The new recommendations of IMO to reduce emissions have brought new vessel orders to a halt. Because, the current technologies do not meet future emission rules. Cihan Ergenç, one of the managers of the Shipowners’ Association, warned, “The vessel in which you will invest 30 million dollars can go to scrap after 6 years. Do not have a new vessel built.”
The new recommendations of the International Maritime Organization (IMO) on the reduction of greenhouse gas emissions caused by the international maritime transportation sector resulted in a sharp fall in new vessel orders. When giant shipping companies ordered 10-20 vessels in the past, nowadays this number has decreased to 1-2 vessels. The number of active shipyards building new vessels in China, which was one thousand five hundred 10 years ago, has decreased to the 90s.
International Maritime Organization – IMO, which is affiliated to the United Nations (UN), aims to increase productivity by at least 40 percent until 2030 compared to 2008, and 70 percent until 2050, within the scope of precautions to reduce greenhouse gas emissions caused by the maritime transportation sector. The longer-term goal is to reduce greenhouse gas emissions caused by maritime transport to zero in the current century. The rate of carbon dioxide emission caused by maritime transportation, where 85 percent of world trade is made, is around 1.7 percent. In this context, IMO lastly approved the draft amendments in MARPOL VI in November 2020 to bring the new technical efficiency standard “Energy Efficiency Existing Ship Index-EEXI” for vessels. The new implementation is expected to take effect in the fourth quarter of 2022, at the latest on January 1, 2023. The final decision on this issue will be made in June 2021 and a certificate will be issued according to the results of the index and this will be required in the first survey of the vessel. The index measures the CO2 emissions caused by a vessel carrying a 1-tonne cargo over 1 nautical mile. The Actual EEXI value onboard must be less than or equal to the value calculated according to the type and size. Otherwise, these vessels will face the risk of not being able to trade.
All these developments brought new fuel types such as ammonia, Biohydrogen, and methanol to the agenda. Many countries are conducting R&D studies in this regard. In particular, countries such as Japan, Korea, and Denmark have accelerated their efforts to increase the efficiency of the fleet. The Turkish Shipowners’ Association has been carrying out important studies to raise awareness on this issue. On the one hand, it organizes webinars with titles such as “Forget What You Know” with the participation of experts, on the other hand, it calls on relevant CSOs, academics, and public officials to work together. Cihan Ergenç, Deputy Chairman of the Shipowners Association, has made important statements to the WORLD on the issue.
“In next 5 years, we will forget about the current maritime”
Emphasizing that a brand-new era will begin in maritime transport, Cihan Ergenç said, “Only 5 years later, we will forget the existing maritime, vessels, and machines. We will get to a very different point gradually in 10 years in line with the recommendations made. Therefore, we must determine the decisions and investment plans accordingly. We must get through this process with minimum damage by making the right decisions at the right time.”
“If you order a vessel now, you will receive it in 2024”
Emphasizing that ordering a new vessel will not be a logical investment in this period, Ergenç said, “If you want to order a vessel now, the contract process, etc. will take 6 months and the building will take at least two years. You will invest $30 million for the vessel, but new rules will come into effect in 2025, on the other hand, the “border carbon tax application” will also start on this date. By 2030, that vessel is likely to be a scrap. You cannot get the money you paid for the vessel in 6 months,” he said.
This is the reason why the world’s largest shipowners minimize their vessel orders. When giants such as Maersk and Evergreen ordered 10-20 vessels in the past, nowadays this number can be counted on the fingers of one hand. According to the information reported by Ergenç, the number of shipyards building new vessels in China, which was one thousand five hundred 10 years ago, has now decreased to the 90s.
However, according to Ergenç, if IMO says, “We suspended these decisions, the vessels ordered now are the exception,” maybe a thousand vessels will be ordered next week because the shipowners want to see the way ahead.