At The Prow

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Efficiency and transparency

Shipping could do with more far-sighted lobbyists. When it comes to the environment and the avalanche of regulations coming maritime’s way, those favouring the slow machinations of the International Maritime Organization (IMO), ie shipowners led by the International Chamber of Shipping (ICS), have been sideswiped in recent days by quicker witted other tranches of industry coming up with their own suggestions for how shipping ought to push ahead with cutting its carbon footprint.

There’s been plenty of calls for a carbon levy, which commodities giant Trafigura has said ought to be pegged at up to $300 a tonne, more than10 times higher than the ICS has proposed for its own touted decarbonisation R&D fund. Then there’s been the European Parliament diving ahead with plans to include shipping in the bloc’s carbon trading scheme within a couple of years.

Perhaps most amusing for those in the know has been the ICS’s reaction to the brand new Sea Cargo Charter, a global framework that allows for the integration of climate considerations into chartering decisions to favour climate-aligned maritime transport. Founding signatories of the charter include big names such as Anglo American, ADM, Bunge, Cargill Ocean Transportation, COFCO International, Dow, Equinor, Gunvor Group, Klaveness Combination Carriers, Louis Dreyfus Company, Norden, Occidental, Shell, Torvald Klaveness, and Trafigura.

The move sees charterers leapfrog regulators and the shipping industry itself in terms of detailing how emissions reporting will be carried out.

Wincing at the prospect, Guy Platten, the ICS secretary-general, argued on the day the charter was launched to much fanfare that due process at the IMO ought to have been carried out rather than charterers pressing ahead with their own greenhouse gas (GHG) reporting schemes.

“The initiative has some interesting ideas but we believe that it would have a better chance of success if it was to be aligned with the reporting requirements set out by governments and even the Poseidon Principles, to be agreed at the IMO following significant consultation and review, to ensure that the reporting requirements are as efficient as possible,” Platten said.

When Platten says emissions reporting standards should be agreed at the IMO, so as to make them more “efficient”, it’s important to bring readers up to speed with the backstory on this.

Many countries and NGOs pushed for including actual cargo carried in the IMO’s Data Collection System (DCS), to enable calculating EEOI (gCO2/cargo t-nm), but the industry led by ICS fought against it, not liking such transparency.

So now we only have enough information in the DCS to calculate fleet annual emissions rates (AER), as measured by gCO2/dwt-nm.

However, now shipowners are wising up that AER is harder to accomplish, so ICS’s own backlash against transparent emissions reporting requirements is biting it in the proverbials.

If ICS et al had just gone down the more transparent route five years ago, there would have been no need for charterers to sidestep the IMO/ICS club and set up their own scheme. ●