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IMO’s greenhouse gas plan is already outdated

If shipping wants a say on its future — and support from lawmakers when it requires their help — it’s going to have to prove its progressive environmental credentials

The English romantic poet Percy Bysshe Shelley once contended: ‘Poets are the unacknowledged legislators of the world.’ In shipping’s case, that role falls to charterers and financiers, and when the likes of Trafigura and BP demand decarbonisation, the industry better step to it

IT’S not only Greta Thunberg and Extinction Rebellion who want rapid action to stop climate change, and 2020 is showing that in ways unimaginable when the industry was drawing up its game plan at London’s Albert Embankment little more than two years ago.

Trafigura, the giant commodity trader, is calling on the International Maritime Organization to impose a $300 per tonne carbon levy on shipping fuels, even though it would be one of the big names on the hook for the costs.

BP, again nobody’s idea of an anti-capitalist beatnik hippy wingnut outfit, thinks a properly designed scheme on these lines would mark a major contribution to slashing pollution.

Meanwhile, other major charterers have agreed to disclose annual shipping greenhouse gas emissions, and assess alignment with IMO decarbonisation targets.

That would mean not only greater transparency, but make emissions performance a key aspect in chartering negotiations, further incentivising reduction.

But the dominant sentiment in shipping is still deference to the IMO’s half-decarbonisation by 2050 strategy, which increasingly resembles some kind of lowest common denominator.

It is in the nature of United Nations agencies to seek consensus, of course, but that consensus is crumbling fast. Shipowners have been put on notice of what is to come, and what will increasingly be expected of them.

The great English romantic poet Percy Bysshe Shelley once contended: ‘Poets are the unacknowledged legislators of the world.’

Kirstin Holth, the former DNB ship finance chief, recently updated that axiom for shipping in the 21st century.

"In our case, charterers and financiers rather than the regulators that ultimately make the pace — and, for many of them, the IMO blueprint comes over as too little, too late,” she said.

“I will not rank one ahead of the other, but you will, over time, not get access to the best resources, being human or capital, unless you have a sustainable business model, financially and environmentally, socially and corporate governance wise.”

To give IMO its due, its 2018 carbon reduction strategy has been an important catalyst, and that historic agreement would likely have been impossible without industry support.

But if shipping wants a say on its future — and support from lawmakers when it requires their help — it’s going to have to prove its progressive environmental credentials.

Ultimately, entirely decarbonised supply chains are inevitable, and the industry is going to have to be part of them.

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