A symposium has taken place in Antwerp entitled ‘Shipowners’ Initiative Towards Decarbonisation’, organised by the Royal Belgian Shipowners’ Association (RBSA) with the support of ECSA and Flows.
Over 170 participants from all over Europe attended the event on 21st June. The symposium was moderated by Julian Bray, Editor in Chief of Tradewinds.
Wilfried Lemmens, Managing Director of the RBSA, opened the debate by saying that the perception that the shipping industry does nothing to reduce its CO2 emissions is wrong. Compared to 2007, emissions reduced by 10%, mainly due to technical and operational measures, with slow steaming as a prime example, he explained. On the other hand, according to an IMO study, without appropriate interventions, emissions could set to increase by 50 to 250%.
Mr Lemmens calls for a dialogue with all stakeholders, including the shipyards and suppliers of marine equipment. Because, as was stressed by all the speakers, ‘decarbonisation’ is an issue that calls for urgent action: increased efficiency, technological innovation, access to finance, clear, uniform and applicable regulations are topics that should be tackled through a dedicated think-tank Mr Lemmens stated.
Mary Veronika Tovsak–Pleterski, Director of European and International Carbon Markets at DG Climate stressed Europe’s continued support for a comprehensive and global approach to issues such as the monitoring of emissions. However, according to Ms Pleterski, what the IMO has on the table for now misses transparency and depth. Europe has developed its own rules on monitoring of CO2 emissions which according to Ms Pleterski has contributed to the progress on the global fuel data collection system at IMO in Apri 2016. She stated that the EU MRV (Monitoring, Reporting and Verification) system will be adjusted once the IMO adopts a “robust and credible” global data collection system.
A member from the audience stated that the sometimes criticised EEDI (Energy Efficiency Design Index for new build ships) of IMO was becoming obsolete as it now appears that the majority of new vessels meet the standard of 2020 effortlessly already now. A tightening of the EEDI might help to deploy more innovative technologies which was too little the case now.
ECSA Chairman Niels Smedegaard insisted on the need to develop mechanisms that are global and apply to all ships. He expects the Marine Environmental Protection Committee (MEPC) of the IMO in October 2016 to agree on a global mandatory fuel data collection system. Some MEPs want to involve shipping in the European Emission Trading System which is unacceptable for ECSA and its members. Regional measures would have a direct distorting impact on European operators. A regional scheme would lead to carbon leakage as ships would start to avoid calling at EU ports. It would also gravely hurt the European short sea shipping sector, which would again be faced with an ‘EU only’ system.
It currently remains often groping in the dark as to what the best path to decarbonise exactly is. Market factors such as oil prices makes the future of LNG as a marine fuel currently much less rosy noted researcher Tristan Smith of the University College London Energy Institute. Dr Smith also referred to the RBSA study showing that energy efficiency is not only technical but also is influenced by operational aspects. Dr Smith stated that it is time to determine what the fair share is that the shipping industry should contribute as the carbon budget will decrease very soon.
A proper return on investment, especially in times of overcapacity and low freight rates, is a problem. The first step is to determine, in the realm of environmental regulation lying ahead of us, what exactly the right technology investment is. Ship owners build ships to have a lifetime of about a quarter of a century. Britt-Mari Kullas-Nyman, Director Retrofit of enginebuilder Wärtsilä made clear that the wrong choice of technology can be an expensive mistake.
Eddy Van Bouwel from IPIECA (the global oil and gas industry association for environmental and social issues) stressed that we need to have a more holistic approach to assess the overall impact of GHG policy. The topic is not as straightforward as it seems. What are the actual GHG savings when going to cleaner fuels (which have a higher GHG footprint), what is the energy density of the fuels and what is the cost per ton of CO2 avoided are issues that need to be considered to make the right choice. In any case “energy-efficiency always wins” Mr Van Bouwel stated.
Galen Hon from the Carbon War Room (CWR) stated that it is not impossible to create a profitable business from climate change. He did question the mantra of the shipping sector that “shipping is the most energy-efficient transport mode”. “Compared to what?” Mr Hon asked, as there is, in most cases, simply no alternative. Ports, banks, shipping registers … the greening of the fleet in his eyes could give a boost to reward energy-efficient vessels. Charterers have a crucial role as they could determine the charter rate by how green a ship is.
Ian Petty, the new Director of the Sustainable Shipping Initiative (SSI) stressed that selling a sustainability message in tough times is not easy but necessary. One of the major barriers to overcome is the split incentive where the charterer reaps the benefits of the ship owners’ technological investment. SSI is with success developing tools to overcome those barriers.
Ship owners have already done much and are preprared for “ambitious but realistic measures” to reduce CO2 emissions, said Niels Smedegaard, CEO of DFDS and Chairman of ECSA in his speech.
Alexander Saverys (CEO of CMB), Marc Nuytemans (CEO of Exmar shipmanagement) and Jan Gabriel (Technical director of DEME), who were in a panel endorsed that statement. Mr Nuytemans mentioned that the impact/role of crews is “huge” in this regard. Mr Saverys stated the need of affordable technology.
“We are in full crisis. Massive investments are not possible now” he stated. Mr Gabriel referred to the two LNG dredging vessels that are currently being built by DEME, the first of their kind in the world.
What can be the right decision for one is not necessarily the right one for the other. “For ships there is no one size fits all solution”, Christophe Tytgat stated.
As the new Secretary-General of Sea-Europe, the association of shipyards and marine equipment manufacturers, he made no secret of the fact that there is a lot at stake for Europe. Shipbuilding in the European Union is the world number two. The European equipment suppliers sign up for 52% of the world market of maritime equipment. Together they account for an annual turnover of not less than 91 billion euros. The choice they make is often to opt for complex types of ships and technological innovation. The more the decarbonisation card is drawn, the more chances they have to stay ahead of the game.