American Bureau of Shipping (ABS), a US-based classification society, has announced that it is developing simulations of potential green maritime shipping corridors. Such a tool will allow users to determine if a particular corridor is feasible, and what the costs will be.
Simulations will also allow us to determine the range of improvements that will be required, and the sensitivity of costs to many different choices, like size of bunkering facilities for different alternative fuels. These sorts of metrics are very important when deciding how much to invest in a green corridor development.
The article below doesn’t reveal very much. But it’s clear that a major classification society can play a major role to influence the greening of maritime routes.
Sanctions have made many ocean carriers change the registry of their ships to countries that are not involved in enforcing them.
Cyprus is one such flag state. As a member of the EU, Cyprus follows their policies on sanctions, which are among the strongest. So ships registered in Cyprus may not carry Russian cargoes.
Shipowners who want to trade Russian or Iranian goods, such as oil, can’t do it with Cyprus-registered ships. So they flag them elsewhere.
The Cypriot registry has lost about one-fifth of its tanker registry since sanctions were imposed on Russia. According to 2021 registry figures, Cyprus was 11th in dead weight tons (DWT) registered among the registries of the world, with over 1000 ships registered (not all tankers). This is a significant loss of revenue.
Cyprus is going to apply to the EU for compensation for the loss of registrants.
I’m not sure this is how to deal with the problem. There’s plenty of evidence that flag states are not dealing very well with environmental, social, and governance (ESG) problems in their own countries. By World Bank measures, there has been little improvement on many of their 68 ESG measures in Cyprus and other countries. They are thus less likely to be good enforcers of cooperative goals such as sanctions or emissions. Paying them for losses doesn’t seem like a good strategy.
There are already requirements for Cyprus to follow EU sanctions rules. As a flag state Cyprus needs to get approval from the EU for such rules as a tonnage tax discount. I think this is just following the rules they agreed to when Cyprus joined the EU.
It’s becoming obvious that there’s no way that enough sustainable aviation fuel (SAF) can be produced to meet the needs of air traffic.
Carriers are already suggesting they will need to play a little use in their path to ‘Net-Zero’ emissions. They plan to take advantage of strategies which allow them to keep emitting but using offsets with technologies that have been declared legitimate to shelter fuel use.
Such technologies concern purchasing carbon credits and developing carbon capture sources. But those do not actually reduce the emissions from air traffic.
I’m interested by what Glen Hughes, the director general of The International Air Cargo Forum (TIACA) said for the article below.
“What’s important is the capacity to monitor a company’s total ESG impact and activities in a manner that fulfils audit requirements and has a direct impact on investment decisions by equity firms and banks.”
Clearly this sidesteps serious ESG improvement for the industry and promotes a form of gaming the rules.
Promoting watered-down audit requirements and shaping how investment decisions are made by large investors clearly takes precedence over actually improving emissions. The premise that investment firms and auditors are to determine the world’s response to environmental improvement is patently ridiculous. TIACA is promoting a specious response. A harsh judge could call it a form of greenwashing.
To be fair, I will quote Mr Hughes again, from the same article, citing six questions to answer for supply chain officials:
“Am I being as environmentally responsible as I can? Am I using recyclable materials? Am I optimising transport? Am I using sustainable energy or compensating for emissions? Am I supporting global prosperity and economic growth? And how can I, my partners and supply chain stakeholders continually improve?”
Supply Chain and Logistics 