68% of shipping execs worry about lack of uniform rules on green tech adoption

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Global shipping executives are interested in green technologies but are afraid the lack of standard regulations could lead to inconsistencies among various jurisdictions, according to a new report by the Institute of Marine Engineering, Science & Technology (IMarEST).

Over two-thirds (68%) of global marine industry executives believe that a lack of uniform international environmental regulations will impede adoption of green technologies in shipping, according to the report that surveyed 220 marine industry executives from across the world.

“A fundamental concern for the industry is that the absence of a convention, or even a non-preemptive existing legal framework, leaves the field open to additional and potentially inconsistent regulations by different jurisdictions,” said the paper released recently by IMarEST with global law firm Clyde & Co.

Some international conventions designed to protect the marine environment are already in place. The International Maritime Organization (IMO) has the convention on global sulfur emissions limit which forces ship operators to use fuel on board with a sulfur content of no more than 3.5% m/m. This limit is set to be reduced further in 2020 to 0.5% m/m.

There is also the IMO’s International Convention for the Control and Management of Ships’ Ballast Water and Sediments, which came into force in September 2017 and is aimed at controlling the transfer of potentially invasive species. Under the convention, ships are required to manage their ballast water and sediments to a certain standard.

However, “there is a distinct lack of global regulation surrounding other key environmental issues,” said the report. For example, the marine industry is not currently regulated at a global level for carbon emissions. The IMO announced in November 2016 that it would begin to consider “a plan to develop a strategy” to reduce greenhouse gas emissions from ships to be adopted in 2023.

Conte Cicala, partner at Clyde & Co in San Francisco, commented: “This lack of a global legal framework has already led to California unilaterally adopting and implementing some of the very first low sulphur fuel and ballast water treatment requirements for ships calling on California ports.”

David Loosley, chief executive of ImarEST, said: “Formulating and introducing effective regulatory frameworks aimed at protecting the environment is always going to pose challenges for inherently global industries such as shipping.”

“An additional layer of regional or national directives complicates matters further, as vessel operators must ensure compliance with multiple rulesets, while manufacturers must develop technological solutions that satisfy multiple specifications,” he added.

Cost and barriers

According to the research, 64% think that green technologies will not place an unacceptable cost burden on ship operators.

Cicala added: “There is clearly an interest to explore the possibilities of green-tech. But the industry would prefer guidance, certainty and perhaps most importantly, uniformity.”

The report shows that key barriers to and issues around the adoption of new energy management solutions include:

Cost – 63% of global marine industry executives think that costs will impede the adoption of new energy management solutions

Fuel availability – 73% believe that fuel availability will strongly drive the market for energy management solutions

Crew skills – 64% worry that energy management solutions will place additional demands on crews

Cicala says: “Where fuel can account for as much as half of the operating costs for the shipping industry, it’s no surprise that the marine industry is keeping an eye on both the availability of fuel and cost of energy management solutions.”

“The cost of heavy fuel oil (HFO), which is the fuel most commonly used in ship engines has, by historical standards, remained relatively low over the past decade. As long as the cost of HFO is low compared to that of new energy management solutions, it’s unlikely that the benefits of the new technology will be felt as the industry will be unwilling to voluntarily invest.”

Photo: Marco Verch