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“One statement, taken out of context, with representation and misinterpretation, that gets maximum coverage.” Thus spoke the president of the COP 28 summit in Dubai following a feisty debate where he stated there was “no science out there, or no scenario out there, that says that the phase out of fossil fuel is what is going to achieve 1.5 degree C.” Irrespective of whether some pesky journalist took the statement out of context, that is what grabbed the early headlines in Dubai. There must though have been plenty of other topics for discussion for the 80,000 reported visitors who headed to the Gulf for this latest climate change jamboree/energy summit. Let’s put aside any cynicism about the hefty carbon footprint of such events. Let’s instead accept that you can probably make progress when you gather people together who are united in a common purpose, although perhaps you don’t need 80,000 of them. The joint declaration by five leading shipping lines during COP28 when they called for an end date for fossil-only powered newbuildings and for the IMO to create the regulatory conditions to accelerate the transition to green fuels was a show of unity that will certainly be considered a step forward, although as with all issues related to regulation, there is probably a long way to go before it can be implemented - as always, the devil is in the detail. For liner companies with their established port networks, it is a lot easier to plan for the infrastructure which is needed for this transition than it is for the bulk shipping sector. The consolidation which has taken place in liner shipping over recent years means that the sheer scale of the five companies involved in this initiative gives it a fighting chance of success. Outside of liner shipping, the fragmented nature of the bulk carrier and tanker markets means it will be more of a challenge to secure such a commitment. Finding the technical solution to decarbonisation may prove much easier than finding the way to pay for it. As is apparent with so many elements of the green transition, the big question is how to pay for it and this is going to be particularly true in the volatile world of bulk shipping. Some notable companies have made massive investments in green shipping, such as Eastern Pacific and no doubt Euronav will spend a good portion of the $2.34bn raised from their recent sale of two dozen VLCCs on their own green commitments. These companies are, of course, giants of our industry. What about the vast majority of smaller owners with less than a handful of ships? It’s not just the need to raise capital in a challenging environment but also the cost of compliance with the increasing regulatory burden which now weighs heavy on owners. Will the green transition see the small shipowner disappear? Whilst we have not yet got all the answers to what is the best fuel for the future, we seem to be getting closer, but it is worth casting an eye over how other industries are managing in order to see some of the problems ahead for shipping. Electric vehicles were seen as the panacea for the motor industry’s decarbonisation, but sales of EVs in the UK (admittedly a small market in global terms) are now less than a fifth of all new car registrations and it is projected that in four years time they will only account for 38% of all sales compared to the earlier projected 67%. The main reason for this is the cost of EVs in a time of higher interest rates and all round belt tightening. Finding the technical solution to decarbonisation may prove much easier than finding the way to pay for it.

Who’s paying for all this decarbonisation?

COP28 brought together thousands for another meeting on the planet’s future, but as our special correspondent asks, even with all the good intentions, how are we going to pay for it?

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