UK Chamber: Speed Limits May Not Help Decarbonization

The UK Chamber of Shipping is warning that French and Greek proposals for a worldwide speed reduction rule could delay the transition to a low-carbon future. In the lead-up to MEPC 74, France has proposed a new IMO speed limit on several vessel classes in order to achieve CO2 emissions reductions. Fuel consumption rises quickly with vessel speed, and small reductions can potentially result in large savings. 

Over 100 shipping companies - notably in the liquid and dry bulk sectors - have signed on to an open letter supporting the French initiative in advance of the next MEPC meeting, which is scheduled for May 13-17. 

"Recent history shows that reducing the global fleet's operational speed after the 2008 economic crash led to dramatic reductions in GHG emissions. This speaks to the real-world effectiveness of a potential prescriptive speed measure in helping achieve reduction targets," the group wrote in support of the French proposal. "Our preference would be to set maximum annual average speeds for container ships, and maximum absolute speeds for the remaining ship types, which take account of minimum speed requirements."

For some vessel operators, global speed limits could be good for business: as speed goes down, transit times go up, so more ships are required to carry out the same amount of work - raising demand for vessels and pushing up day rates. However, the UK Chamber of Shipping warned that the measure could create poor outcomes for others. 

"Unfortunately, despite the very positive intention of the proposals to assist in the reduction of emissions, that is not matched in the details and risks leaving gaps in the IMO’s decarbonisation plan. Its implementation and enforcement are also problematic," said UK Chamber of Shipping policy director Anna Ziou in a statement. "There is an argument that cutting ships speed further might deliver fuel savings for current ships. However . . . it would not be the first time that when looking on these assumptions from a more realistic setting, the savings could be minimal or even negative. Besides, this would be negated by the loss of capacity which would require additional vessels to be built." 

In addition, as vessel speeds are already at their lowest levels in a decade, a low-speed rule could give a "false reassurance that action in reducing emissions is being taken and distracting the IMO from other effective measures," Ziou wrote. 

In May, MEPC will discuss member state proposals to add detail to last year's CO2 framework agreement. Last April, the IMO reached an "initial strategy" to cut the shipping sector's overall CO2 output by 50 percent by 2050. The framework agreement calls on the industry to begin emissions reductions as soon as possible and to pursue efforts to phase out carbon emissions entirely. It also includes a reference to bringing shipping in line with the Paris Climate Agreement's temperature goal, which seeks to limit global warming to "well below" two degrees Celcius.