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IMO: Postponing GHG reduction strategy ‘not an option’

Positive outcome from Intersessional Working Group on GHG reduction is key to future work of IMO, says Secretary-General.

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The below is an opening statement from IMO Secretary-General, Kitack Lim addressing delegates at a recent meeting to work on the reduction of GHG emissions from ships:

It is a pleasure for me to welcome you to the third session of the Intersessional Working Group on reduction of greenhouse gas emissions from ships.

I know that you have a heavy workload this week and I am sure that you all wish to start working together as soon as possible, so I will be very brief and direct.

The decision by the MEPC and endorsed by the IMO Council to establish this intersessional working group was made because of the importance and significance of the subject matter.

The Organization needed you to have a robust discussion during the first meeting as a basis for defining the outline of the strategy. You have done that.

It needed you to identify core elements and start developing text for the draft Initial Strategy during the second meeting – and you have done that, too.

Now you are called upon to finalize the draft Initial Strategy for adoption next week at MEPC. I would like to take this opportunity to express my wholehearted appreciation to all of you for the thoughtful and positive contribution during the past journey of challenges.

I have met many of you since the last intersessional meeting and I have listened carefully to your views and proposals on how best to proceed with the finalization of the Initial Strategy. During these conversations, I have been impressed by the strong support you have shown for the process and the willingness you have expressed to adopt the Initial Strategy at MEPC 72 next week. Importantly, you have indicated the need for compromise, if we are to succeed.

Chair, distinguished delegates,

If you allow me I’d like to draw on an analogy which I think should guide your negotiations. This is inspired by the COLREGs – the maritime “rules of the road”: any action by a ship to avoid collision shall be “positive, made in ample time and with due regard to the observance of good seamanship”. Therefore my message is that you do not wait for the last minute at MEPC to make the compromises and find the solutions.

I also wish to express a word of caution: postponing the adoption of the Initial Strategy, to a future session of MEPC, should not be an option. We have already approved the roadmap for developing a comprehensive strategy on reducing GHG emissions from ships, and this roadmap includes adoption of an Initial Strategy at next week’s Committee meeting. You are cordially invited to remember that a positive outcome from this group is key to a success next week, and for the future work of this Organization.

Chair, distinguished delegates,

I exhort you: work together this week, and the adoption of the Initial Strategy next week will be a success for us all. Never before has a meeting generated such great interest – not only within the maritime community but far beyond, as well. Your task will not be easy at times; the stakes are high and the expectations even higher. However, I am confident that, with IMO’s renowned spirit of cooperation and your esteemed wisdom and under the able leadership of your Chair, Mr. Sveinung Oftedal of Norway, you will rise to the challenge, respond to the expectations and, thus, serve well the worthy cause of protecting and preserving the environment.

Photo credit: International Maritime Organization
Published: 5 April, 2018

 

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Bunker Fuel

Bunker Holding, 123Carbon and BV launch carbon insetting solution

Bunker Holding has concluded its first blockchain-powered carbon insetting operation in a new partnership with 123Carbon and Bureau Veritas.

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Bunker Holding:Bunker tanker vessel supplying marine fuel to a cargo ship at anchorage

Marine fuel supplier Bunker Holding on Thursday (16 May) said it has concluded its first blockchain-powered carbon insetting operation in a new partnership with carbon insetting experts 123Carbon and Bureau Veritas.

This insetting partnership allows for the additional cost delivery of lower carbon, alternative marine fuels – such as sustainable biofuel – to be shared by carriers, freight forwarders, and cargo owners within the same value chain; allocated based on a globally accepted book and claim methodology.

“We’re excited to work with 123Carbon and Bureau Veritas, as we believe in complete transparency of how insets are created and transferred. Insetting is not new, but one concern within the maritime sector is under what circumstances alternative fuels are supplied, and who owns the emissions reductions,” said Tobias Troye, Head of Carbon Solutions at Bunker Holding.

By combining its alternative fuel supply expertise, its global access to low-carbon fuels and extensive carrier network with 123Carbon’s secure platform, Bunker Holding said it can offer carriers, freight forwarders, and cargo owners complete transparency and assurance regarding how their insets reduce maritime emissions.

“We are delighted that Bunker Holding not only uses our advanced platform for the issuance of the certificates, but has also chosen a fully branded solution to deliver the certificates in a secure environment to its customers,” said Jeroen van Heiningen, Managing Director of 123Carbon.

Working with 123Carbon’s blockchain-based insetting platform, and Bureau Veritas as third-party assurance partner to verify the fuel intervention and all related documentation, ensures that all insets are issued according to Smart Freight Centre’s Book & Claim methodology and 123Carbon’s assurance protocol.

To facilitate the intervention, Bunker Holding connected three different parties: the cargo owner, who wishes to reduce their scope 3 emissions and is willing to pay the “green premium”, the ship operator, to decarbonise its vessels through the use of biofuels, and the biofuel supplier, to deliver safe, high-quality low-carbon fuels. Due to the commitment from the cargo owner to purchase scope 3 insets, Bunker Holding was able to offer the biofuel at a more competitive cost to the ship operator, enabling the carrier to use biofuels instead of conventional fossil fuels.

“As a group, we are operationalising our decarbonisation strategy, and one key component has been to develop our alternative marine fuel supply capabilities, among others by securing fully certified biofuel availability in more than 100 ports around the world. The relative higher cost of alternative fuels may still prevent carriers to bunker it. However, carbon insetting helps bridge that gap, as it enables cost sharing and also sends an important demand signal to alternative fuel producers to scale up production,” said Valerie Ahrens, Senior Director of New Fuels and Carbon Markets at Bunker Holding.

 

Photo credit: Bunker Holding
Published: 21 May 2024

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Methanol

Singapore-based X-Press Feeders takes delivery of methanol dual-fuel vessel

‘As the first of its kind built in China, it features a dual-fuel engine that can run on green methanol, spearheading Europe’s first feeder network powered by green methanol starting in Q3,’ says firm.

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X-Press Feeders takes delivery of methanol dual-fuel vessel from China

Singapore-based global maritime container shipping company X-Press Feeders on Thursday (16 April) announced the successful delivery of its first-ever dual-fuel vessel, built by Yangzijiang Shipbuilding Holdings.

Departing from Shanghai to Rotterdam via Singapore, the vessel marked “a giant leap” in the company’s efforts to sustainable shipping.

“As the first of its kind built in China, it features a dual-fuel engine that can run on green methanol, spearheading Europe’s first feeder network powered by green methanol starting in Q3,” the firm said in a social media post. 

Manifold Times previously reported OCI Hyfuels will be supplying X-Press Feeders with green methanol in the Port of Rotterdam from 2024.

Manifold Times also previously reported the company aims to create ‘green routes’ early next year to the Scandinavia-Baltic region of northern Europe by using its dual-fuel vessels.

The maritime shipping company, which operates a fleet of more than 100 vessels, has 14 dual-fuel vessels on order and due for delivery from 2024 through to mid-2026. X-Press Feeders’ 14 dual-fuel ships are each at 1,200 TEU capacity with length overall (LOA) of 148 metres.

Related: X-Press Feeders launches its first methanol dual-fuel vessel “Eco Maestro” in China
Related: OCI Global to supply X-Press Feeders with green methanol bunker fuel in Rotterdam
Related: Singapore-based X-Press Feeders to launch world’s first feeder network powered by green methanol
Related: Evergreen Marine and X-Press Feeders to launch first green methanol-powered feeder network in Europe
Related: X-Press Feeders inks MoU with six European ports for green shipping corridors

 

Photo credit: X-Press Feeders
Published: 20 May 2024

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Bunker Fuel

Allianz: ‘Shadow fleet’ of tankers involved in at least 50 incidents including oil spills

Vessels have been involved in at least 50 incidents to date, including fires, engine failures, collisions, loss of steerage, and oil spills; shadow tankers also participate in ‘dangerous practice of STS transfers in the open ocean’.

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RESIZED Shaah Shahidh on Unsplash

Allianz Commercial marine experts shared some of the major consequences of growing volatility and uncertainties from war and geopolitical events, climate change risk, including the threat the rise of the ‘shadow fleet’ poses to vessels and the environment and the multi-faceted impacts of rerouting. 

The following are excerpts from the original expert risk article by insurer Allianz :

Recent incidents in the wake of the conflict in Gaza have demonstrated the increasing vulnerability of global shipping to proxy wars and disputes. Between November 19, 2023, and the beginning of April 2024, there were more than 50 attacks against merchant shipping in the Red Sea by Houthi militants in response to the conflict. We have also seen the first total loss of a vessel, the first fatal attack, as well as signs that the crisis may have spread following the seizure of a container ship by Iranian forces in the Strait of Hormuz, the world’s most important chokepoint for oil shipping. The Houthi military group has also warned it would target any ships heading to Israeli ports if they are within range.

Disruption to shipping has persisted longer than expected and is likely to remain for the foreseeable future, says Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. “While we have seen sporadic attacks in the past, the conflict in Gaza has opened the flood gates. Even if a political solution is reached, we may see attacks continue as there is clearly now an opportunity for those wishing to disrupt shipping in the Red Sea and beyond. Ultimately, shipping has become a ripe target for those wishing to wage a proxy war. It opens avenues for terrorists or militia groups to get recognition and hit global markets.”

Rerouting brings supply chain, trade, risk, inflation, and environmental challenges

Attacks against shipping in the Red Sea and Middle East waters, closely following on from the ongoing disruption caused by drought in the Panama Canal, have amounted to a double strike for shipping, causing yet more issues for global supply chains, as well as significantly adding to the distance vessels must sail.

The attacks in the Red Sea have severely impacted Suez Canal transits, while a lack of rain and the El Nino phenomenon contributed to the second driest year in the Panama Canal’s history, also affecting transits.  Both routes are critical for the transport of manufactured goods and energy between Asia, Europe, and the US East Coast.

At the start of 2024 transits in the Suez and Panama canals were down by more than 42% and 49% respectively, compared to their peaks. Whichever route vessels take, they face lengthy diversions and increased costs. For example, avoiding the Suez Canal adds at least 3,000 nautical miles and 10 days sailing time to each trip, rerouting via the Cape of Good Hope.

Businesses that source goods and components from factories in China and South-East Asia have faced delays and higher costs from longer transit times. Some reported rises of 300% for container hire, and logistical delays, adding up to three to four weeks to delivery times, creating cashflow difficulties, and component shortages on production lines.

Such experiences have thrown the shipping industry and the issue of supply chain resilience into the public consciousness, says Khanna.

“Supply chains have been disrupted by a series of events in recent years, from extreme weather and climate incidents, container ship fires and groundings, through to the pandemic and conflicts in Ukraine and the Middle East, not forgetting the recent Baltimore bridge collapse.

“How should the shipping industry and its customers address this challenge? In today’s interconnected environment it is even more important to have a ‘Plan B’ and alternative options. An unexpected event can have a domino effect globally. Shippers around the world should consider diversification of their supply chains and in some cases nearshoring and onshoring might be an option.”

Increased transparency is also part of the solution, particularly when it comes to tracking cargo. While the global risk environment for shipping has changed significantly in recent years, the average shipper still knows very little about the location of their cargo, which makes it very difficult for them to put effective contingency plans in place to minimize disruption. Ultimately businesses will need to update their approach to cargo risk management and business continuity planning, says Régis Broudin, Global Head of Marine Claims, Allianz Commercial.

Rerouting will also require a shift in the shipping industry supply chain, if large numbers of vessels switch to alternative routes around the Cape of Good Hope for a prolonged period. Container lines tend to ply the same established trade routes, but rerouting will require alternative bunkering, supply, repair, and maintenance facilities. The risk environment could be impacted suggests Wayne Steel, Senior Marine Risk Consultant, Allianz Commercial. For example, storms and rough seas could be more challenging for smaller vessels used to plying coastal waters, especially where crews may not be sufficiently trained and equipped for such conditions.

Other areas impacted include container capacity, older vessels being kept in service as longer journeys means an increasing demand for ships, inflation – according to Allianz Trade analysis, a prolonged period of disruption in the Red Sea could cause it to increase by +0.5% – as well as the environment. The disruption in the Red Sea, combined with factors linked to the Panama Canal and the Black Sea in the wake of the Ukraine war, could erode the environmental gains achieved through ‘slow steaming’, as rerouted vessels increase speeds to cover longer distances. The longer distances caused by rerouting container ships from the Suez Canal to the Cape of Good Hope result in an estimated 70% increase in greenhouse gas emissions for a round trip from Singapore to Northern Europe. Shipping diversions from the Red Sea are already cited as being a primary cause of a 14% surge in the carbon emissions of the EU shipping sector during the first two months of 2024.

Ukraine war: ‘shadow fleet’ risk to vessels and environment

A gradual tightening of international sanctions on Russian oil and gas exports over the past three years since its invasion of Ukraine has resulted in the emergence of a sizable ‘shadow fleet’ of tankers, mostly older vessels that operate outside international regulation and often without proper insurance. This situation presents serious environmental and safety risks in key chokepoints where oil is shipped.

Russia is not the only country to operate a shadow fleet. Iran and Venezuela have used such tankers to circumvent sanctions and maintain oil exports. Estimates put the size of the dark fleet at between 600 to 1,400 vessels, roughly a fifth of the overall global crude oil tanker fleet.

Much of the shadow fleet is likely poorly maintained and may not have undergone appropriate inspections. Shadow tankers also participate in the dangerous practice of ship-to-ship transfers in the open ocean, as well as turning off Automatic Identification System (AIS) transponders to obscure their identity. Vessels have been involved in at least 50 incidents to date, including fires, engine failures, collisions, loss of steerage, and oil spills. The cost of dealing with these incidents often falls on governments or other vessels’ insurers if one is involved in an incident.

“As long as there are sanctions on countries like Russia and Iran, the shadow fleet looks here to stay,” says Justus Heinrich, Global Product Leader Marine Hull, Allianz Commercial. “Given the age of the vessels in the shadow fleet, safety is a big concern. Often these vessels are at the end of their operational lives and are used in a high-risk business.”

Note: The full article by Allianz can be found here

 

Photo credit: Shaah Shahidh on Unsplash
Published: 20 May 2024

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