Marine Log - June 2008 - (Page 4)

Nick Blenkey Senior Editorial Consultant Second Thoughts Dusting off the crystal ball o Year Book issue would be complete without a few forecasts and predictions, so let’s start with a fairly easy one. The move towards some sort of international carbon tax on emissions from shipping will pick up pace. IMO’s Marine Environmental Protection Committe has a Working Group on Greenhouse Gases from Ships. Short-term measures it has been considering include a proposal to establish a global levy scheme on marine bunker fuel to achieve GHG emission reductions. Under this scheme, all ships engaged in international voyages would be subjected to a bunker levy established at a given cost level per ton of fuel bunkered. The prospect of a global levy/credits scheme contributing to a GHG emissions reduction from ships was found “promising,” says IMO, although it concedes that several aspects would need to be clarified and worked on, including who would collect the levies and how the revenues would be distributed. The prospect of any U.N. agency collecting any kind of global levy on anything is nightmarish. But IMO might be a bit late at the starting gate. A bunch of national and regional entities are already eyeing shipping as a potential carbon tax cash cow. At the end of April, for example, legislation was introduced in the British Columbia Legislative Assembly seeking to impose taxes on fuel based on the carbon content. Ships would be subject to the tax, but would be eligible for rebates on fuel consumed outside of British Columbia. Everyone agrees that there is a need to reduce CO2 emissions from shipping. At N the moment, the only way to achieve that is by reducing fuel consumption. On May 2, the World Shipping Council (whose members represent over 90 % of world liner shipping capacity) issued a statement noting that “shipping lines worldwide are struggling as crude oil prices topped an unprecedented $119 per barrel this week, in turn pushing marine bunker fuel prices up past $552 per ton— a $26 per ton increase since the end of March alone. Bunker prices have risen 87% since the beginning of 2007.” The WSC says that carriers have been responding to the high cost of fuel by utilizing a range of operational adjustments. Beginning in early 2007, most container lines began restructuring their operations to address fuel price trends. They have: • redeployed ships among global trade lanes to optimize utilization • consolidated services through multicarrier alliances • consolidated routes to serve more locations with fewer ships • slowed sailing speeds to conserve fuel where possible within schedule • improved monitoring of hull and propeller conditions to reduce resistance and improve efficiency • adopted container trans-loading, street turns and other strategies to cut inland fuel costs. The WSC says that “considering that these steps have generally already been taken by shipping lines, there are limited additional operational measures that vessels can take to further reduce fuel consumption.” The WSC warns that environmental initiatives to address vessel air emissions will add to these growing costs. The WSC says it has fully supported the efforts of the U.S. and other governments to establish new environmental standards for vessel air emissions, and supports IMO’s recently agreed new fuel standards. But it warns that the cost of low sulfur fuels to be used in Emission Control Areas will be roughly double the cost of bunker fuel, thus creating even more upward operating cost pressures. The WSC says that the environmental community and regulators need to understand that fuel prices are already causing ships to minimize fuel consumption and minimize emissions. “Ships cannot afford to waste fuel and do not emit more CO2 than is necessary for the conduct of commerce.” Further taxes or charges on fuel consumption will not cause fewer green house gas emissions, but would only raise costs, and further add to inflation. WSC says it is also important to recognize that ocean shipping is the most energy efficient form on freight transportation— moving goods by ocean container can be 17 times more fuel efficient than transporting the same goods by air and 10 times more efficient than transporting the goods by road. Environmentally, greenhouse gas emissions can be reduced by shipping goods by sea.” No one at IMO should be talking about a “global levy” on bunker fuel. If anything, they should be talking about giving carbon credits for switching from other transportation modes to water. Alas, that last thought is not so much a forecast as wishful thinking! nblenkey@sbpub.com 4 MARINE LOG JUNE 2008 YEARBOOK www.marinelog.com http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - June 2008

Marine Log - June 2008 Contents Editorial Second Thoughts Update Inside Washington Innovation Needed to Meet Crew Shortage Optimism Abounds Despite Slowing Economy Can Shipping's Shopaholics Keep Up the Buying Binge? Can Congress Keep Navy Shipbuilding Off the Rocks? Fitting the Ultra-deepwater Pieces Together Generation Next Higher Demand, Higher Prices Demand Up For Large Combination Vessels The Dirty Truth About Emissions SSAS: Realizing Its Potential Fuel Saving Technology Newsmakers Tech News Contracts Events Buyer's Guide Website Directory ML Marketplace Tech Talk

Marine Log - June 2008

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