[110613.EN.SEA] BIMCO, International Chamber of Shipping Oppose Soaring Eco Costs

COSTS to shipping of environmental regulations are mounting dangerously, says Masamichi Morooka, chairman of the International Chamber of Shipping (ICS), formerly NYK's top man in Europe.

"Unless this is understood, there is a danger of creating real barriers to investment in our industry as we hope to move closer to recovery," said Mr Marooka, CEO of NYK-Hinode Line Ltd.

Speaking to a Nor-Shipping event in Oslo, Mr Morooka said that impending environmental legislation will cost the shipping industry more than half a trillion dollars between 2015 and 2025.

Mr Morooka echoed sentiments expressed in Paris by BIMCO's new president John Denhom, who told members that shipping had done its best to limit carbon emissions and so "there is nothing to be gained by imposing artificial mechanisms to achieve targets."

Mr Denhom, the new Baltic and International Maritime Council (BIMCO) president, said the formidable problem today is regulatory burden, complicated by a "huge, politically inspired environmental agenda".

Agreeing, ICS chairman Morooka said: "As many companies struggle to survive, we must persuade governments to avoid placing yet more straws that risk breaking the shipowner's back - and the straws are the impending costs of environmental legislation."

Mr Morooka said costs come from low sulphur fuel use, assuming that a 0.5 per cent global sulphur cap comes into effect in 2020, in addition to the 0.1 per cent sulphur requirements that are expected to be enforced in emission control areas in north west Europe and North America from 2015.

Huge costs were also being added by installing new ballast water treatment equipment to meet the mandates of the United Nations Framework Convention on Climate Change's Green Climate Fund, he said.

"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," Mr Morooka said.

BIMCO's Mr Denhom, also chairman of Scottish shipping company J&J Denholm, said shipping industry was still the most environmentally friendly mode of transport. "While it was impossible to stop environmental legislation, BIMCO was in a good position to ensure that it was 'workable and affordable' and was implemented on a global basis, with the International Maritime Organisation pre-eminent."

Another problem is the IMO Ballast Water convention because owners are forced to invest in equipment that may not meet approval in the end. "BIMCO will work hard at IMO to see the timetable for this regulation loosened," he said.

Source : HKSG, 11.06.13.