IMO starts carbon tax to boost greener shipping.
The International Maritime Organisation (IMO) is working on introducing carbon regulation for the shipping industry and efforts are on to introduce carbon tax to encourage energy-efficient ships, a senior industry official has said. Jacob Sterling, General Manager for Sustainability at Maersk Line, the world's biggest freight shipping firm, yesterday said that the company is working with the World Shipping Council and others to promote sustainability within the sector.
Speaking to Emirates Business over telephone from Denmark, Sterling said: "We are working with the council to have a CO2 regulation for shipping. It should be done in a way to encourage efficient shipping. If we have an efficient ship then we don't have to pay as much as those with inefficient ships. This is the major industry-wise initiative that is going on right now."
"If there is regulation from IMO, which I hope there will be, then it will probably be in the way that the more fuel you use the more CO2 tax you will have to pay. In order to be competitive in the global market, the more energy efficient your ship is, the better it will be. This includes the use of alternative fuels and it will be true for shipowners in the Middle East as well," he said.
Maersk has set various targets to lower carbon emissions and plans to decrease emissions by 20 per cent by 2017. Five Maersk business units are already carrying out tests on a large container vessel with the aim of cutting CO2 emissions and diversifying fuel supply.
"I am happy to say that we, being the industry leaders with over 500 ships, are taking the lead. This puts the group at the forefront of the industry. To the best of my knowledge, we are the first to test biodiesel in a large container vessel. We want to be ready when sustainable biofuels become available in large volumes," said Sterling.
The company is also a member of Clean Cargo Working Group ? a group of container shipping companies and some of the big customers of container shipping that have come together to discuss how to set standards for efficiency and CO2 reductions within the industry.
"As a large shipping company we carry cargo from most of the big companies such as Walmart, Cisco, Nike and IBM that are increasingly becoming interested in reducing their carbon footprint and want to ensure that their products are transported in a non-polluting way," said Sterling.
"To achieve our 2017 target, we are taking a lot of initiatives. We are studying all aspects about how to operate the 500 odd ships that are part of our fleet in an effecient way. How can we retrofit these ships to be more efficient ? especially because we are going to sail with these ships for many years to come. It includes modifying the machine room, the propeller and the hull," he said.
The company, for the past two years, has reduced the speed of its fleet considerably. "Sometimes down to 10 per cent of the maximum engine load of the ship. That is reducing the speed by 50 per cent. It was something that Maersk as a company invented. Previously it was thought as conventional wisdom that as a big ship you cannot go very slow and that it would damage the engine over a period of time. We have proved that wrong," said Sterling.
As part of the pilot project, Maersk has retrofitted one of its ships, Maersk Kal Mar, to test biofuel.
"Firstly we are testing bio-diesel ? the first generation biofuel. This is because we know that it is already in the fuel mix and we need to know how the ship engine is going to react to that. This is the primary test," he said.
"We have installed extra tanks and shipping equipment. Then we run them with different fuel mixes so that we can test how the engines react. We are being approached by a lot of producers of biofuel, requesting us if we could test it in our engines. We are going to build the facilities to actually make it possible to conduct those tests. This will help producers of biofuels to know at an early stage whether their products can be used in a ship engine. We are assisting the research as much as we can in that regard."
According to Sterling, the company is spending a lot of man hours and working with many partners on the greeing process. The partners in the biodiesel project, apart from other divisions of Maersk, are Lloyd's Register ? Strategic Research Group, and a consortium of Dutch subcontractors. The project is supported by the Dutch government.
"We also want to be prepared and want our ships to be ready for biofuels when they become available in greater quantities. Today, it is not really an option as it is of a low quality and the price is too high. But we want to be prepared. In future, it would be the second-generation biofuels and there would be larger quantity available and would be a lot more sustainable," he said.
Sterling said it is very important for companies to invest in biofuels in order to reduce their operating cost.
AP Moller-Maersk, the 105-year-old Danish shipping group, revealed last week that it suffered its first ever-annual loss last year. It reported a $1.02 billion (Dh3.74bn) net loss for 2009.