Tuesday, October 26, 2021

As Politicians Gather for COP26 Shipping Determines to Take Its Fate in Its Own Hands

Industry Collaboration is the Key to Success in Ending Pollution at Sea
Shipping News Feature

UK – WORLDWIDE – As the good, the bad and the ugly travel to Glasgow, or not as the case may be, be prepared for enough hot air emanating from the politicians attending the COP26 meeting to knock that global temperature up a notch or two on its own.

When even Her Majesty the Queen is overheard saying there is too much talk and a scarcity of action it is time to look for others to act on a climate crisis of which there can now surely be no doubt. The questions are what needs to be done and how can it be achieved on a large enough scale to make the essential difference?

The shipping industry, which many in the profession will feel gets blamed for causing far more damage than it actually does in terms of climate degradation, certainly recognises not just the advantages to the world at large, but to its own image by being seen to act, and is taking the whole thing a lot more seriously than many industries which have the power to create much greater improvements

Transport is certainly responsible for a large percentage of overall pollution, however ocean freight is significant mainly because of the sheer amount of mileage it clocks up annually carrying the huge tonnages required to satisfy the demands of the modern consumer. Air travel companies point out their industry only produces a fraction of overall pollution, but it does it whilst carrying a tiny amount of people and freight compared to other modes.

Road haulage certainly is responsible for its share of pollution but the drive toward electrification is pushing ahead, acceptable, but only assuming the generating method is non-polluting. Whilst the International Maritime Organization (IMO) calculates only 3-4% of global air pollution emanates from ocean shipping, it is currently responsible for a large percentage of the Nitrogen Oxide (NOx) emitted, points reiterated at the IMO’s own recent Zero and Low Emission Forum.

So if politicians continue to waffle whilst sitting on their hands it will be consumer pressure which drives the demand for a greener planet, which in the modern world is heavily influenced by both social media and the commercial press, not often the most reliable of sources.

The mission for shipping then is unilateral action supported by a full blown and persistent media campaign to illustrate what the industry is doing and how effectively it is doing it. This however must not be ‘greenwashing’, the tactic which companies such as Coca Cola are regularly accused of, and one which they use the media to great effect by highlighting certain aspects of their operations whilst avoiding any mention of others.

So as COP26 is setting up to open on 31 October the campaign is beginning with the International Chamber of Shipping (ICS), that represents 80% of the world’s merchant fleet and 90% of global trade, announcing a slew of the great and the good from the industry who will attend its ‘Shaping the Future of Shipping’ Conference at the University of Strathclyde’s Technology & Innovation Centre which commences on 6 November. MSC is the lead sponsor of the event, with DNV, BP and Hapag Lloyd among the other sponsors and the list is a who’s who of senior shipping executives and interested parties*.

Confirmed attendees include Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), Rt Hon Nusrat Ghani, MP, and Francesco La Camera, Director General of International Renewable Energy Agency (IRENA). Ministers from Belgium, Cyprus, Greece, Panama and Kenya have confirmed their attendance whilst others will also include Joan McNaughton, Chair of The Climate Group, Lord John Browne, Chairman of BeyondNetZero, and Javier Manzanares, Deputy Executive Director, Green Climate Fund.

The conference is seeking to create solutions and collaborations between national governments and industry that will advance proposals to create zero emission ships, accelerate investment and ensure that the transition is equitable. Guy Platten, Secretary General of the International Chamber of Shipping commented:

“It is inspiring to see the level of participation and calibre of those attending Shaping the Future of Shipping. We are bringing together the largest ship owners in the world, alongside energy, finance, and climate heavyweights and international politicians. This unprecedented meeting of minds has been in the making since 2019, and shipping’s official COP26 event shows the scale of our commitment to decarbonise the sector.

”We are bringing together people that create plans, not promises, and who will not just discuss the challenges within industry but the wider energy transformation required to tackle climate change. Shipping is the backbone of the global economy. This has never been more apparent than now. As world leaders look to a green future, they must eliminate the political risk around decarbonisation policies. This starts with the energy transition in key industries which underpin global trade.”

One name appearing amongst the sponsors is that of Danish classification society DNV, and this week Knut Ørbeck-Nilssen, CEO of its Maritime Division, spoke out on what he sees as the industry’s only way forward with respect to climate improvements. Whilst eschewing any one fuel or method as a ‘silver bullet’ he is clear as to how to make the changes needed, saying:

“Collaboration is the true fuel of the future. Zero emissions, efficient, limitless in supply, and completely free, it’s maybe the only thing that will get us all to our carbon neutral destination. Everybody wants to cool the planet down, but not everyone is prepared to pay for it.

“We’re nowhere near reaching the ambitions laid out in the Paris Agreement and, in the aftermath of the Intergovernmental Panel on Climate Change (IPCC) report no one can deny the scale of the challenge ahead. If we are to stand any chance of addressing the issue we must all change. And I’m not talking about shipping here, not in isolation at least, I’m talking about everyone, a structural, behavioural, fundamental, societal change.

”We need green fuels and for that we need help, think about the early movers who are putting increased CAPEX on the table to fund vessels with alternative fuels (currently about 25% of new build tonnage). To do this they need the support of their shareholders, the backing of banks, and the commitment from charterers and cargo owners to utilise these ships.

“But because of the costs involved they need higher rates. So, a cargo owner has to pay this and that will most likely drive up the cost of the end product. Will consumers that have grown accustomed to hunting for bargains online, racing to the bottom in terms of cost, pay inflated prices for products they know have been transported sustainably? Are we, all of us, prepared to pay more to avert global warming?”

"If we don’t have fuel (and by that I mean sustainable fuel) in the right places, in the right quantity, at the right prices to make sense in a competitive shipping market, then this clean fuel will not fulfil its potential. So, we need collaboration from policymakers, energy suppliers, the broader transport sector (which must also transform), and other industries across the board to make it happen. This is a difficult undertaking, but it’s essential to get the foundations in place or we can’t build towards the future we want to see.”

Photo: The University of Strathclyde’s Technology & Innovation Centre will host the ICS Conference.

*Representatives from international shipping will include Rolf Habben Jansen, CEO, Hapag-Lloyd AG, Christine Cabau Woehrel, CEO, CMA Ships and Head of Fleets and Assets, CMA CGM, Bud Darr, EVP Maritime Policy and Government Affairs, MSC Group, William Fairclough, Managing Director, Wah Kwong Maritime Transport Holdings, Hong Kong SAR, Lasse Kristoffersen, CEO, Torvald Klaveness, Jeremy Nixon, CEO, ONE Group, Vandita Pant, Chief Commercial Officer, BHP, Esben Poulsson, Executive Chairman, Enesel PTE and Chair, International Chamber of Shipping, Svein Steimler, President and CEO, NYK Group Europe Ltd, Bo Cerup-Simonsen, CEO, Maersk McKinney Møller Center for Zero Carbon Emissions, and Kitack Lim, Secretary-General of the International Maritime Organization.