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Swedish shippers' fuel costs may jump 75% on rules, group says

STOCKHOLM (Bloomberg) — Shipping lines based in Sweden may see fuel costs jump by 50 percent to 75 percent because of rules governing sulfur emissions in the Baltic Sea, the Confederation of Swedish Enterprise said.

Permissible sulfur-content output in the Baltic will drop to one percent as of July 1 under International Maritime Organization rules, the confederation said in a May 17 statement on its website. A further drop to 0.1 percent is to take place as of 2015, it said. That's stricter than globally or in other parts of Europe, according to the statement.

"It is crucial to be able to compete under similar conditions as our rivals," Annika Lundius, deputy chief executive officer of the confederation, said in the statement.

Swedish industries' total costs for sea transportation would rise by 28 billion kronor ($3.5 billion) a year because of the rules, according to the group. That would equate to between four percent and nine percent of the nation's industrial base, it said.

The decision to cut sulfur content in the Baltic "was taken without any result analysis," the confederation said, adding that it's pressing the Swedish government to change the ruling.

The Baltic is subject to the stricter standard because it's designated as a so-called emission control area under an annex to the International Convention for the Prevention of Pollution From Ships that took effect in 2005, the IMO's website shows. Outside such areas, a 3.5 percent sulfur limit in 2012 drops to 0.5 percent in 2020.

The confederation represents 50 member organisations including the Swedish Shipowners Association, according to its website.