Speaking to delegates at the opening of the Nor-Shipping event in Oslo, Norway, Masamichi Morooka, chairman of the International Chamber of Shipping, said that impending environmental legislation will cost the shipping industry more than half a trillion dollars between 2015 and 2025.
“As many companies struggle to survive during the difficult years ahead, we must persuade governments to avoid placing yet more straws that risk breaking the shipowner’s back – and the straws to which I refer are the impending costs of environmental legislation,” he said.
Morooka explained that much of these costs will result from the switch to low sulphur distillate fuel, assuming that a 0.5 percent global sulphur cap comes into effect in 2020, in addition to the 0.1 percent sulphur requirements that are expected to be enforced in emission control areas in North West Europe and North America from 2015. The costs of installing new ballast water treatment equipment and the potential contribution that the industry might have to make to the United Nations Framework Convention on Climate Change’s Green Climate Fund could also be “significant,” he added.
“Many of the expensive environmental regulations that are about to enter into force were conceived in a different world, at a time when shipping markets were booming and finance for retrofitting had not dried up,” Morooka continued, stressing the need to communicate with regulators. “Unless this is understood, there is a danger of creating real barriers to investment in our industry as we hopefully move closer to recovery.”