The cost of complying with environmental regulations looks painful for most, but what is the cost for shipowners that do not want to comply?
Norwegian bank Nordea has conducted a study in to the cost factors that look set to hit shipowners through regulations coming in to play.
“What we are seeing now in questions for sustainability in climate change is also coming in to the financial side,” comments Thina Saltvedt, senior adviser on sustainable finance at the Nordic bank Nordea.
In today’s market it is not just about finance, as more companies are now starting to look more towards climate change and as Saltvedt highlights the cost of not taking care of our society, which is now starting to impact companies.
“The consumption patterns that we have today have not been priced at all”, she says “that is about to change as we see the climate changing.”
It has already been noted that the regulations are already steering the technology market, which are looking to come up with new and creative ways to help shipowners combat the emissions.
But it is important for the shipping industry to react quickly to these changes, as Nordea expects it to be a key player in the future of transport.
The main issue being that if the industry is too slow to react then it is likely to see a large capital change, which Saltvedt notes “the finance market does not like.”
Shipping hasn’t been the quickest to react to the challenges of climate change and instead has played a waiting game to see how the market reacts to the effects of the changes being bought about by legislation, which could cause it more of a problem, if it does not react quick enough.
Urging the industry forward, Saltvedt warns that: “It is important to move today for transparency. If we don’t make a move quick enough then we could end up with stranded assets.”
She also notes that capital is important as its about taking us from where we are today to meeting the 17 goals of the Tokyo Paris Agreement for the future.
Positive steps have already been taken last year with the CO2 limits being put in place for 2050, which Saltvedt opines as a good step forward for shipping to show that it has goals for the future.
Nordea looks to help its customers in the future to meet with the challenges of being more climate friendly through looking to invest in more climate-friendly projects, as this is the trend that it is now seeing emerge in the financial market.