2035 and all that: Global warming, shipping emissions and acronym soup

2035 and all that: Global warming, shipping emissions and acronym soup

Before diving into the acronym soup in which this subject floats, I would like to say something:  When I last wrote on this subject, I found myself being “trolled” by several people, including someone who thought it would be a good idea to try to get me fired from my day job. I have news for that person.  I don’t know much about IT, but there are people who do. Ich weiß wer du bist. Wenn Sie es erneut tun, wird jeder wissen, wer Sie sind.

More helpfully,  a friend whom I have known for  some thirty-five years, and who is one of the largest shipowners in Greece, tells me that he had tried to explain to several other owners that, if everyone cut emissions by ten per cent by slow steaming, something that is immediately attainable, the positive effect on everyone’s freight rates would be more than ten per cent, but that more than half of the people he spoke to didn’t understand what he was telling them. I can understand why he has made a fortune in our business; what I cannot understand is how the others are still in it.

The next seven paragraphs involve anagrams. Skip them if you like.

The Marine Environment Protection Committee (“MEPC”) meeting this week at the International Maritime Organisation (“IMO”) is going to look at a short-term strategy to get us through the next five years. I think my friend described that, in the paragraph above – SLOW DOWN! It is not beyond the wit of man to work out ways in which such a simple measure can be “policed”, and the actual business of penalising those who don’t choose to comply (this is merchant shipping…) need not be that hard, either.  Give the PSC people something more useful to do than flicking through folders of paper certificates.  Pay whistle blowers (works for the USCG…) If we assume that most ships are going to be buying low sulphur fuel after 2020 there is a powerful incentive to slow down, right there…

And then there is the Long Term. If you are an IMO delegate from one of the four nations  (Argentina, Brazil, India and Saudi Arabia, hereinafter referred to as “the half bricks”) who have submitted a position paper arguing for no regulations at all before 2023, and for the IMO’s target to be to do something or other by the end of the century, rather than by 2075, you are confusing the long term and the short term very badly indeed, because your short term goals, which we presume are cheaper shipping, have affected your ideas about a future so distant that your children will not live to see it. You are not kicking the can down the road, you are punting it out of sight, and you don’t know who you might hit with it.

2050 as the “end date for shipping emissions of greenhouse gases” has been proposed by the Pacific Islands Forum and endorsed by the EU.

Meanwhile the OECD International Transport Forum (no, not that “ITF”, this “ITF” used to be called the “CEMT” – I did warn you about the acronyms) say that we can get there by 2035, if we really try.. Very significantly, so do the European Shippers Council, who are to shipping what the bond market is to politics.

We cannot really decouple the short and the long term. For the long term target, forget 2075 and all that.  I think that 2035 will prove to be necessary, but for the moment, let’s think about 2050. That is far enough away for hardly any ships afloat, under construction, on order, or being vaguely thought about, today, to survive to see it. Which means that no investment that has already been made, or even thought about, can be affected. So why would anyone have a problem with 2050 as the date at which the carriage of goods by sea should cease to emit any greenhouse gases to the atmosphere? If they do, they are not thinking straight

Lastly the ICS (yes, that ICS) is, if its Chairman, Esben Poullson, will permit me to say so, being a bit waffly. I agree with Esben that the target proposed by the EU is “unlikely to achieve consensus support”. That does not make it wrong; it means that those who oppose it should change their minds, because they are wrong. This is not a trivial issue, nor is it one on which our species can indulge in the luxury of compromise.  Given the distance already travelled towards the Paris objectives by some very important shipping nations, it seems not unreasonable to assume that they are likely to continue towards that objective, rather than away from it with the half bricks.

No more acronyms, I promise. Merchant shipping and civil aviation were excused from compliance with the Paris goals but it is already clear that neither shipping nor aviation should have been excused, (and indeed aviation has already admitted as much) because our emissions are hardly trivial, and the educated general public is starting to notice, and to ask questions about it. Silly tricks like using 2008 as the base line will be seen through as the frauds that they are.

IMO boss Kitack Lim himself has urged the need to “set ambitious goals”. He is right.

I have been saying for some time that the nature of our industry is changing, and that whereas in the past, market issues determined the fate of shipping enterprises, in the future, regulatory issues will do so. Shipping has been the Last Frontier for old style independent free competition.  That frontier is just about to close. I recommend old style shipping people to watch the old John Ford Western, “The Man Who Shot Liberty Valance”. It is set far from the sea, and makes no reference at all to matters maritime. It deals with the closing of a frontier, and the speed with which regulation overtakes those who love their freedom and their independence of action. The process is not reversible. The direction of travel is one way, and the speed of travel is increasing.

Related Posts

28 Comments

  1. Peter Gartsjoe
    April 3, 2018 at 5:19 pm

    Great article

  2. Arun
    April 3, 2018 at 5:38 pm

    this is good article, i love this

  3. Tony Fordyce
    April 3, 2018 at 5:38 pm

    I don’t want to appear to be nit-picking, but I think I’m right in saying that there is a degree of confusion here between anagrams and acronyms, and that the 2nd sentence of the 4th paragraph needs a bit of editing?

    1. Andrew Craig-Bennett
      April 3, 2018 at 6:09 pm

      You are quite right. Totally my fault. “Never type with the spill chequer engaged!”

  4. Vince Jenkins
    April 3, 2018 at 6:32 pm

    Spot on! I suspect if the deal agreed is not adequate, the EU will impose, for EU shipping, what the planet and mankind actually needs.

  5. Johan Roos
    April 3, 2018 at 7:17 pm

    The IMO has since long worked to do away with prescriptive rules and move to functional requirements. Sometimes adding a lot of confusion for those trying to abide by said rules, but overall a sensible philosophy. Why then, should we now move to a prescriptive speed regulation? What’s of interest is how much comes out of the funnel. The IMO should set the emission requirements and then let the industry develop the solutions (on a related note, why isn’t anyone challenging civil aviation to reduce their speed too…?).

    1. Andrew Craig-Bennett
      April 3, 2018 at 8:34 pm

      I assume that you are being humorous, but the physics of aircraft operations are very differently to those of ships. The fuel efficiency of, and by extension the emissions of GHG from, aircraft are governed by entirely different criteria, and most civil transport aircraft are optimised to fly at the most fuel efficient height and speed. (It was why Frank Whittle invented the jet engine…)

  6. Johan Roos
    April 3, 2018 at 7:20 pm

    The IMO is moving towards goal based rules, so why should we now agree to prescriptive speed limitations? Set the CO2-emission standard and let the industry find its solutions. By the way, why isn’t anyone challenging civil aviation to slow down too?

    1. Andrew Craig-Bennett
      April 3, 2018 at 8:28 pm

      Who says it is prescriptive? The originator of the idea does not say so. He says “reduce speed so as to cut emissions by ten per cent” – a number which will vary from ship to ship – and enforce that.

      1. Johan Roos
        April 3, 2018 at 11:52 pm

        And if I can achieve a ten percent reduction through electrification of my ferry? Would I still need to reduce my speed? To what end?

        To explicitly say that ‘speed must be reduced’ is prescriptive. To say that ’emissions shall be reduced by ten percent’ is goal based. No need to conflate the two.

        1. Andrew
          April 5, 2018 at 5:06 am

          Johan, why should anyone care whether it’s goal based or prescriptive?
          What one should care about are results.
          It is not feasible to retrofit scrubbers on the entire fleet currently on the water, moreover the infrastructure is not ready yet (so it’s not solely a ‘shipping’ issue), while there are concerns about the impact of constant use of Low Sulphur Marine Gas Oil.
          A speed reduction is a low hanging fruit.
          Easy to achieve and easy to police.
          Good for the environment, and good for the market, so everyone would be happy.

          1. Andrew Craig-Bennett
            April 5, 2018 at 11:04 pm

            Andrew- Thank you.

            There is a tendency, in matters of maritime regulation, to be so keen to inspect the beetles in the bark of a tree that forest in which the tree is standing passes entirely un-noticed…

  7. Evan Jones
    April 3, 2018 at 7:31 pm

    The author assumes there is something wrong with CO2 emissions. I think high levels of CO2 should be encouraged. Plants grow faster with CO2. Mammalian metabolism does better with more CO2 and less O2. If global warming was induced by high CO2, the prolific Carboniferous period would have had high temperatures.

    1. Andrew Craig-Bennett
      April 3, 2018 at 8:37 pm

      I suggest that you move to the planet Venus. The atmosphere there is almost entirely composed of carbon dioxide.

    2. Trevor Elliston
      April 4, 2018 at 12:19 pm

      Evan, The historical records show a concurrency of increasing co2 with increasing temperatures dating back to the start of the industrial revolution when increasing amounts CO2 began to be generated by industrial processes in industrial quantities..outstripping what nature produced (including volcanoes) and could absorb.
      Coincidence?
      Many think not. The science of warming caused by co2 has been known since the 19th century …. Some then thought extra Co2 might be beneficial but changed their minds…

      The big money to be earned in climate change science, BTW, is not for the proponents of it, but is being paid out by some of the major producers of co2 , eg Koch….I call those climate change denying scientists, who they fund, directly or likely mostly indirectly, and there is a web of institutes who are used to channnel money to Climate Change denier scientists, Koch Suckers….

  8. George
    April 3, 2018 at 9:18 pm

    Andrew you have a natural talent for stirring up discussion.

    In principle, slow steaming would be an obviously natural candidate for a swift [albeit partial] solution. The only complexity i see is that it would be near impossible to enforce a mechanism design that would prevent unilateral deviations from the slow steaming protocol, put differently, each and every owner/operator is better off by not sticking to the deal.

    If all do so then no slow steaming equilibrium can be attained. And mind we are discussing of an industry that will go fervently after the last penny. These boys that manage the fleet could not subscribe to a slow steaming protocol when rates would not pay bunkers and whiskey for the crew. Believing that they would do it for the good of the planet is, i think optimism, at best.

    As regards the emissions thingy, of course we all are in favor of the long term prospect of this planet. And i would be the last to claim that IMO is working perfectly. Yet i am equally weary of the EU’s gameplay, primarily because i tend to see it as a means for them shoving a maritime EU ETS down the sector’s throat.

    If it ever went live, then we are talking big bucks, let alone the fact that they now have taken some steps along the learning curve, capitalising on the failures of the first EU ETS. In a nutshell none is to be trusted and none’s good intentions are to be taken at face value. Eventually it will be the allocation of interests that will, most probably, determine the result.

    In my humble opinion, no use of storable energy is without impact on the environment [from diesel to nuclear and batteries to biofuel]. Thus all it takes is a handsomely engineered solution [i.e. optimisation].

    TKS for taking the time to write from time to time, your thoughts are spot on and interesting.

  9. Andrew Craig-Bennett
    April 3, 2018 at 9:54 pm

    George,

    Thank you for your thoughtful comments. They bear on what I am really saying which is that far tighter regulation of shipping is inevitable and is the only way to avoid a “tragedy of the commons” as each shipowner tries to get the best result for himself – which is in effect the “cowboy culture” that we have today.

    We could take the slow steaming issue as an example.

    The “tragedy of the commons” aspect of slow steaming would have to be dealt with by regulation. One plan for doing this might look like this:

    The sea speed, laden light and indeed at “container draft” for each ship to emit 10% less than at 90% MCR, laden, in ballast and where appropriate at container draft would be calculated. It would then be for port state authorities to make a note of the time of DLOSP and time of arrival at the pilot station and compute the speed made on passage. If the ship were found to have been speeding, a very heavy fine would be imposed. And I do mean really heavy.

    We can note that civil aviation has gone for an ETS solution; I, like you, have very serious reservations about this.

    The only forms of ship propulsion that are “emissions free” in an everyday sense of that term are nuclear (perfectly possible, and I know that at least one of the major class societies is working on it, in detail) solar ( with a lot of reservations) and wind. I recall that the founder of one of the most admired Danish operators once told me that his first fixture, as a young broker, had been eight tons of hay in a wooden sailing coaster – how’s that for zero emissions!

    We may yet come back to that.

  10. Efthymis
    April 3, 2018 at 11:01 pm

    Interesting article. A few notes to consider are
    a) vsls’ speed vary depending on weather conditions; in rough seas you slow down and when weather improves you increase to recoup. Even if coast guard cares for the sum of the steaming days and see no problem, the days of higher speed kill slow steaming’s original reason.
    b) it is neither the owners nor the managers who decide about speed, but charterers. In a competitive market like shipping, being fast is important. Should charterers decide to add a clause in cp about slow steaming, things have serious chance to work right. Otherwise it is next to impossible.
    c) regulation works great at the right dose, otherwise it becomes poisonous; shipping is a very risky business and we all know the dangers of it. People who wanna put their money in they do it for making some serious profit. If the profit margin falls down to shore business levels, huge funds required to feed the world with goods coming from far distant places will get significantly less.

    1. Andrew Craig-Bennett
      April 5, 2018 at 11:17 pm

      Efthymis – in my day job I am responsible for ships that operate under time charter. If one of our charterers orders one of our ships to make thirty knots, it cannot be done. If one of our charterers orders one of our ships to burn high sulphur fuel oil in an emissions restricted zone, it could be done, but it will not be done, because neither we nor our colleagues afloat are interested in breaking the law.

      Regulation moves always in one direction – more of it. Capital is attracted into a sector not by the lack of regulation in that sector but by the rate of return available in that sector. If regulation causes the rate of return to fall, less capital will be attracted until the rate of return rises once more. Adam Smith called this the “invisible hand of the market”…

  11. Peter Nuttall
    April 4, 2018 at 4:00 am

    Another insightful article Andrew. The issue of increased regulatory function of IMO on this matter will be critical. The SO2 debate has shown that the industry will not take sufficient voluntary action without it. This raises important core principles as to how the IMO operates and the TI summary yesterday begins to pick up on these.

    It is essential to remember that the IMO is first and foremost a UN Agency. While far from perfect, the UN system is one that gives small and vulnerable nations, such as the Pacific States, the same voice (in theory) as any other nation state and is one of the few safeguards we have that allows our states to be heard and to participate in global decision-making.

    The key requirement for nations participating inter UN system is that they represent the interests of their citizenry – and all their citizenry – not the interests of their economic and industry partners. The industry participates in the IMO under its own colours not as a member and as of right but by invitation and as an observer . In its current positioning, ICS et al, are at danger of overstepping this invitation and privilege. Historically their dominance in IMO proceedings has been available to them due to the simple lack of external interest in the IMO workings – however, shipping is now centre stage for climate change and the global audience is increasing.

    I was quoted by Sam the other day as saying ICS’s call for compromise was disingenuous and I wanted to clarify my context for saying this. The Paris Agreement was an unanimous one by nation states – its was achieved by compromise. Much was traded politically to agree a global temperature goal – well below 2 degrees and effort for 1.5. So the compromises have already been made and agreed at nations states leaders level. ICS has no moral right to now attempt to pressure the same states to walk back this agreement which is effectively what they are demanding by calling for additional compromise. ICS were at Paris, their democratic opportunity to influence global making was exercised then.

    The IMO is a technical agency – it must implement the decisions made by world leaders meeting under UN mandate in Paris. It can not renegotiate them and any attempt by the IMO to do so will absolutely weaken the mandate they hold. If the IMO can not provide a clear strategy next week that gives reassurance that shipping will abide by the Paris Agreement, then they can have no complaint if EU ends the IMO global monopoly on shipping regulation and takes this on regionally.

    Have been interested to see shipping turning on its self and start critiquing the registries and class societies for not providing greater support to industry to resist change. Of course, the entire open registry system is there to allow shipping to avoid paying tax and remain anonymous so disingenuous for industry reps to go hunting them.

    Final point – yes, 1.5 to stay Alive is catchy – but tis not mine – it was a fav of Tony de Brum. When your entire nation is only 2m above sea level it is more than catchy – its reality.

  12. Andrew Craig-Bennett
    April 4, 2018 at 5:16 am

    Peter – I owe you an apology. It has just been pointed out to me by a Fijian friend that I have wrongly credited the Pacific Islands Forum with the position held by the Pacific Islands Development Forum, with which you are associated.

    And you were too polite to point it out.

    Sorry.

    And apart from that, all I can usefully say is “thank you for a most enlightening contribution”; one with which surely all sensible people must agree.

  13. Peter Nuttall
    April 4, 2018 at 2:16 pm

    The world would be such a better place if everyone had a Fijian friend Andrew. They are the most serenely happy and hospitable people imaginable. No apology needed, keep up the good work.

  14. Sam Chambers
    Sam Chambers
    April 4, 2018 at 2:29 pm

    Famous in Hong Kong (where Andrew and I used to work), of course, the Fijians for their superb 7s rugby performances

  15. Peter Nuttall
    April 4, 2018 at 3:57 pm

    Too true – but in the real world of 15 a side they struggle. Trying to recall who the current champions are ….

    1. Sam Chambers
      Sam Chambers
      April 4, 2018 at 4:25 pm

      Yes I seem to have forgotten .. just like yesterday’s cricket result …

    2. Andrew Craig-Bennett
      April 4, 2018 at 9:32 pm

      I will never forget Waisale Serevi. The very beau ideal of a perfect sportsman. Now coaching in the USA.

  16. Jeffrey Blum
    April 5, 2018 at 8:05 am

    Dear Andrew and all ~ what really splendid comments to a really splendid article. Most of your correspondents make points which are worthy of serious note by the IMO and others… Oh if only the USA would wake up !

    1. Andrew Craig-Bennett
      April 7, 2018 at 12:17 am

      Thanks Jeffrey – on behalf everyone.