How recent climate concerns might impact ocean freight

In the last two decades, there has been a growing concern regarding climate changes and the role that the human factor plays in it. We have seen, faster than ever, that our ever-growing industry and globalization has immense consequences regarding our planet. One of the newest changes in this discourse is the IMO 2020, or the International Convention for the Prevention of Pollution from Ships (MARPOL), which started on January 1st, 2020, reduced the allowed sulphur levels in marine fuel oil. The industry is aware of how the recent climate concerns might impact ocean freight, but on the other hand, it is conscious that it plays an important role in building a more sustainable environment.

EEDI or Energy Efficiency Design Index

IMO approved the EEDI in July of 2011 and it was the first globally binding standard aimed at a design to reduce climate change from shipping. It was introduced and enforced on all new ships that entered the market in 2013. The result was that new ships need to be more energy-efficient.

Because of the EEDI new ships need to be more energy-efficient.

The EEDI consists of three phases, phase 1 was that an overall 10% betterment in performance in vessel energy applied to all new ships built between 2015-2019. Phase 2 focuses on ships built between 2020 and 2024 and binds them to improve energy efficiency from 15 to 20%. The third phase will focus on ships built after 2025 and will bind them to 30% greater efficiency.

The Paris Agreement

Until the Paris agreement, everything depended on the resolutions from the Kyoto Protocol. However, it tasked only developed countries to work through IMO to cut emissions. When the Paris agreement was finalised in 2015, specific requirements were set for all parties to address all emissions. The goal was to set economy-wide emission reduction to at least 50% by 2050. Another step was to pursue efforts for full decarbonisation.

The next step: IMO 2020

IMO 2020 is the most important topics for the freight industry and ship-owners. There are some possible problems that must be fixed one way or another, such as the uncertainty for risks of the bunker, the possible breaking down of machines and the use of scrubbers.

Climate concerns might impact ocean freight
IMO 2020 discussed how the climate concerns might impact ocean freight.

On the other hand, companies, such as the National Shipping Company of Saudi Arabia, have a vast range of options that are available to achieve compliance with the new sulphur cap.

Alternative fuels: cost and benefits

Switching to alternative fuels that are naturally low in sulphur is one of the most direct ways to follow the rules brought on by IMO 2020. Some examples of this kind of fuel are liquefied natural gas, biofuel, and marine distillate. Such fuels are being used in a large number of new ships and freighters. Already existing ships are expected to use ‘blended’ low sulphur fuels.

Scrubbers, the alternative option

Another option, proposed as an alternative to switching to alternative fuels, is to fit scrubbers to ships, including ships used for freight forwarding. A scrubber describes a gas cleaning system that would remove sulphur oxides from the engine of the ship and boiler exhaust gases. Scrubbers come in two types, an open-loop and a closed-loop. The main difference between the two is that open-loop scrubbers let the wash water back to the sea. The closed-loop scrubbers, on the other hand, must discharge the wash water onshore.

Speed reductions or slow steaming

Emissions, such as carbon dioxide emissions, are proportional to fuel consumption. Fuel consumption becomes bigger at greater speeds. Additionally, if the ships slow down, even by a small amount, the results can be significant fuel savings and emissions reductions. The number that up for discussion in regard to this matter was slowing down ships by 10%. This amount of reduction could minimize the gas emissions by 23%.

The implications of speed reductions and their impact on ocean freight

Speed reductions would lead to the slowing down of the industry. We can see this through recent events (such as the COVID-19 pandemic and the Evergreen incident). This would mean that the ocean freight to Saudi Arabia and everywhere else around the globe would take a greater amount of time. However, if this means that greenhouse gas emissions would significantly decline.  Consequentially, the industry needs to resolve this problem ASAP, as the benefits greatly outweigh the costs.

Why should shipping companies involve themselves in battling climate change?

The most pragmatic way of addressing this issue is through the economic perspective. Climate change is a great threat to the industry itself.  The shipping industry accounts for 80% of the world’s trade total volume. There are a lot of adverse effects of climate change on maritime transport. In the text below, we will discuss some of the most crucial ones.

Re-routing and climate concerns might impact ocean freight

Ship channels face a great consequence from the rise of sea levels, coastal erosion and changing sedimentation patterns. All of these things are happening because of the melting of the ice caps around the North Pole. Routes that already exist have become no longer safe or easy to pass, and new routes need to be established.

Sea levels rising
Ship channels are facing a great consequence from the rise of sea levels, coastal erosion and changing sedimentation patterns.

This can pose a serious problem as it impacts productivity both for the shipping line and the customer. Shipping companies have to invest a lot of time and finance in planning routes. For the customer, this means that the transit time will only go up, and their deliveries will be late. Fortunately for the customers, reliable logistics and shipping companies have this in mind and are doing everything to fix this problem.

Another problem that comes hand in hand with the rising sea level is the increased risk of port infrastructure damage.  The industry needs to do something about the rising sea levels or the ports face the fear of submersion and destruction.

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