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Stop trying to delay environmental rules says leading shipowner

Shipowners around the world need to stop trying to delay environmental regulation and become more engaged with the sustainable developments in society according to Niels Smedegaard, Chief Executive of Danish shipowner DFDS.

Smedegaard was on a panel of experts at a seminar on the future of container shipping at the Copenhagen Business School. He said many owners seem to think that the industry is special and that they should be left alone, that regulators should refrain from imposing tough rules on an industry that has been operating for thousands of years. There is he said also a reluctance for shipping to engage with other parts of the supply chain.

Smedegaard, who is also chairman of Danish Shipping and board member of the European Community Shipowners Association, was also critical of the confusing messages coming from the industry ahead of the 2020 sulphur cap in a week that IMO’s marine environment protection committee is meeting to hammer down some final details including the carriage ban of non-compliant fuel.

“This is a huge step for a large part of the industry. Some are trying to ban the use of scrubbers and some try to delay this.”

DFDS was one of the early investors into scrubbers, ordering a number to be installed into its fleet of vessels that operates largely in the North European emission control area where the sulpher in fuel limit is already 0.1%

In a short speech that focused heavily on the reluctance of parts of the industry to proactively and positively engage with the environmental debates in society, Smedegaard also focused on what he  saw as attempts to slow down the decarbonisation of the shipping industry.

The IMO is currently working on aspects of plans to reduce the CO2 footprint of the industry. It already has a roadmap that will see the industry find a way to curb its CO2 emissions by 50% by 2050.

Critically, Smedegaard also said he saw a growing north-south divide in Europe over the environmental goals of the industry and said he saw the growing need for the IMO or European Union to create a strong global research and development fund to help the industry as a whole proactively tackle its environmental challenges.

“Kicking the can down the road will just make things worse. The politicians will not forget us,” he said. “No other industry has set this standard and we are still reluctant. We try to push this into the future as far as we can. I see strong segments of the industry trying to do this and this will have a negative impact.”,

He pointed to the decarbonisation developments other transport industries that will give them a stronger footing and lead to more shipowners going bankrupt.

His comments about shipping being more proactive in the face of societal change was echoed by Matt Stone, partner at consultants McKinsey and Company.

Stone pointed to the growing influence of investors such as pension funds and finance firms such as Black Rock who are making investment decisions based on their environmental social governance (ESG) criteria.

He pointed to how some funds are pulling out of the oil and gas sector and said there is a potential that they will see shipping as too dirty to touch.

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