EPA reaches agreement with Alaska shipper on fuel standard

The federal Environmental Protection Agency has reached agreement with one of Alaska’s largest shipping companies, providing a conditional waiver for new fuel standards while Totem Ocean Trailer Express converts to cleaner-burning fuel.

The announcement comes two days after rules took effect requiring that cargo carriers and cruise ships use a low-sulfur fuel within 200 miles of U.S. and Canadian shores. Alaska has sued, saying the rules will lead to higher freight rates and pricier cruises that will hurt the state’s economy.

The EPA, which is working with the U.S. Coast Guard, has said the agencies are aware of Alaska’s concerns and have some flexibility in implementing the rules.

The EPA says once the conversion is complete, in 2016, Totem’s vessels will achieve significantly higher emission reductions than required.