The opportunities and challenges of the green revolution

It is easy to think of most environmental measures for shipping simply a cost, which in the difficult times the industry has had in the last few years, have been all the more unwelcome.

However, it is also clear the world has changed and sustainability has become the new watchword. Government officials from Japan and Norway stressed at the opening of the event that environmental concerns have to be turned into a form of growth for the industry and that winners in 21^st century would be the winners of the green revolution.

Certainly on the marine side the opportunities are obvious with a host of technologies on display at the exhibition designed to reduce fuel consumption, lower emissions and tackle issues such as environmental management. The cynic though might suggest that for the shipowner all these amount to is additional cost.

Attending a briefing by Maersk Line in Singapore at the start of the week though demonstrated that there are real benefits to be had. The Danish giant retrofitted 137 of the containerships in its fleet last year. Even at cost of $5m to $10m a vessel they said the pay back period is just one to two years. The company’s impressive rise in 2013 profitability despite lower container freight rates underscores the benefits it has been able to derive for its business.

In terms of winning in the 21^st century an interesting point was made, and that was that 19% of its customers by volume are now asking for tailored information on sustainability in terms of their shipping. These include some of the world’s biggest shippers, who will increasingly demand that their shipping is sustainable.

The other driver of green shipping, is regulation. Here the key issue for shipowners is regulations need to be consistent and predictable. In an industry where assets have a 25-year lifespan random changes in regulations or regional variations can have crippling cost implications.

The current status of the Ballast Water Management Convention is a prime example, where as it stands shipowners could spend millions on equipment that in a few years time could prove to be obsolete. No-one is arguing about the need for convention, but it does need to be fit for purpose and be flexible enough that it does not end up penalising early adopters.

Another issue is that if there regulations in place they have to be properly enforced. A failure to enforce regulations, for example on emissions, merely means that the good companies that play by the rules are effectively penalised for doing so.