Maritime Regulator Seeks to Overcome Deep Divisions on Shipping Emissions

Maritime Regulator Seeks to Overcome Deep Divisions on Shipping Emissions
Costas Paris April 3, 2018 https://www.wsj.com/articles/maritime-regulator-seeks-to-overcome-deep-d...

An International Maritime Organization meeting this week comes as vessel operators say they face a patchwork of rules without common global targets

The world’s top maritime regulator faces deep political divisions as it tries to map out a plan at meetings in London this week to cut carbon emissions across the shipping industry.

Shipping was excluded from the Paris climate agreement adopted under a United Nations framework in 2015, with governments entrusting the International Maritime Organization to come up with a consensus on carbon reduction measures from ocean going vessels.

IMO Secretary-General Kitack Lim has said shipping will do its part to contribute to the Paris accord, but the regulator has been criticized of moving slowly, leaving open the potential for regional regulators like the European Union to move first to enforce their own rules.

Shipping contributed about 3.1% of total annual carbon dioxide, or CO2, emissions in the period from 2007 to 2012, according to an IMO study. But vessel emissions are projected to increase by between 50% and 250% by 2050 as global trade grows and carriers add capacity if no action is taken.

The debate has deep political fault lines, with many mainly developing countries arguing that strict emission standards will hurt their economies.

‘A number of operators won’t be able afford it and could either go belly up or get out of shipping altogether.’
—Basil Karatzas, a New-York based shipping consultant.

The European Union, Japan, China, and several other Asia nations are pushing for ambitious reductions in emissions, while the U.S., Argentina, Brazil and Saudi Arabia, among others, want lower targets.

“It’s a highly-charged debate to find acceptable pollution levels that could cost the industry hundreds of billions of dollars,” said Basil Karatzas, a New-York based shipping consultant. “The IMO emission cuts are necessary and must be adopted, but a number of operators won’t be able afford it and could either go belly up or get out of shipping altogether.”

The cost comes on top of an estimated $40 billion bill for the industry to cut sulfur emissions, either by using cleaner fuels or by installing a device that treats a ship’s exhaust before releasing it. The deadline for the sulfur cuts in Jan. 1, 2020, while the deadline for the CO2 emissions will be debated in the London meetings.

Options for vessel operators may include using clean-burning fuels like methanol, hydrogen and ammonia, as well as implementing electric propulsion, hull design improvements and slower sailing speeds.

Although individual ships don’t generate huge CO2 emissions, overall maritime transport “is putting a considerable strain on the environment,” said Junichiro Ikeda, chief executive of Mitsui O.S.K. Lines, Japan’s biggest shipping company. “Therefore we have to and would like to respond proactively to the IMO discussions.”

The International Transport Forum, an autonomous intergovernmental body within the Organization for Economic Cooperation and Development said in a report last month that the shipping industry could cut carbon emissions by between 82% and 90% by 2035 using currently available options.

The biggest concern to shipowners is that if the IMO fails to come up with solid plan, the European Union will include shipping in its Emissions Trading Scheme, where a cap is set on the amount of greenhouse gases that can be emitted by various companies.

—Chieko Tsuneoka contributed to this article.