Marine fuels with a high sulphur content create air pollution estimated to cause 50,000 premature deaths in Europe per year. Therefore, the new legislation is excellent news for the European's health and environment, especially in ports and costal areas, EU Environment Commissioner Janez Potocnik said.
'Without this directive, emissions from shipping would exceed emissions from all land-based sources by 2020," Potocnik said in a statement.
Under the new law, the maximum sulphur content of fuels will be limited to 0.5% for all ships from 2020, down from currently 3.5% for cargo vessels and 1.5% for passenger ships.
A tighter limit of 0.1% will apply from 2015 to ships operating in "sulphur emission control areas", which include the North Sea, the Baltic Sea and the Channel. The limit in these areas is currently 1%.
According to the European Commission, switching fuels or exhaust filters to meet the new limits will cost the industry between €2.6 billion and €11 billion. However, that sum would be outweighed by public health savings of up to €30 billion.
"The EU struck to its guns in the face of heavy lobbying from polluting shipping companies, which wanted Europe to renege on its internal commitments and adopt less ambitious legislation," said Satu Hass MEP, the Green politician who led the debate on the issue in the European Parliament.
Ships that fail to meet the new limits will face fines from national authorities, which must be set high enough, the Commission said, to cancel out any savings from not complying with the rules.
Under the agreement, governments may provide investment support to shipping firms to avoid damage to the sector's competitiveness, provided any support complies with EU state aid rules.
Wednesday's agreement by EU diplomats must be rubber-stamped by EU ministers and lawmakers, which is expected by September at the latest