- The cost of ocean freight will probably remain high in 2022 as investment and regulators scramble to simplify the export process, sources say.
The shipping industry, which is primarily about 9% of the world's natural gas consumption and accounts for almost 3% of the world's CO2 emissions, is under growing pressure from environmentalists to deliver more concrete actions, including a carbon levy.
The International Maritime Organization (IMO), the special shipping agency of the U.S., said that it has made progress in short-term reductions in greenhouse gas emissions.
But environmentalists not seeing it as fast enough, while among the 175 members of the IMO, such a timeline is not seen as fast enough.
"At the MEPC meeting in June next year, there will be a lot of pressure and heat from the regulators to ensure they come prepared to negotiate a solution rather than kicking the can down the road due to misalignment or negotiation tactics. "It's not really acceptable," said Christian Michael Ingerslev, chief executive of Maersk Tankers.
Last month, nations, notably the United States on the climate summit COP26, pushed the IMO to set a zero-emission target by 2050.
The goal of that project is to reduce global GHG emissions from ships by 50 percent to 2050.
"Because of the IMO, the negotiations process in 2022 will likely be very slow and onusable," said Faig Abbasov, the green group Transport & Environment.
The problem is in the belief that a U.S. organisation with 175 members can take tough decisions to decarbonize an entire economy sector."
The IMO said a tangible progress was made in 2021, and included new regulations to improve the energy efficiency of the world fleet, putting together a revised GHG strategy, which will be finalized in 2023, for a "shallow" sandfight.
Those of us who have a willingness to act, processes may come faster.
A proposal from the IMO titled Recognizing the best technological solutions to the target is still under discussion. After further talks kicked off, we aimed at next years goal.
The impact will be a huge factor in preparing for the challenge.
Although the country is a small carbon emitter, climate change has "directly impacted us a lot", has Ali Haider Zaidi, the minister for maritime affairs at the federal level.
In regard to the need for a new infrastructure, the developed countries can't afford to spend on the type of infrastructure required for the development of their own economies, and therefore, their countries must support the process at the IMO, he told Reuters.
A new hurdle is to finance the next phase of the project: one ship will need two thousand dollars to reach zero-metal goals by 2050, with around 500 million dollars needed by 2030, according to analysts.
"Certainly the European banks must meet to least and not far away from the United States," said Tony Foster, chief executive of Marine Capital.
"When it comes to new assets, it will become increasingly difficult to fund something that doesn't qualify and the same will likely happen with existing assets."
Darren Maupin, founder of leading fund manager Pilgrim Global, said companies in the shipping sector were trying to find a solution for more ESG pressure.
"Capital is afraid, how is it going to invest in a 25-year asset, when you don't know what the IMO will do in five years," said Maupin.
"The industry can build ships easily and resources to do so can be limited. It's possible that a simple supply-demand means rates will be higher and the industry will have to generate more capital to fund itself."
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