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Poseidon Principles, transparency of data, and getting to zero

I just want to assure people that I am not here to propose that the US maritime lenders should sign up to today’s Poseidon Principles,” was the opening statement by Michael Parker, the top shipping/ logistics banker at Citibank, speaking on a webinar organized by the BlueSky Maritime Coalition (BSMC).

Barry Parker, New York Correspondent

March 13, 2024

3 Min Read
Michael Parker
Michael ParkerPhoto: Global Maritime Forum

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.

Related:The Poseidon Principles — now it’s going to get difficult

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.

Related:Poseidon Principles – aligning with a new trajectories

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.”

About the Author

Barry Parker

New York Correspondent

Barry Parker is a New York-based maritime specialist and writer, associated with Seatrade since 1980. His early work was in drybulk chartering, and in the early 1990s he moved into shipping finance where he served as a deal-maker and analyst with a leading maritime merchant bank. Since the late 1990s he has worked for a group of select clients on various maritime projects, also remaining active as a writer.

Barry Parker is the author of an Eco-tanker study for CLSA and a presentation to the Baltic Exchange Freight Market User Group on the arbitrage of tanker FFAs with listed tanker equities.

 

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