is built in the Directive (such as described below under bullets 4 and 5) to "reflect the conclusions from the integrated assessment [for the acidification strategy] and to avoid non cost-effective expenditure...".

1. The 1% wt. sulphur limit for HFO does not apply for fuel used in combustion plants that
   • are considered new plants with effective desulphurization technologies and which comply with the sulphur dioxide emissions for such plans set out in Article 4 of the Annex IV to that Directive (Directive 88/609/EEC on large combustion plants);
   • have thermal input below 50 megawatts where the emissions of sulphur dioxide are at concentrations less than or equal to 1700 mg/Nm³ (approximately 458 ng/J)¹¹ (in flue gas with oxygen content 3% by volume on dry basis at standard temperature and pressure); or
   • are part of refineries where monthly average emission limits do not exceed 1700 mg SO₂/Nm³ (approximately 458 ng/J)

According to the Commission, these flexibilities recognize that for power stations and certain industries it would be more cost effective to remove SO₂ from emissions using technology such as flue gas desulphurization rather than using low sulphur HFO. The Commission considers that the emission standard of 1700 mg SO₂/Nm³ (approximately 458 ng/J) "is approximately the equivalent, in terms of emissions, of burning heavy fuel oil with a 1% [wt.] sulphur content."

2. The requirement for sulphur in HFO does not apply to fuels for marine use.
   
3. While the sulphur requirement for light fuel oils applies to marine gas oils (i.e. distillate fuels intended for marine use), it allows for a derogation for these fuels in Greece, the Spanish Canary Islands, the French Overseas Departments, and the Portuguese archipelagoes of Madeira and Azores, since low sulphur levels "may present technical and economic problems" for these countries.
   
4. The EU Directive allows a member state to authorize HFO with sulphur levels between 1% wt. to 3% wt. to be used in part or the whole of its territory if air quality standards for SO₂ are respected and where emissions do not contribute significantly to acidification in any member state. The Directive specifies that to avail itself of this possibility, a member state has to inform the European Commission and the public at least 12 months beforehand and establishes a process where proposed measures are reviewed by the Commission which then makes a decision.

According to the Directive, the Commission's decision is to be reviewed every eight years on the basis of information to be provided to the Commission by member states.¹²

5. The Directive allows a member state to authorize, up to the end of 2012, LFO with sulphur levels between 0.1% wt. to 0.2% wt. to be used in part or the whole of its territory if air quality standards for SO₂ are respected and where emissions do not contribute significantly to acidification in any member state. To avail itself of this possibility, a member state would follow the process identified above for HFO.

Objective and Benefits of EU Directive

The objective of the EU Directive is to reduce emissions of SO₂ across the European Union. According to the European Commission, it "is an integral part of a cost-effective strategy designed to combat acidification as well as reducing atmospheric pollution by sulphur dioxide and particulate matter."

The European Commission estimated that the introduction of the 1% wt. sulphur limit for HFO "will reduce SO₂ emissions in 2010 by approximately 1 million tonnes as compared to what would be the case in the absence of the Commission's proposal". In considering benefits to human health, the Commission estimated that, "on average, the economic costs of the damage resulting from 1 tonne of SO₂ emissions in the [European] Community is approximately 4,000 ECU¹³ [CAN$ 6,000]; the majority (80% +) of these costs being attributed to damage to human health." Accordingly, the EU estimated the overall economic cost of the damage resulting from 1 million tonnes of SO₂ emissions to be approximately 4 billion EURO (CAN$ 6 billion).

⁹ Environment Canada, A Review of International Initiatives to Accelerate The Reduction of Sulphur in Light and Heavy Fuel Oil, September 2001.
¹⁰ Official Journal of the European Communities, Common Position (EC) No. 51/2000 adopted by the Council on 7 November 2000 with a view to adopting Directive 2000/C375/01 of the European Parliament and of the Council of European Communities on national emission ceilings for certain atmospheric pollutants, December 28, 2000.
¹¹ The European emissions limit is higher than the federal guidelines for thermal generating stations. The Thermal Power Generation Emissions - National Guidelines for New Stationary Sources were originally published in 1981. They are intended to provide national emission standards for application by provinces to new coal, oil and gas-fired steam electricity generating plants. The guidelines include emission limits for nitrogen oxides, total particulate matter and sulphur dioxide, and reflect the capabilities of best technologies that were available twenty years ago. These guidelines are now out of date and revisions to the Guidelines have been proposed.
The revised CEPA 1999 guidelines include emission limits which reflect the capabilities of current best available economically feasible technologies. For instance, the previous guidelines included a SO₂ emission limit of 258 nanograms per joule (ng/J) of heat input for a No. 6 fuel oil (HFO) with a sulphur content of 2.3% by weight (compared to approximately 458 ng/J in the European Union). The proposed revised guidelines includes a more stringent SO₂ limit.
There are six thermal generating stations in Canada: Holyrood (NF), Tuft's Cove (NS), Courtney Bay (NB), Coleson Cove (NB), Tracy (QC), and Lennox (ON).
¹² The authors are not aware of any applications by member states for the use of high sulphur fuel oils.
¹³ ECU: European Currency Unit or EURO. Conversion rate used in this report: 1 EURO = CAN$1.5.
¹⁴ Environment Canada, A Review of International Initiatives to Accelerate the Reduction of Sulphur in Light and Heavy Fuel Oil, September 2001.