The shipping industry, currently in the midst of an over-capacity crisis that has toppled at least one major international shipping firm, must now come to grips with a new demand to reduce sulfur emissions, improve fuel standards and generally take greater action in addressing its role in battling climate change.
The International Maritime Organization (IMO), a United Nations agency tasked with crafting shipping regulations, is
Both shipping and air travel, deemed to lay outside of national borders, were largely untouched by last year’s Paris Agreement on climate change. Both are major contributors to global carbon emissions, with shipping contributing 2-3 percent of global CO2 output annually,
Chief among the IMO’s concerns as it meets this week is the
Sulfur is an agent for climate change but it is also perceived as a global health hazard, with the IMO
For months, action by the IMO was resisted by the global shipping industry, which is suffering from hard times. The building and trade boom of the early 2000s created a tremendous demand for shipping capacity, but that demand has slowed and left the major firms with hundreds of thousands of tons of spare capacity.
The stress drove major firm Hanjin to bankruptcy, leaving its fleet
Bimco, a global shipping group, has
Yet several major firms have now
The EU is pushing for the higher standards to be imposed sooner rather than later. They are joined by China, which already
The decision of these firms to support climate change measures is likely a reflection of a growing realization in many global industries that state-enforced environmental regulation is something of an inevitability; that the impact can be better managed if the industries themselves participate in the regulatory process; and, with concern over climate change increasing globally, it would suit major firms to appear on the “right side of history,” as it were.
To meet new standards, ships can switch to low-sulfur fuels, install scrubbers or modify their ships to burn liquefied natural gas (LNG), a low-sulfur, low-CO2 alternative. Should this option be
Experts have expected new fuel standards for years now and the industry has been bracing for changes in environmental regulation. While resistance will continue, it seems likely that shipping, like aviation and other industries, will have to conform to new state-mandated environmental regulations, as political pressure to combat climate change grows.
By Gregory Brew for Oilprice.com
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