2020: We’ve only just begun
We’ve only just begun…
The last 15 years have seen the shipping and bunkering industry subjected to a raft of legislative change with the 0.5% global sulphur limit seemingly being the end point of what many will look back upon as being a very trying time.
However, if any within the industry believed that the 2020 decision would signal calmer waters in terms of legislative certainty, they’re likely to find this is just the beginning.
Even before we’ve overcome the challenges of 2020, the bunkering industry is faced with yet another massive hurdle on the horizon, which will undoubtedly change the face of the global shipping and bunkering industries beyond all recognition.
At the most recent sitting of the Marine Environment Protection Committee (MEPC 72), which took place in London during the week commencing April 9 2018, an initial strategy was adopted for the reduction of GHG (greenhouse gas) emissions from ships.
The strategy put forward sets out a plan to reduce the total GHG emissions from shipping by at least 50% by 2050 (compared with the figures for GHG emissions in 2008). However, it must be noted that the strategy is not limited to a maximum reduction of 50% by 2050, as the initiative is also focused on phasing out GHG emissions entirely. Whether this idea of a 50% reduction by 2050 is considered too conservative a policy or on the flip side, whether it is looked at as being overly ambitious, it clearly sets a significant benchmark for the industry and the ramifications will be huge compared with what we’ve seen before.
Initial thoughts in the immediate aftermath of this strategy announcement would have to be – “How will this be achieved?” Granted, the lead-time is more significant than any we have seen, in relation to the time line laid out in Marpol Annex VI but again, the immediate response to this is – “It would have to be.”
A step of this magnitude would surely represent a future that is free from fossil fuels, but then that begs the question of “How does that impact upon what we expect to see over the course of the next ten years?” Our current position in the legislative time line cannot be underestimated. 2020 will certainly be a watershed moment that will change the global supply of fuels. However, if we consider the wider context in what will be required for a move to a low carbon future, the shipping and bunkering industries will be transformed in a manner that has not been seen since the transitions from sail to coal and coal to oil.
This long term objective is clear, but this then blurs the line in relation to the here and now and begs the question, “How does this impact upon the decisions we make for compliance post 2020?” This is a pertinent question given that current figures suggest the vast majority of owners will be faced with a fuel compliance solution for the 0.5% sulphur cap. Uptake of alternative technologies for compliance with 2020 has been limited, and despite an up-turn in the number of owners looking at solutions such as LNG, methanol and bio-fuels, only a very small percentage of the market will adopt these solutions in the short term.
That being the case we surely have to think about the requirements for GHGs in relation to 2020 and how the subsequent move to a 50% reduction in GHGs will impact upon the development of the bunkering industry beyond the short term.
Given what we now know in relation to the expectations of the industry moving forward, the reluctance to commit to a long-term compliance solution for the 0.5% sulphur cap could be viewed as a shrewd move. However, in reality it is much more akin to luck rather than good judgement as this new target will no doubt prompt a shift in focus away from traditional fuels towards innovative technologies and a low emission future.
The 2020 decision doesn’t signal a respite from legislative changes – more likely it provides the foundations on which further developments can be built.
More turbulent tides lie in wait, but the marine industry has navigated through change many times and I have no doubt it will be more than capable of adapting to a new reality once again.