The shipping sector could become cleaner than the aviation industry following the approval by the UN shipping agency of a new energy efficiency design index and other measures aimed at improving ships' environmental performance, according to an NGO.
The new rules, adopted by the International Maritime Organisation earlier this month, could also save the shipping industry US$5 billion in fuel costs and cut carbon dioxide emissions by 20 million tonnes a year on new ships by 2020, said Peter Boyd, chief operating officer of the Carbon War Room, an NGO set up by a group including British billionaire Richard Branson.
Boyd said the IMO's new rules would lead to fuel savings of US$50 billion a year and an annual reduction in carbon dioxide emissions of more than 220 million tonnes if the standards were applied to the existing fleet of 60,000 ships.
Boyd was commenting after the IMO approved regulations to implement efficiency ratings for ships over 400 gross tonnes, which are expected to enter into force on January 1, 2013. The measure, which will apply to ships ordered after a specific date, was approved overwhelmingly by 48 countries that voted at the IMO's marine environment protection committee about 10 days ago.
China was one of only five countries that voted against the measure. Consequently, while mainland shipyards are likely to build more energy-efficient ships for foreign owners, there will be no pressure on those shipyards to comply when building ships to be registered in China for mainland owners such as China Ocean Shipping (Group).
Clauses in the pact allow countries to delay implementation for up to four to six years after the commencement date of the rules. As a result, there is some uncertainty over how quickly the energy-efficiency design index and the associated energy efficiency management plan will be implemented.
Under the IMO regulations shipowners will have to meet the new efficiency ratings for each type of vessel they order. Dry cargo bulk carriers will have a different rating than tankers or container ships.
The IMO also leaves the choice of technologies used in a specific ship design to the maritime industry. This could include changes to the hull design or propulsion system which are already being incorporated by some shipowners, including Hong Kong operators.
Asked if shipping companies would seek early compliance with the ratings or take advantage of the potential delay given to some countries, Arthur Bowring, managing director of the Hong Kong Shipowners' Association, said: 'It really depends on the cost of compliance. Shipbuilders might try to ask for a premium [on the cost of a new ship] to implement early because it is not yet required by regulation.'
But Bowring said the industry was 'suffering an overcapacity of shipbuilding and so the cost might well be absorbed, at least partially'.
'Whether flag states will take advantage of the four-year delay could well be a political decision to object to the process rather than anything else,' Bowring said. He also thought it was 'actually in the owner's interest to have the energy efficiency design index for his new buildings, in that it should make the ship more attractive as a sale candidate later on.'
Tim Huxley, chief executive of Wah Kwong Maritime Holdings, which operates a fleet of tankers and dry cargo ships, said it was too soon to assess the impact of the regulations on its operations, 'although it will obviously have an impact on any new ships we might build in the future. The interesting part is going to be how quickly the shipbuilding and engine manufacturers respond.'
One Hong Kong shipowner said vessels were designed to have a lifespan of 25 to 27 years, but the impact of the IMO regulations meant that some ships being delivered now could already be obsolete.
Jan Rindbo, chief operating officer of Pacific Basin Shipping, said: 'We are supportive of the creation of sensible but effective industry-wide measures to reduce emissions, and for such measures to be the jurisdiction of the IMO.'