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FOCUS ON FUEL SUPPLIERS SAYS CYPRIOT SHIPPING MINISTER

Friday, February 28, 2020 

Natasa Pilides (pictured) Cyprus’ shipping deputy minister believes that it is wrong for the focus of environmental regulation to fall on shipowners only and argues that the focus for greenhouse gas emissions should switch to fuel suppliers.

In an interview with Clean Shipping International Pilides said that the idea of a carbon tax levied on vessel operators can only be successful if such a tax is applied uniformly, “if it is a global phenomenon.”

“I suppose that’s something that will be discussed [at the International Maritime Organization (IMO)]” conceded Pilides, adding, “At the moment at the EU level this was met with some resistance, at least from our side because applying a regional measure is a problem. We’d need to evaluate it.”

According to the minister what is really needed in the maritime sector as far as greenhouse gas (GHG) is concerned is innovation and investment in new fuels.

“The whole world wants fuel to be more environmentally friendly, whether the consumer should subsidise that is a different matter, I think these companies [fuel suppliers] will have to invest. I think that there is no turning back and fuel producers will have to go down the road of innovation.”

However, the minister believes that the excessive focus of GHG regulation, and environmental regulation in general within the maritime sector has been on the shipowner and operator, but Pilides argues shipping is already cleaner than most transport industry sectors.

“I think its problematic that these steps are always taken with the focus on the shipowner and not the supplier of the fuel, that’s something we need to address in the future. It’s great that shipping is embracing the environmental measures, they’re necessary measures, but ultimately we need the contribution of people that are producing the fuels, otherwise how are we going to have the desired results, unless the shipowners turn into fuel producers themselves.”

Agreeing that some collaboration between fuel producers and ship operators has already taken place through various initiatives, but Pilides says that is a large-scale investment and not all operators can make these kinds of investments.

Pilides view is not isolated. Support for her view on the creation of alternative fuels through innovation from the fuel suppliers has come from Shell. At an IMO Symposium in November last year Dr Alexandra Ebbinghaus, maritime strategic project leader for Shell, told the audience that policies that enable a move to zero carbon are crucial to achieve the decarbonisation of the maritime sector.

To develop these zero carbon fuels, Ebbinghaus believes the industry must collaborate to develop the technology and we need the policy that enables this to happen. “We need a policy framework that is supportive,” of the development of zero carbon fuels, she said.

Ebbinghaus explained, “What we’re looking for is a global GHG emission framework that will provide the certainty that people are looking for and that will push the faster reduction of GHG. All the low carbon solutions will be much more expensive than existing fossil fuel solutions, so we need to look at how we develop a level playing field.”

According to Ebbinghaus one way to speed up the development of alternative low carbon fuels is to create a market which will encourage that development, and that means a price mechanism that will see new technologies operating at similar levels to existing fuels.

“How do you compete if your new vessel is so much more expensive to build and operate [compared to existing vessel designs]?” Ebbinghaus asked.  Adding, “So we feel that market-based measures such as carbon trading or carbon taxes is one way of achieving a level playing field.”

While Shell supports a carbon price mechanism and agrees that this mechanism must be globally applied the move to push new fuels is coming from more regional centres, in this case the EU.

New fuels are on the agenda of Mrs [Ursula] von der Leyen, the new president of the EC, according to Pilides and it’s positive that shipping is visible finally as an industry and it’s an opportunity for the industry to show that it is taking measures and not to always be mistaken as an industry that doesn’t care.

“It’s an opportunity to be part of the conversation and rulemaking, the GHG strategy is opportunity to plan and prepare better than in the past,” she said.

Showing a lot of empathy for the plight of ship operators Pilides pointed out that there has been a lot of uncertainty for owners, for example with the IMO 2020 plans.

There is a need to show how it will be regulated, we need people who have the expertise, the quality, the training requirements and we need input from suppliers also,” explained the minister.

Returning to the theme of IMO 2020 and the sulphur cap the minister said that IMO needs more studies to make a decision on washwater discharge from open loop exhaust gas cleaning systems (EGCS).

However, she made clear that there is “No blanket ban intended for scrubbers from the EU.”

Even though the minister can see that shipowners have a heavy burden with the weight of new regulation already imposed or expected to be introduced within the next few years Cyprus is very much in favour of the newly proposed sulphur emission control area (SECA) across the Mediterranean.

A localised proposal would not work for Cyprus, according to Pilides, it has to be the whole of the Mediterranean. And in a meeting in early December of 2019, COP 21, a meeting of all but two of the states that border the southern European sea there was an agreement to establish a roadmap that could see the creation of a Mediterranean Sulphur Emission Control Area (Med SECA) by 2024.

The Conference of the Parties (COP) 21 in Naples agreed a timetable for studies into the creation of a Med ECA starting in December 2019 with the deadline to submit an information document prepared by COP to the International Maritime Organization (IMO).

The information document will then be presented to the Marine Environment Protection Committee (MEPC) 75 which starts on 30 March 2020. A series of meetings and information gathering will refine the COP proposals for a Med SECA before the proposal is submitted for approval at MEPC 78 in the spring of 2022, providing the proposals are agreed by COP 22.

The plan is to consider the amendment to MARPOL Annex VI at MEPC 79 in the autumn of 2022, with the acceptance of the amendment not earlier that 1 September 2023, “provided agreement was reached at MEPC 79, and unless prior to the proposed date, not less than one third of the Parties or Parties the combined merchant fleets of which constitute not less than 50% of the gross tonnage of the world's merchant fleet, have communicated to the Organization their objection to the amendment.”

If the road map runs to plan, the Med SECA could be enforced from 1 March 2024, but cannot enter into force before that date.

Prior to December’s Naples meeting there was concern that some countries may try to scupper the Med SECA deal. “Certain countries are not signatories to MARPOL Annex VI, Egypt and Israel are not, but that would not stop them from signing up to a Med SECA,” said one Naples participant.

The source went on to say that for the Med SECA to operate successfully all Mediterranean countries must participate. In addition, impact assessments for the Mediterranean have been requested by Greece and Malta before the SECA can be agreed by those states and this is seen as a possible stumbling block for the progress of the Med SECA in the future.

But for Cyprus and its shipping deputy minister the Med SECA is a positive move. “Personally I think the benefits will be tangible and will be worth doing.” Pilides added, that, “We want all countries to be fully on board before it [the Med-SECA] goes ahead.

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