The Daily View: Shipping’s green reset

THE colour green fell out of fashion for big business a while ago now.

Trump’s re-election, higher interest rates and inflation, wars in Ukraine and the Middle East, and weaker-than-expected government efforts all combined to snuff out the ESG fervour of 2021 for the Shells and BlackRocks of the world.

For a while though, it seemed like shipping could be an exception.

Global regulation through the International Maritime Organization, the industry’s support for a carbon levy, and the majority support for the resulting Net-Zero Framework in April were a cause for hope.

But the IMO’s failure to adopt the NZF in October (see Lloyd’s List’s passim ad nauseam) puts it more into line with the global trend.

To be sure, US bullying could be the main reason the NZF is now on life support for a year, with a grim prognosis. But it wasn’t the only reason.

There was plenty of unease about the plan even among supporters, and about the economic and practical flaws of fuels such as hydrogen and ammonia in the months before the Big Vote That Wasn’t.

Greek Prime Minister Kyriakos Mitsotakis, fresh from his break with Brussels over the NZF, recently wrote that Europe could not afford to stay on its green path.

“We cannot allocate money based on vibes,” he wrote in the FT, adding: “If we must accept some emissions for a bit longer to save our industries or to maintain social cohesion, so be it.”

Mitsotakis’ comments reflect Greek shipowners’ views, which in turn reflect their business interests. But they are also right; politics exist, for better or worse. We must work within the bounds of what is possible.

Shipowners who have always viewed decarbonisation as fanciful will get to say they told you so.

Green tech firms are putting on a brave face, but some of them will doubtless be worried about their futures.

But as with the broader energy transition, popping hype bubbles may have its upsides.

Just look to the huge growth in solar, batteries and EVs despite the Trumpian greenlash. The direction is greener over time; it is just slower and quieter.

Instead of yet more “which future fuel will it be?”, companies could work on aligning different links in their maritime supply chain toward slower steaming and just-in-time arrival, among other goals.

Standards for data gathering and reporting across the industry would help a whole range of areas, from misdeclared cargo to route planning.

Tech firms that manage to cut fuel use meaningfully will find buyers for their widgets without IMO regulation. The booze and buzzwords will still flow at Posidonia next year. The work will go on.

Like with anything in shipping, it’s the long-term view that matters most.

Declan Bush
Senior reporter, Lloyd’s List

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