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Shipping 'Under Environmental Siege'

by Ulrika Lomas, Tax-News.com, Brussels

03 June 2013


The newly-appointed President of the international shipping association BIMCO, John Denholm, has set out key initiatives he intends to spearhead during his two-year term, in particular tackling the mounting environmental pressures on shipping, which he pinpointed as being the most significant challenge to today's shipping industry.

Speaking at BIMCO's Annual General Meeting in Paris, Denholm said that the environment, and the many diverse challenges it raises, would be his theme for his period in office, with action on emissions and ballast water issues taking precedence.

Speaking to members, who cumulatively control more than 65 percent of world tonnage, Denholm highlighted that the challenges facing the industry now are "more difficult and more complex" than in the past. He pointed out that although the oversupply of tonnage might be nothing new, decisions from operators to buy new energy-efficient vessels, and pressure to do so, would undoubtedly delay a return to a more balanced market.

He cautioned that the situation is not being improved by the growing regulatory burden, which, he suggested, was driven by a "huge, politically inspired environmental agenda" which would impose significant costs on the industry at a time when it can least afford them. Emphasizing that the shipping industry remained the most environmentally friendly mode of industrial transport, Denholm suggested that the pressures the industry was under to reduce its impact on sea and air amounted to an "environmental siege." He added that, while it was impossible to stop environmental legislation, BIMCO is in a good position to ensure that regulation is "workable and affordable" and is implemented on a global basis, under the auspices of the International Maritime Organization.

Denholm said that the requirement for low sulfur fuels in both emission control areas and eventually on the high seas will be a "game changer" for many owners, who will be forced to burn low sulfur fuel or Liquified Natural Gas, in the absence of some spectacular advance in exhaust scrubbing technology. The availability of distillate fuel in sufficient quantities remains far from sure, he emphasized, adding that BIMCO is to use its influence to have the implementation of the legislation deferred.

A further major challenge for owners, said Denholm, is the IMO Ballast Water Convention, where owners are at "huge risk" of investing in equipment that subsequently may not meet approval.

On carbon emissions, he concluded in arguing that the industry has done what it can to reduce emissions through slow steaming and technical development, and said the association would continue to argue that there is nothing to be gained by imposing artificial mechanisms to achieve targets.

TAGS: marine

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