BSMC is a group of North American maritime-related businesses “committed to accelerating the transition of waterborne transportation in Canada and the United States toward net-zero GHG emissions.” On the call, Parker sat down with David Cummins, BSMC’s Executive Director and President, with moderation by Alan Ginsberg, whose day job is Chief Financial Officer of BSMC member company McAllister Transportation.
Michael Parker, Chairman of the Steering Committee of the Poseidon Principles noted that many of the US and Canadian maritime businesses follow rules enacted by different agencies than those related to international carriers, who are regulated by the International Maritime Organization (IMO). He said, “I hope that what we’ve done [with Poseidon Principles tied to IMO measurements of carbon intensity] in the global sphere will be applicable to the North American lenders.”
In explaining the Poseidon Principles, where data from IMO calculations for carbon intensity, the CII, is infused into banks’ loan pricing decisions he emphasized: “This is about transparency…what we are doing here is trying to be transparent for the benefit of Society as a whole”. The IMO has set an objective of shipping getting to “net zero” by around 2050, with measurement of banks’ portfolios following the same trajectory downward towards that goal.
Cummins, a Shell veteran, opined that: “Transparency of data, and the quality of data, are going to be critical in getting to net zero….but I don’t think that there’s been enough discussion over how the data is used, and what data is relevant.”
He also expressed the view that: “If you rely on calculations, rather than direct measurements of things like greenhouse gasses, you can make the wrong decisions…I think that we are still too immature in the accuracy and the understanding of data to start doing things like holding people accountable for good and bad performance- we haven’t even defined what good and bad is.”
He highlighted findings within the BSMC research that concluded, “The IMO measurement of CII is wrong, and it’s wrong by a lot.” He cited efforts by member Harvey Gulf International Marine, which operates LNG fueled offshore service vessels. In related work, member Overseas Shipholding Group, not mentioned on the call, has also added realism- providing relevant voyage data on its tankers in the Jones Act trades.
Moderator Alan Ginsberg asked Parker about concrete steps that could be taken to incentivize the roughly 20 banks involved in Jones Act vessel lending to move forward in their efforts to bring clients forward in the voyage towards net zero.
After re-emphasizing the role of other agencies (besides the IMO) overseeing North American maritime interests, he said: “I think that this is an opportunity for the BSMC to design something with those 20 lenders (on a confidential basis) to actually come with some form of measurement.” He also urged the BSMC to include vessel owners, such as McAllister, in its drafting efforts, which would enhance credibility and allay fears that “outsiders” would be imposing their dictates on maritime businesses. “I think that this is a great opportunity…for the BSMC to take ownership of this process.”
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