- The coronavirus pandemic is dealing a serious blow to investments aimed at cutting shipping emissions.
- The European Community Shipowners’ Associations, says an industry survey in May found that three-quarters of its members would either halt or reduce investments in cleaner ships.
- Members of the International Maritime Organization, the United Nations’ marine regulator, have agreed to improve fuel efficiency by 30% by 2025 and slash greenhouse-gas emissions by half by 2050 from 2008 levels.
- With the global economy and trade spiraling downward this year and prospects for a recovery deeply uncertain, the priority for many shipowners will be staying in business, leaving climate-change considerations on the back burner.
A recently reported news article in the Wall Street Journal written by Costas Paris deals with the shipping industry at present focusing on the revenues during these hard times rather than on environment.
Chartered ship return due to coronavirus
“We’ve got four chartered ships returned in June and another two will come back in July,” due to coronavirus restrictions, said a European owner of 14 dry-bulk and general cargo vessels who asked not to be named. “We all care about the environment, but right now I’m trying to persuade my bankers to extend repayments of existing loans. Business is tanking and renewing our fleet is unthinkable.”
No environmental benefit is intended
Ioanna Procopiou, chief executive of Greece-based shipping consulting firm Prominence Maritime, told a webinar in June that there is no clear path to decarbonizing the industry.
“A lot of what is being suggested is not practical or available on a large scale, and in many cases it does not even yield the environmental benefit that is intended,” she said.
The ECSA survey said with the exception of tankers, revenue for various shipping sectors has declined by as much as 60% since the lockdowns aimed at limiting the spread of Covid-19 took effect. It said 52% of its members are looking at not renewing fleets.
New generation ships require major financing
Any move to order a new generation of ships will require major financing, but banks have largely stood back from investment in the maritime sector until the pandemic comes under control.
“One of the less reassuring results that emerged from the report is the lack of national, regional or local measures put in place against liquidity issues or that these are not applicable to the shipping industry. In the case where measures exist, banks do not offer those options in practice; and when they do, the administrative burden and costs outperform the benefits,” ECSA said.
IMO Secretary-General Kitack Lim has said the cost to the shipping industry to protect the environment “will be the biggest in history.”
But with little money to go around, his organization’s targets look increasingly difficult to meet.
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Source: The Wall Street Journal
