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June 10 2019

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16 The Journal of Commerce | June 10 2019 www.joc.com International Maritime A PROPOSAL TO reduce ship speeds as a means to cut greenhouse gas (GHG) emissions advanced in May but faces an uncertain future following a key environmental meeting at the Interna- tional Maritime Organization (IMO). Lowering ship speeds is seen as the most viable way to achieve a near-term commitment in the landmark 2018 maritime decarbonization agreement "to peak GHG emissions from inter- national shipping as soon as possible" as a down payment on the long-term commitment to reduce absolute emis- sions from shipping by 50 percent by 2050 compared to 2008 levels. Yet, in mandating efficiency upgrades for new container and cruise ships, the IMO's Marine Environmen- tal Protection Committee postponed consideration of short-term measures such as slow-steaming, and even then it was unclear whether container ships, which already have lowered their speeds significantly, would ever be covered by such a regime. According to one delegate, govern- ments at the IMO meeting in May did not do enough to take concrete actions to cut emissions from ship- ping, "meaning we still don't know how shipping will reach its targets laid out in its plan." Though it was agreed to take up speed reduction at a subsequent meet- ing, the fate of the measure irrespec- tive of ship type was unclear. As an example of the obstacles to any short- term agreement on how to peak green- house gas emissions in the near term, no agreement could even be reached on which of several possible short-term measures to discuss first, with Saudi Arabia, Brazil, and the US objecting even to the word "prioritization." A tweet from The Wall Street Jour- nal said, "At this point, it's basically dead," in reference to speed limits. Others were less certain: According to one close observer of the IMO, "I think it is too soon to definitively rule anything in or out. The discussion will continue." One reason for that is the growing pressure to act. The IMO found itself in the unusual position of having pro- testers outside its headquarters. Some see shipping overall as having dragged its feet on environmental matters and now is on the defensive. The idea of imposing speed restric- tions has divided the maritime indus- try, with container carriers staunchly opposed. Even speeds slower than those already implemented likely would require container lines to invest in additional old-technology tonnage to maintain weekly schedules, draw- ing down limited capital that might be unavailable for more efficient ships later on. No container carriers signed on to an April 30 letter to the IMO calling for speed restrictions. The letter had more than 110 signatures from ship- owners, many of them non-operating owners who would bear little of the cost of speed restrictions as compared to charterers. A recent analysis from SeaIntelli- gence Consulting found that average transit times since 2012 "have gotten progressively longer" in the Asia- Europe and trans-Pacific trades, with the exception of the Asia-Mediterra- nean routes. The short-term measures needed to peak greenhouse gas emissions from shipping as soon as possible can only come from operational changes such as speed reductions, which tells many the idea will not go away soon despite an overall drop in vessel speeds. Over the past decade, slower vessel speeds have contributed to low- ering fuel consumption and CO2 emissions by 18 percent, according to ship broker Clarksons. But in ensuring that the near-term commitment of the IMO to peak greenhouse gas emis- sions is achieved, mandatory speed restrictions are still seen as necessary. Speed restrictions are "the only way to comply with the environ- mental regulations imposed on us in the future," Philippe Louis-Dreyfus, chairman of Louis-Dreyfus Arma- teurs, a shipping company involved in commodities transportation, port logistics, and specialized shipping, told The Journal of Commerce. "An action on speed is the only way forward under the circumstances to reduce polluting emissions of ship- ping. I don't see any technical argu- ment good enough and relevant enough to oppose that idea," said Louis-Dreyfus, who is also the former president of the Baltic and Inter- national Maritime Council and the European Shipowners Association. "I am quite confident that some- thing of the kind will come out in a not-too-far future," he added. "On the one hand, as mentioned, it is, to my eyes, the only way to efficiently deal quickly with emissions, and on the other hand, it is a political mes- sage to the public." Despite the limited progress and fears from proponents that it could be removed from the agenda entirely, speed reduction remains on the table, the delegate said. Speed reduction and speed optimization are included on the agenda for the next green- house gas working group of the IMO in November. JOC email: peter.tirschwell@ihsmarkit.com twitter: @petertirschwell Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics Not dead in the water No consensus on lower ship speeds was reached, but the IMO will take it up again in November By Peter Tirschwell "An action on speed is the only way forward under the circumstances to reduce polluting emissions of shipping." The IMO is committed to reducing absolute greenhouse gas emissions from shipping by half by 2050 compared to 2008 levels. Shutterstock.com

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