SSG No 4 - Shipgaz

Political expediency
will override dithering shipping
Political expediency has totally
overtaken international shipping
organisations’ efforts to
reduce ship emissions. In fact, if
the International Chamber of
Shipping (ICS), representing national ship
owners’ associations, and Baltic and International
Maritime Council (BIMCO) do
not stop dithering they could risk being left
out of further proceedings.
ICS has, typically, asked for more time
to find a consensus among member organisations
instead of taking a lead. And they
are talking of sulphur limits to allow alternative
compliance measures and looking
for a net environmental benefit. It is much
to late for this sort of approach and it may
result in shipping getting a worse deal
than if they had taken a more proactive
and sensible approach. With the recent
United Nation report on global warming
and climate changes, politicians will want
to see a different approach.
Sometimes it is worth a reminder that the
IMO agreed MARPOL Annex VI (a separate
treaty), dealing with air emissions from
ships, in 1997. On May 18, 2004, MAR-
POL Annex VI was ratified by the 15th
nation, bringing the total percentage of the
world’s merchant shipping tonnage to
54.57. Annex VI went into effect on May
19, 2005. It sets limits on SOx and NOx
emissions from ships, and prohibits the
Denmark’s largest
single taxpayer
When you are the largest single taxpayer
in a country, you might expect some interest
when you open your mouth to say
something about a new tax proposal. This
is what happened when the Danish government
opened a new proposal for taxation
of companies.
The A.P. Møller-Mærsk chief executive
Jess Søderberg took a rare opportunity to
speak up in public and said that the A.P.
Møller-Mærsk Group might consider moving
its headquarters and main functions to
intentional emission of ozone depleting
substances such as chlorofluorocarbons;
sets a global limit on the maximum allowable
sulphur content of fuel oil used in
shipping to 4.5 per cent by mass, and calls
for the IMO to monitor the worldwide
average sulphur content of shipping fuel. It
also establishes specific “SOx Emission
Control Areas” with more stringent controls
on SOx emissions (1.5 per cent by
mass) and finally prohibits onboard incineration
for ships carrying certain products.
It is no good pretending otherwise, shipping
is a major air polluter. In order to safeguard
an already tarnished image, it needs
to embrace bright ideas, i.e. for ships to
switch to distillate fuel, in this case marine
diesel. The suggestion was first floated by
the international independent tanker organisation
Intertanko and is supported by the
Hong Kong Shipowners’ Association. But
beyond that there is little apparent support
despite the merits of using distillate fuel;
cleaner air and less dangerous pollution in
case of accidents at sea.
But because most of the international
shipping organisations are by nature reactive
rather than proactive, they will never
be ahead of time. By choosing distillate
fuel, shipping would clean up their act
decisively and be able to meet future more
stringent limits. Defeatist talk by the ICS
that refineries cannot deliver the necessary
a foreign country if the proposal would
stay as it appeared in the first draft. It
would affect the Group considerably and
would drain the company of a large sum
of money, much more than the DKK 13.5
billion the company paid in taxes in 2006
as the largest single taxpayer in Denmark.
The prime minister was quick to reply,
saying that the government had no intention
of driving large, healthy companies
out of the country. The purpose of the
new proposal is to come down on the
equity foundations, which purchase Danish
companies and fill them with debts so
EDITORIAL
Defeatist talk by the ICS
that refineries cannot deliver
the necessary quantities
is less than helpful.
quantities is less than helpful. We all know
that there will be sufficient volumes when
demand is present. Such is the market,
and ICS knows it. All ICS will say about
the use of distillate fuel is that they have
no objection to some ship owners making
the switch. Shipping is clearly split on support
of distillate fuels. Many owners look
for a lead from ICS and BIMCO, but are
not getting it. Rather, these organisations
are doing their best to confuse the issue
and thereby fritting
away an opportunity
to show
courage and
take the lead. It
is a pity.
petter arentz
Editor, Norway
Phone: +47 33 40 12 00, E-mail: petter@shipgaz.com
that they do not pay any tax at all. Naturally
the usual crowd has been in view in
the media saying that a multinational
company should not have political influence
and just pay their taxes, but it is
rather natural to have a say when you pay
for the music or part of the music.
It will be interesting to see what the
government and the Minister for Fiscal
Affairs will do to avoid the anger of A.P.
Møller-Mærsk and hit the equity funds,
because they cannot make a proposal for
equity funds with exemption for A.P.
Møller-Mærsk, the largest privately owned
shipping company in the world.
SCANDINAVIAN SHIPPING GAZETTE • FEBRUARY 23, 2007 11