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Shipping industry needs to be greener to address financial "gaping hole”

Green transport news - by Saran Mishra
28th June 2013
The financial crisis and the retreat of the banks means the shipping industry must look to a new set of investors that are demanding greater transparency and environmental performance before they will invest, according to the global head of transport at Dutch bank ABN-Amro.
"Banks are retreating from the business so that leaves a very big gaping hole in the financial structure," ABN-Amro’s Gust Biesbroek said "The way ships are being financed today: that hole is being filled rapidly by capital markets, private equity and other private investors […] and the demands that this new money puts on all the shipping companies in which they invest are very different from the old fashioned bank; there is a lot more emphasis on transparency, longer term transparency as well and of course environmental performance."

Biesbroek made his remarks yesterday at an event hosted by the Sustainable Shipping Initiative, a cross-industry coalition of businesses working to achieve a sustainable future for the shipping industry. He was joined by representatives from global marine equipment manufacturer, Wartsila Corporation, and shipping giant Maersk Line, which today launches the first of its Triple E ships, its most environment-friendly family of ships to date.

Over 80 per cent of world trade is carried by the global shipping industry and that means emissions from shipping now total over a billion tonnes a year.

Biesbroek suggested it was time the shipping industry dragged itself into the 21st century and start thinking long-term. 

"The world fleet has become a lot bigger in recent years […] and all those new ships are yesterdays ships because they have been built to come to the market as soon as possible […] rather than being the most modern ship […] and that is, as far as I am concerned, a huge missed opportunity," he said. 

But he said the industry also had an opportunity to go for the "low hanging fruit" and make these 'old ships’ more sustainable by retrofitting them so they cut their fuel bills.

Describing the industry as "very traditional", Signe Bruun Jensen, global advisor on environment and CSR at Maersk Line, said sustainability measures that are potentially environmentally friendly are also financially beneficial. 

Maersk Triple E class
The Maersk Triple E class will be a family of 20 large, fuel-efficient container ships, designed as a successor to the Maersk E-class and costing US$1.9 billion to build. The name 'Triple E; is derived from the class’s three design principles: 'Economy of scale, Energy efficient and Environmentally improved’. The vessels are 400 metres long, 59 metres wide and 73 metres high and will travel the Asia-Europe trade route. They cover 184 kilometres using just one kilowatt hour of energy per ton of cargo – the same amount of energy per ton of cargo it would take a jumbo jet to travel half a kilometre. They will cut carbon dioxide emissions by more than 50 per cent for every container they move, compared to the industry average the same trade route.

In addition, Jensen said Maersk was launching an initiative that retrofits their chartered vessels and incentivises behavioural performance from ship captains geared towards greener sustainability practices to meet these measures.

Maersk has reached its carbon emission goal of reducing emissions by 20 per cent eight years before its set target. For the end of the decade, the new plan is reach 40 per cent less carbon emissions.

Cross-industry collaboration
"Technology is one thing and we are very proud of that but I think early on we came to the realisation that there is only so much you can do as one company," Jensen said. "We are working across the entire value chain: with some of our customers like Unilever or Cargill but also working with suppliers […] finance providers to see if we can really develop some solutions to the bigger problems we can’t address alone."

Tomas Aminoff, director Technology Strategy and Ship Power of Wartsila agreed with Jensen on the entire industry coming together to combat carbon emissions and fight for more sustainable shipping. 

Aminoff affectionately quoted a technical director he met early in his career who told him, "we can put a man on the moon but we can’t measure the speed of water".

SSI is a coalition of ship owners, charterers, builders and engineers, insurance and logistics firms that teamed up with Forum for the Future and WWF to make the shipping industry resilient, socially and environmentally responsible, and profitable by 2040.

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Shipping industry needs to be greener to address financial "gaping hole”
Maersk's Tripe E ship covers 184 km using just one kWh of energy per ton of cargo
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