Sunday 18th Nov, 2018

INDUSTRY OPINION: Shipping goes green – what it means for industry

Image: Shutterstock
Image: Shutterstock

AFTER much debate and speculation, the global shipping industry has committed to cutting its emissions by at least half of its 2008 level by 2050. It is a historical decision that will have real operational impacts for the international trade sector. Without mitigation measures, pollution from shipping was predicted to increase by 250% in the same period. While some countries objected to the draft (specifically the US and Saudi Arabia), other countries were pushing for more ambitious targets and the full de-carbonisation of the industry.

Like all things in life, you can’t please everyone. Some environmental groups have called the deal “insufficient” and other stakeholders were pushing for more urgent and drastic measures, including a target of zero emissions by 2035.

So, how will these targets be achieved? That detail is yet to be finalised. With the first steps taken, the responsibility of achieving these targets now falls on negotiators, who are to deliver a final strategy in 2023.

Several different measures have been proposed and have been the subject of passionate debate. Slow steaming has been the most contentious of the proposals, with countries like Chile (cherries) and Argentina (meat) expressing clear opposition, as did other countries and stakeholders with an interest in perishable goods. The Australian Peak Shippers Association (APSA) expressed a similar position on behalf of Australian shippers in our 26 March DCN editorial Australian Shippers Reject Mandatory Slow Steaming Measures. These sentiments were reinforced to the Department of Infrastructure, Regional Development and Cities before their delegation left for London. The editorial generated substantial interest, with slow steaming apologists claiming that the impact on transit times will be minimal for our region (around 48 hours), and that some of the economic savings may be passed onto shippers through freight negotiations. I hope that is the case but based on historical precedent, it is not a likelihood I would like to rely on!

Ultimately the way forward must be a long-term solution based on economic incentives and disincentives, not short-sighted quick wins.

Last year I had the pleasure of meeting Olaf Merk from the International Transport Forum (part of the OECD). His report Decarbonising Maritime Transport provides us with a useful exploration on the viability of the different proposed measures and their impact.

The OECD explores several measures in the report including:

  • Operational solutions (lower speeds, ship size increase, ship-port interface);
  • Alternative fuels/energy solutions (liquefied natural gas [LNG], Advanced biofuels, hydrogen, ammonia, electric ships, wind assistance); and
  • Technological solutions (contra rotating propeller, air lubrication, main engine turbo compounding propeller, aux turbo compounding series, organic Rankine cycle waste heat recovery, Flettner rotors, kites, engine derating, speed control of pumps and fans, block coefficient improvement).

The IMO agreement has come at a time when consultants NDEVR Environmental have claimed that Australia’s emissions are once again increasing in 2017 and are the highest on record.

In Victoria, an online consultation was launched in March by an Independent expert panel advising the Victorian government on targets to reduce the state’s greenhouse gas emissions between 2021 and 2030. These interim targets are a legislative requirement under the Climate Change Act 2017 and will help keep Victoria on track to a long-term goal of net zero greenhouse gas emissions by 2050. Logistics and transport will be a central component of that strategy.

Some shippers and freight forwarders are not waiting for directives from the IMO and are voluntarily pursuing major emissions reduction programmes. Membership of the Global Logistics Emissions Council (GLEC) reflects some of the biggest players in world trade including Kuehne + Nagel, Volkswagen, DHL and TNT. Scope 3, Australia’s consultee to GLEC, will be presenting at the Global Shippers Forum event in Melbourne on 10 and 11 May 2018.

Freight & Trade Alliance (FTA) and APSA has sought a detailed debrief on the IMO meeting from the Department of Infrastructure and the Global Shippers Forum, and we look forward to providing more detail as it becomes available.

* Travis Brooks-Garrett is secretariat at Australian Peak Shippers Association

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