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Rallying for speed limits at sea

17 / 05 / 19

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How many of us give a fleeting thought to carbon dioxide emissions by merchant ships criss-crossing the oceans -- the very fleets which are responsible for delivering 90% of world trade?  Yet as the rallying call to save our planet is becoming increasingly louder, setting a global speed limit on ocean shipping is gaining traction.

On April 30, 113 shipping companies including prominent Greek ship owners like the Martinos and Procopiou families, public companies such as Harry Vafias’ StealhGas  together with their German, Belgian, French, Finnish, Spanish and New Zealander counterparts submitted a formal proposal to the IMO urging the soonest enforcement of “mandatory regulation of global ship speeds differentiated across ship types and size categories.”

The timing is clearly deliberate since a week long meeting regarding environmental issues is currently underway at the IMO headquarters in London.  Opting out of a flat rate plus having both ship owners and charterers shoulder responsibility also shows that practicalities have been well thought out in a concerted effort to balance market forces with growing environmental concerns. Champions of slow steaming are quick to emphasise that this concept provides the most eco-friendly sea transport in the short- and medium-term since technology-driven solutions are not readily available.

Should slow-steaming become obligatory across the board, the maritime industry is in for a massive re-think.

What are the immediate implications?

Environmentally speaking, slower speed instantly reduces carbon dioxide emissions. Yet it also translates into higher charter rates and vessel values benefitting ‘buy low, sell high’ ship owners.  The biggest hurdle is to maintain market driven delivery dates of both dry and wet bulk cargo. Detractors in fact argue that the proposal would be counterproductive since it would necessitate an increased number of vessels at sea to ensure current and future demand expectations.  It would even trigger an increased demand for more vessels to be built, therefore escalating the strain the environment. Furthermore, charter markets will cease to operate smoothly, charter and spot rates will spike resulting in an even more imbalance between the gainers and losers in the maritime industry.     

A closer look at the submitted proposal shows that the signatories of the letter in question make up less than 5% of the global merchant fleet. Nevertheless, it is a start. Significantly, the Greek bulk shipping companies are the main proponents of enforcing speed limits for merchant shipping.  This gives cynics the opportunity to point out the Greeks are pushing such an agenda in order to seal their control of ‘by low, sell high’ maritime assets.

Yet even allowing for vested interests does not undo the accruing environmental gains. Apart from the immediate reduction of greenhouse gases, slow-steaming makes realistic headway into reaching the 5% sulphur cap which the IMO was hoping to implement by 2020, but which is now looming as a chimera. In addition, being tried and tested, slow-steaming does not involve the costly, laborious and illogical installation of scrubbers on vessels that cannot run on cleaner fuels. As Mr George J. Procopiou has often reiterated, “Shifting pollution from the air to the sea does not make sense. The aim should be for the pollution not to be caused in the first place.” This of course puts the onus on both oil refineries and alternative energy providers.

No doubt the current IMO meeting is firing heated debates. As Greg Miller, Senior Editor of FreightWaves rightly comments the burning question is “whether a global speed limit can actually cap GHG-emitting vessel capacity when you cannot cap charter rates or shipyard output.”

The IMO’s decisions will ultimately reveal how truly genuine its efforts are to render the maritime industry more responsible for embracing anti-pollution systems.  

Rallying for speed limits at sea

17 / 05 / 19

Share Article on 

 

How many of us give a fleeting thought to carbon dioxide emissions by merchant ships criss-crossing the oceans -- the very fleets which are responsible for delivering 90% of world trade?  Yet as the rallying call to save our planet is becoming increasingly louder, setting a global speed limit on ocean shipping is gaining traction.

On April 30, 113 shipping companies including prominent Greek ship owners like the Martinos and Procopiou families, public companies such as Harry Vafias’ StealhGas  together with their German, Belgian, French, Finnish, Spanish and New Zealander counterparts submitted a formal proposal to the IMO urging the soonest enforcement of “mandatory regulation of global ship speeds differentiated across ship types and size categories.”

The timing is clearly deliberate since a week long meeting regarding environmental issues is currently underway at the IMO headquarters in London.  Opting out of a flat rate plus having both ship owners and charterers shoulder responsibility also shows that practicalities have been well thought out in a concerted effort to balance market forces with growing environmental concerns. Champions of slow steaming are quick to emphasise that this concept provides the most eco-friendly sea transport in the short- and medium-term since technology-driven solutions are not readily available.

Should slow-steaming become obligatory across the board, the maritime industry is in for a massive re-think.

What are the immediate implications?

Environmentally speaking, slower speed instantly reduces carbon dioxide emissions. Yet it also translates into higher charter rates and vessel values benefitting ‘buy low, sell high’ ship owners.  The biggest hurdle is to maintain market driven delivery dates of both dry and wet bulk cargo. Detractors in fact argue that the proposal would be counterproductive since it would necessitate an increased number of vessels at sea to ensure current and future demand expectations.  It would even trigger an increased demand for more vessels to be built, therefore escalating the strain the environment. Furthermore, charter markets will cease to operate smoothly, charter and spot rates will spike resulting in an even more imbalance between the gainers and losers in the maritime industry.     

A closer look at the submitted proposal shows that the signatories of the letter in question make up less than 5% of the global merchant fleet. Nevertheless, it is a start. Significantly, the Greek bulk shipping companies are the main proponents of enforcing speed limits for merchant shipping.  This gives cynics the opportunity to point out the Greeks are pushing such an agenda in order to seal their control of ‘by low, sell high’ maritime assets.

Yet even allowing for vested interests does not undo the accruing environmental gains. Apart from the immediate reduction of greenhouse gases, slow-steaming makes realistic headway into reaching the 5% sulphur cap which the IMO was hoping to implement by 2020, but which is now looming as a chimera. In addition, being tried and tested, slow-steaming does not involve the costly, laborious and illogical installation of scrubbers on vessels that cannot run on cleaner fuels. As Mr George J. Procopiou has often reiterated, “Shifting pollution from the air to the sea does not make sense. The aim should be for the pollution not to be caused in the first place.” This of course puts the onus on both oil refineries and alternative energy providers.

No doubt the current IMO meeting is firing heated debates. As Greg Miller, Senior Editor of FreightWaves rightly comments the burning question is “whether a global speed limit can actually cap GHG-emitting vessel capacity when you cannot cap charter rates or shipyard output.”

The IMO’s decisions will ultimately reveal how truly genuine its efforts are to render the maritime industry more responsible for embracing anti-pollution systems.