Customers of Shipping Expect Considerable Progress on CO2

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By MarEx 2018-04-08 20:15:09

In the debate on decarbonizing the shipping industry underway at IMO headquarters this week and last week, the voice of the industry’s customers, shippers, can get left out, says Global Shippers' Forum (GSF) Secretary General, Chris Welsh.

The GSF represents 40 shippers’ organizations internationally, in Africa, Europe, North America and Australasia. These include all of the world’s major retailers, major motor manufacturers, chemical industry companies and global food and drink producers. Welsh says they represent a cross-section of the economy, from small shippers up to the very large. 

On talks last week at IMO about levels of ambition, he says: “The industry needs to make clear progress with a plan for how it is going to substantially reduce its emissions. That’s required not only by other U.N. bodies, such as the UNFCCC discussions more generally on climate change, but also in the wider community that expects the shipping industry through the IMO to make considerable progress in this area.

“We share that ambition and believe the shipping industry has to come up with a meaningful level of ambition to achieve those objectives.”

Why do shippers think this is important? “Shippers themselves are having to comply with their own industry initiatives and mandatory arrangements for reducing their carbon emissions in the manufacture and distribution of their products. They’re caught within national targets to make their commitments to climate change.

“Many shippers are signed up to the Greenhouse Gas Protocol, particularly chapter 3, which deals with transport. Many of those companies are committed to measuring and reporting their wider supply chain emissions, including maritime transport and aviation.”

What measures being discussed at IMO would work?

“We’ll go with the most practical way of getting there,” says Welsh. “Most of the short, medium and longer term measures are supported by GSF. We do need further debate on the slow steaming proposal, as that would have quite considerable cost on the supply chain.”

The GSF co-sponsored a paper with a range of E.U. states and some small island states at the last MEPC, specifically looking at transport cost implications of various measures.

There are plenty of energy efficiency approaches that we could take, says Welsh. “In various discussions previously on fuel data collection issue, we stressed that there would be clear benefits and incentives provided by greater transparency. Especially if shippers were in a position to determine the energy efficiency of vessels when they’re making a choice.

“The shipping industry and some member states wouldn’t support that. Confidentially was vital. We don’t agree with that, but that’s what the IMO has agreed.”

It’s likely the European Commission will pursue its own initiative in this area. GSF was involved in the earlier discussions with the Commission working group analysis.

Will shippers pay more for cleaner transport? “It’s not at that level of debate. Industries have got to meet their wider commitments. Manufacturers and retailers are already contributing considerably to achieve the wider UNFCCC requirements. The responsibility is on the shipping, aviation and other transport sectors, to come forward with measures to reduce carbon.

“How one does that is a legitimate question. If it is done in a way that penalizes customers, and is likely to harm trade, clearly customers are going to react against that.” However, Welsh says, you don’t see vehicle manufacturers putting on surcharges to meet its climate change objectives when they sell to customers.

“Many shippers are working closely and constructively with their transport providers, on how efficiencies can be made, and on how voluntary carbon reduction arrangements can be made. A lot of these big corporations are needing to be able to measure their carbon footprint in their logistics chains.”