Far more shipping professionals think environmental regulations will be positive for their businesses than expect they will be negative, according to a TradeWinds Knowledge survey.
With the IMO pushing for lower sulphur limits in marine fuel from 2020 and for the global decarbonisation of shipping within this century, many high-profile executives have expressed worries over potentially high compliance costs in meeting the regulatory hurdles.
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However, in the survey that received more than 600 responses from shipowners, charterers, brokers and other segments, 42.2% expect a positive impact from green shipping rules on their bottom lines, while 20.6% think the regulations will have a negative effect.
Among others, 26.3% hold a neutral view and the rest say they do not know.
“This is perhaps even more surprising given that compliance costs are often highlighted as one of the top worries in industry surveys,” according to the TradeWinds Knowledge report on IMO 2020 and low-carbon shipping, which publishes the full survey results.
“While the shipping professionals who participated are concerned over the money required to become greener, they believe that, on a net basis, those investments can pay off.”
The respondents who identified themselves as shipbrokers are most optimistic about greener shipping, with 51.5% of them feeling the impact will be positive on their businesses against 11.8% who are negative.
“New rules may lead to replacement newbuilding demand for eco tonnage and stricter charter requirements, bringing new business opportunities to brokers,” TradeWinds Knowledge said.
In contrast, charterers are most pessimistic over the business impact of environmental regulations, possibly due to expected increases in freight rates, according to TradeWinds Knowledge. About 35.7% of them perceive negative impact, compared with 26.8% who feel positive.
As for shipowners, 32% of them believe the new rules will be positive, 27.2% are neutral while 21.1% take a negative view. Nearly 34% of the shipmanagers in the survey are positive, compared with 25% who are negative. About 32% of ship financiers see positive impact versus 24% negative.
Superiority complex
The survey also suggested most shipping professionals think they may be better prepared for the imminent IMO 2020 regulations than others.
More than 80% of the respondents say they are at least adequately prepared for the new bunker rules, compared with 9.9% who feel little prepared and 2.8% unprepared (see pie chart on right).
However, 45.7% believe the industry — in general — is little prepared or unprepared (see pie chart on left).
When asked to select at least one preferred option in meeting the IMO 2020 rules, more than half of the respondents favour the new fuel products with 0.5% sulphur limits, often referred to as low-sulphur fuel oil. Marine gasoil comes a close second, followed by LNG and scrubbers.
Policy preference
The IMO is aiming to finalise short-term measures to reduce greenhouse gas (GHG) emissions from international shipping in 2020. When allowed to choose for more than one policy, 50.6% of the respondents prefer policymakers to reduce the costs of low-emission fuels via subsidies, supporting and stimulating research and development.
Some 47.7% suggest that stipulation of emission intensity for newbuildings or existing vessels, or both, would help curb emissions.
Nearly 45% think decarbonisation can be induced by policies that increase the cost of fossil fuels, such as carbon pricing mechanisms.
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The survey on IMO 2020 and decarbonisation was conducted between 15 July and 6 August 2019 and we received 603 responses.
Of them, 44.1% described their companies as shipowners, 24% as shipmanagers, 20.4% as shipbrokers, 16.8% as charterers and 15% as financiers. There were also some describing themselves as working for consultancies, bunker players and insurance firms, among others.
The questionnaire was created via an electronic form provided by SurveyMonkey. It consisted of 20 questions — one was on survey data compliance, and the rest were multiple-choice questions on the respondent’s attitudes and approaches towards environmental regulations, and profile questions. Respondents answered anonymously and were allowed to skip the questions they did not want to answer.
Special thanks to Dr Nishatabbas Rehmatulla, senior research associate at the University College London Energy Institute, who provided advice on the design of the survey.
