Future-Ready Shipping Conference 2015, Singapore

Future-Ready Shipping Conference 2015
28 September 2015, Singapore
Keynote Speech by Mr Koji Sekimizu
Secretary-General, International Maritime Organization

Excellencies, Mr. Tan, Distinguished Participants, Good Morning.

It is really a great pleasure for me to be invited to this Conference. As an introductory remark, I just want to say that: the world economy really relies on shipping. This is just a simple fact. Sustainable development will rely on a sustainable maritime transportation system (SMTS), and for sustainable shipping, technology will play a crucial and central role. A wide range of technologies will be required to support a sustainable maritime transportation system. But there are vast differences among the countries where those technologies will be deployed. Technology for an energy-efficient transportation system is particularly complex, as the available options are very dependent on so many variables.

In developing countries, technological capabilities are often limited and financial, institutional and other constraints pose serious challenges for innovation. Other developmental challenges, such as enhancing access to energy and sustainable livelihoods, are equally pressing. It is imperative to explore new ways and means of promoting innovation in the maritime sector. We must explore institutional arrangements that can advance technology and technological innovation to meet the future needs of the industry. This Conference: The Future-Ready Shipping (FRS) Conference is our answer from the International Maritime Organization.

The shipping industry is already the most energy-efficient mode of cargo transport. We all know this, but we need to make further progress. The need to reduce emissions from ships has been clearly understood by IMO. IMO has led the way in steering the shipping industry towards a clean, sustainable future. Efforts to reduce airborne emissions from ships started in 1990 and took a major step forward in 1997, with the adoption of the MARPOL Convention Annex VI which currently regulates air emissions from more than 95% of the world’s shipping tonnage and work to build on the success of 1997 is already well underway. Further, more stringent global measures to reduce emissions from individual ships by 30% by 2030 established through the 2011 amendments to MARPOL Annex IV are now in force.

Thirty percent reduction per ship by 2030, is my goal but this target will pose a global challenge in the form of technology transfer and capacity-building. The focus of this Conference is on energy-efficiency because of two reasons:

1. A new global climate change agreement is being negotiated and expected to be agreed in Paris later this year; and
2. The demand for shipping services will increasingly be from developing countries.

This FRS Conference today is a pioneering initiative to start a global dialogue on technology transfer. We have twin objectives:

1. To take a critical look at the existing baseline; and
2. To explore a realistic future scenario.

Today, we begin this pioneering Conference and I hope IMO will continue holding regular FRS Conferences in the coming decades.

I would like to congratulate Singapore on leading this initiative to set up this new, pioneering, global forum. I think it is very timely in the context of the climate change debate for the shipping industry and it is most needed in the shipping industry. 

Let me now talk about energy-efficiency and technology transfer. The lack of an enabling environment is perhaps the single most important impediment to addressing energy- efficiency and climate change issues, especially in the maritime context. Chapter 4 of MARPOL Annex VI on the “Regulations on energy-efficiency for ships” and the supporting resolution MEPC.229 (65) call for technology transfer and capacity-building and we have already made some achievements in the Ad-Hoc Expert Working Group at IMO-level which has been examining barriers to technological transfer.

We must emphasize the need to understand technology transfer as actions of cooperation and partnership – NOT a purely commercial transaction between developed and developing countries. In an effort to promote cooperation and partnership, IMO has already established:
• The ITCP programme, particularly the creation of a dedicated global programme under ITCP;
• IMO-KOICA (Republic of Korea) project on energy-efficiency;
• Held awareness-raising and train-the-trainer workshops;
• Initiated GEF-UNDP-IMO GloMEEP project, which is being launched today at this Conference, and which includes a significant private sector partnership to be named as Global Industry Alliance for Low Carbon Shipping;
• Organized a number of dedicated regional workshops that focus on technology transfer aspects; and
• Mobilized resources from bilateral donors.

My message to this Conference is three-fold. First, it is critically important to develop global partnership and networking mechanisms to accelerate cooperation in maritime technology transfer. Second, it is important to institutionalize the technology transfer and capacity-building effort to meet the unique needs of the maritime industry – the most international industry of all; and third, Government and industry leaders need to support this concept and to contribute to building this global partnership and network.

And I would also like to highlight my goal to establish a reduction target for individual ships. The per ship reduction target by 30% in 2030 is, in my honest view, possible. Suppose you have a pie of world emissions, the shipping contribution is just 2.2%. If you have a pie on your table, 2.2% is a very narrow sliver of the pie. If the world economy and world seaborne trade expand, the shipping industry capacity will need to expand. But if the world economy does not grow, for example in another 15 years (to 2030), the scale of the pie will be the same, but we will have to reduce emissions from ships by 30%. Therefore, we can achieve a significant cut in the pie.

However, the world economy would need to grow, increasing seaborne trade or it is not sustainable. If the world economy grows by 40% by 2030, and if we achieve a 30% reduction target per ship by 2030, then we can achieve that. The total emissions from ships and the shipping industry will remain at the current total emissions level. If the world economy grows by 60%, the total emissions from the world may increase by 60%, but the shipping industry can only increase by 12% if we achieve 30% reduction. In my view, this is a significant contribution from the industry and we can achieve this via new ships and existing ships by 2030. In my judgement, 80% of current existing ships will be replaced. We should target the remaining 20% and reduce emissions. That is the reason for this Conference, to ensure technology transfer in order to achieve the target globally. This is the value of this Conference.

Taking this opportunity, I would like to touch upon the current negotiations process leading up to Paris. I have prepared a statement to be released at today’s FRS inaugural Conference. It is important to stress that IMO is, to date, the only international organization to have adopted global legislation to significantly reduce CO2 emissions from a particular industry. Nothing similar exists for any other industry or business sector. IMO has consistently and successfully, over time, explored new possibilities to improve upon existing technical, operational and management measures to reduce vessel-source air pollution, including greenhouse gas emissions. IMO continues to contribute to the global efforts to reduce greenhouse gas emissions in the context of the climate change debate.

These efforts are working. Through compliance with these IMO regulations, international shipping has taken a genuine leadership role in mitigating its contribution to climate change. According to figures contained in IMO’s most recent study of greenhouse gas emissions, during the five years to 2012, the total contribution from international shipping to global emissions actually reduced from 2.8% to 2.2%. This was despite significant overall growth in seaborne trade and a corresponding growth in cargo-carrying capacity during the same period. Through compliance with IMO regulations, shipping can grow with the global economy and reduce emissions at the same time. This is a significant progress of what we have done.

But there is a need for further progress to be clearly recognized at IMO. Since the amendments to MARPOL Annex VI came into force in 2013, IMO has continued to develop practical assistance to support their uniform implementation throughout the global fleet, as well as to develop an all-encompassing data collection system for ships’ fuel consumption. While the most recent proposal to further limit greenhouse gas emissions from ships was actually delayed citing the need for further study, there is no question that the work will continue at IMO.

IMO regulations already in force will ensure that emissions per ship will be significantly reduced. I am confident 30% per ship reduction in 2030 is a realistic target. But what they cannot do, and what shipping cannot do, is control the total, global demand for cargo to be carried. This is directly related to growth in the world economy.

Of course, in a future low-carbon society, the growth of demand for oil, coal and gas may fall. This, in turn, may serve to limit the overall emissions from the shipping sector. But, if the global economy grows, demand for shipping will also grow; which means that, even though emissions per ship will be greatly reduced under established IMO measures, the overall emissions from the sector may actually increase. History is certainly on the side of growth, seaborne trade has grown more than three-fold during the past four decades and the world fleet capacity has grown four-fold during the four decades. This may give rise to calls for other measures, beyond those already adopted, or currently under consideration, by IMO.

There is a good question; who should decide on such additional measures and where should this be done?

And I believe again IMO is the only place to take this debate forward, too. Indeed, this was already recognized in the Kyoto Protocol, where IMO was designated as the agency to deal with greenhouse gas emissions from shipping – a responsibility that it has diligently and successfully undertaken.

But, whatever world leaders decide with regard to shipping during the forthcoming climate change negotiations, they must first carefully consider the impact of any decisions in light of the enormous contribution that shipping makes to the world economy.

In the process leading up to the Paris meeting, world leaders might be tempted to consider specific measures aimed at reducing shipping’s overall contribution of CO2 emissions, such as global overall cap. Such measures would artificially limit the ability of shipping to meet the demand created by the world economy, or would un-level the level playing field that the shipping industry needs for efficient operation, and therefore must be avoided.
If such measures are enforced, it will seriously distort the shipping industry and have a serious impact on the economy of almost all nations. Actually, increases in land-based emissions are significantly having a serious adverse impact.

In addition, fiscal measures such as a levy on fuel are under active consideration, but such measures really require careful analysis and development, considering a host of environmental, technical, economic and geopolitical factors. For these matters, so critical to the world’s future, there are no simple answers. But IMO is the most capable and appropriate forum for such complex considerations to occur and be resolved.

IMO has a solid track record of solving problems with complex multinational dimensions. For decades, by developing measures that are applied universally to the world’s most international industry, IMO has served global society very well. As its record to date so clearly demonstrates, IMO should be entrusted to continue that work when it comes to addressing greenhouse gas emissions from shipping.

These are my views distinguished participants, but, I wanted to share these with you today, since the work of the Conference is directly relevant to the current climate change discussions and negotiations.

Today, I will release my statement in London, copies of my statement will be available to participants to this Conference.

Distinguished participants, IMO has established compulsory global measures to significantly reduce CO2 emissions from ships but your work on technology transfer is vital for the effective and global implementation of IMO measures to achieve our emission reduction goals.

I wish you fruitful discussions at this Conference and best of luck for all of us.

Thank you very much.