Did BIMCO’s recent greenhouse gas (GHG) emission statement come at a wrong time?
Nobody can argue against the pressing issue of decarbonisation, it is however debatable on whether the industry is ready or even has the means to undertake it. At tough times like now, support towards the cause may be unlikely.
Emissions allowances as a measure
BIMCO in their latest note though addressed the pressing net zero issues, the odds of it garnering approval may be a long shot. Substantiating their stand was the rationale of parties responsible for carbon pricing. It said, “To succeed, new commercial solutions and shared responsibilities between charterers and shipowners will be required. So will collaborative efforts and responsibilities by stakeholders from shipowners, shippers and charterers to energy suppliers, shipyards, and engine makers.”
It emphasised that the commercial party responsible for setting the speed and route of a ship should also provide for emissions allowances or credits under a market-based measure (MBM). David Loosley, BIMCO Secretary General & CEO said, “We believe that in the case of a time charterparty, this responsibility should lie with the charterer, and under a voyage charterparty, it should be with the party that commits the ship to the voyage charter.”
“A note of caution is made in the position pointing out that excessive retroactive technical measures when applied to existing ship could result in premature retirement of ships. This could be in the form of unwarranted removal of needed capacity from the global supply chains and unnecessary additional emissions from building new ships,” Loosley added.
BIMCO’s persistent advocating and the MBM measure may reap unpleasant aftermaths which will take time to show. As it is, when conditions are not conducive for shipping, imposing loading may not be a wise move in the name of decarbonisation. The parties to be hit the hardest would likely be the owners of smaller vessels which to begin with, as they are currently struggling with tight chartering competition.
