The burning issue of decarbonisation was hotly debated between international maritime industry stakeholders during the Posidonia Web Forums Week held over a plethora of digital platforms from 21st October to 3rd November 2020.
And it was shipping business as usual, albeit on a brand-new format, as the world of shipping converged online in their thousands to fill the physical void left by the cancelation of the 2020 edition of the biennial shipping exhibition due to the pandemic. Registrations exceeded expectations and attendance and active participation was high at all times during the web events. Posidonia once more managed to bring the shipping world together to debate the current challenges facing the industry.
A total of 16 online events were held during the Posidonia Web Forums Week which included the Annual European Shipping Seminar of the virtual event’s exclusive sponsor S&P Global Platts. During an agenda-setting series of presentations, Charlotte Bucchioni, Associate Editor EMEA, S&P Global Platts, asserted that the industry is standing still in anticipation of the International Maritime Organisation’s (IMO) clarifications on decarbonisation compliance issues.
She said: “We have to wait till 2023 to get a clearer picture from IMO with regards to what the shipping industry would have to do to comply. This has caused negative feedback from the industry which has an order book that is the lowest we have seen in ten years due to a combination of weaker crude demand due to carbon reduction targets and uncertainty over fuel regulations.”
It is this uncertainty about fuel regulations that ship owners blame for lack of activity and investments in new builds or fleet upgrades. According to Petros Pappas, CEO of Star Bulk, this is the main reason for the dwindling order book: “Eighty percent of no ordering is due to uncertainty around the fuel situation,” he remarked during a panel discussion organised by Lloyd’s List. He added: “The main thing going forward which will keep us on our feet for decades is decarbonisation. It stops us from ordering vessels.”
Ioanna Prokopiou, CEO of Star Traders, who was also a panel member at the Lloyd’s List event, said: “In order to make a transition to environmentally-friendly shipping we should not disrupt shipping in the way it is done. It needs to be a seamless process. You cannot create an environmental paradise on an economic graveyard. Every suggestion that is made needs to be viable. If we need trillions to address decarbonisation who is going to pay for all of it? A large part of it is about cost.”
And she went on: “Ordering a ship today computing to what you think future regulations demand, your ship may become obsolete while it is still being built as there is no clarity about regulations and compliance. We need to assess the problem from a holistic point of view from extraction of fuel till burning it.”
Pappas echoes her views: We cannot do it on our own. Shipyards first need to do the necessary R&D to develop vessels that will use the fuel of the future. The bunker suppliers need to create the infrastructure. Governments need to subsidise. Banks will need to finance, and charterers will have to have long-term contracts. This way the cost will be spread across the shipping value chain and before the ship owners can invest in zero emission vessels other stakeholders will have to play their own part to provide the funding and the incentives.”
Georgios Plevrakis Director Global Sustainability at ABS, the organiser of the online event titled ‘Shaping Maritime’s Future Together’, shared the same views about the need to approach decarbonisation from a universal perspective: “There is a gap between ambition and what is projected to be the result. Shipping won’t make the target by 2050 unless an accelerated decarbonisation scenario takes place. This would require a team game, shipping alone won’t succeed.”
And as the decarbonisation debate was for days the focal point of shipping executives across the various teleconference platforms deployed by the organisers of the diverse Posidonia Web Forums Week agenda, the IMO Secretary General Kitack Lim was asked his view during the Tradewinds Shipowners Forum on when can the industry expect to see clarity on the regulatory framework.
“Once we develop the key element of the policy and guidelines on how to implement it, we need more than ten guidelines to be developed or updated and they will be ready by the middle of 2021. So technically end of next year the industry will have a much clearer picture about the policies to be introduced,” he said.
“IMO consists of 107 member states, some are developed countries others developing, each with different economic conditions between them, so it is not easy to reach consensus between all member states. But the rating system is a very powerful tool and it can be used by the market for commercial activity. So once specific guidelines are developed it will be working very effectively, and I hope experts will realise this soon,” he added.
Kitack Lim agrees on the collective approach required to address the issue: “Alternative fuel, new energy resources are the most important elements for the implementation of decarbonisation. We need to intensify R&D into alternative fuels. We have a special fund for R&D issues and the public and private sector need to work together as a team to develop the carbon free fuels of the future.”
Posidonia is organised under the auspices of the Ministry of Maritime Affairs & Insular Policy, the Hellenic Chamber of Shipping and the Union of Greek Shipowners and with the support of the Municipality of Piraeus and the Greek Shipping Co-operation Committee.