Maritime Cyprus 2023 shipping in action: an agenda for change

Day one: optimists and pragmatists… or pessimists?

You will be unsurprised to hear that decarbonisation dominated this year’s Maritime Cyprus conference in Limassol last week. It’s an unavoidable, inescapable reality that the industry continues to grapple with. And – also unsurprisingly – it’s a reality that divides opinions.

Shipping may be a fragmented market. But at Maritime Cyprus, it seemed that shipowners fell broadly into two camps; there are optimists and there are pessimists (largely self-professed I hasten to add!).

Whether they were glass half full or half empty, the owners seemed fairly unanimous in feeling rather taken for granted by the EU. Andreas Hadjiyiannis, President, Cyprus Union of Shipowners lamented that the EU is “taking shipping for granted and not treating us with care.” In agreement, Suzanna Laskaridis, Director, Laskaridis Shipping Company suggested that if shipowners simultaneously went on strike, perhaps the world would wake up to its importance!

Part of this is driven by the many incoming regional regulations that EU operators are facing. Dr Gaby Bornheim, President, German Shipowners’ Association said that the EU ETS is creating a lot of headaches. “We need a clear, international framework to tell us how to proceed.” This was echoed by Semiramis Paliou, CEO, Diana Shipping. And Emanuele Grimaldi, President and Managing Director of the International Chamber of Shipping (ICS) agreed with them, saying:“If others follow this regional approach it will be a nightmare. We need global regulations. We are responsible but need a global procedure that works.”

While the headlines are filled with orders of LNG, methanol and ammonia-fuelled vessels, Suzanna Laskaridis, Director, Laskaridis Shipping Company said that she perhaps represents the silent majority with no view on future fuels. Indeed, she, like many other Greek and Cypriot owners, are ordering conventional vessels for now. “We are in wait and see mode” she explained. A position corroborated by Thanassis Martinos, Managing Director, Eastern Mediterranean Maritime.

Ben Nolan, Managing Director, Maritime, Rail & Energy Infrastructure, Stifel told us that, “The reality is that traditional propulsion types will be in operation for a long time.”

In general, these owners are ordering the best ships that they can operate now, but rather than pay a premium for dual-fuel ships, owners are waiting to see how the market develops, by ordering cheaper ships that can be adapted once a clear industry direction emerges.

But not all owners are taking this approach. Semiramis Paliou, CEO, Diana Shipping, for example, talked about their investment in dual-fuel methanol vessels. And Jan Dieleman, President, Cargill Ocean Transportation, Cargill International SA stressed the importance of showing demand signals for alternative fuels. “We don’t yet know if we will find the fuel but we have to send a demand signal. Don’t just wait for others to take the lead. Sometimes it’s tiring being a first mover, but it also gives us lots of opportunities.”

Whatever the type of fuel, reducing fuel consumption is a priority for all shipowners. “Our biggest bill is bunkers, so we have a vested interest in reducing fuel consumption,” George Procopiou, Chairman, Dynacom Tankers Management reminded us.

In terms of what we can and should be doing right now, efficiency is the name of the game, and this is one point everyone unanimously agreed with – optimists and pessimists alike! This can happen today and has immediate, positive effects for both the environment and – importantly - the bottom line.

Manuela Tomassini, Head of Sustainability and Technical Assistance, EMSA noted that proper analysis of each business will make all the difference in choosing the right package of solutions. There is no one size fits all solution.

George Procopiou, Chairman, Dynacom Tankers Management remarked that politicians are promising the desirable and shipowners are doing the doable. “We are ordering new vessels that are 35-40% more efficient. This is what’s practical. The rest is just bullshit!” While Mr Procopiou made attending journalist’s lives easy by writing the headlines for them, not everyone agrees with him.

Nikolaus Schües, President, BIMCO took a more optimistic line. While he noted that the euphoric atmosphere which followed the MEPC 80 declaration seemed to have died by London International Shipping Week, he believes that, over time, “We will do it”.

He said that although the targets are ambitious, they are attainable through three key methods:

• Operational measures – the low hanging fruit that are easy to implement, for example Blue Visby

• Support – money raised through any EU measures to support innovation

• Technologies – for example carbon capture and storage

Dr Gaby Bornheim, President, German Shipowners’ Association agreed, “If the money from the EU ETS comes back into the industry, that will help a lot.” Emanuele Grimaldi, President and Managing Director of the International Chamber of Shipping (ICS) suggested it requires something like a fund and reward system. “We need to support the early movers to encourage the uptake of alternative fuels and bridge the price gap.” Semiramis Paliou, CEO, Diana Shipping also stressed the need for first movers to be incentivised.

From a communications standpoint, controversy is good. Disagreements are to be welcomed. As this is what sparks discussion and creates dialogue. Everyone learns from each other – as long as they actually listen! We often forget that listening is an essential part of effective communications. Perhaps the regulators do need to listen more closely to the owners and operators? They are, after all, only providing the service to global trade that the world is demanding. If politicians are genuine in their commitment to decarbonise then the decisions they make must be based on much more than currying favour and winning the public vote.

We need to see a revolution in shipping. But anyone that thinks this can, or will, happen immediately will be sorely disappointed. Indeed, “The idea that this transition can happen quickly is farcical,” said Ben Nolan, Managing Director, Maritime, Rail & Energy Infrastructure, Stifel.

Wherever you sit on the optimist / pessimist scale, it’s called the energy transition for a reason. And not everyone will move at the same pace, at the same time. That does not, however, equate to an excuse for inaction. Let’s be like Sebastian Landerretche, Head, Freight Platform, Louis Dreyfus Company; “Pragmatically optimistic”! Everyone has the ability, and responsibility to act now – in whatever form that takes.