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Decarbonization is key factor for Greek shipping community

Decarbonization is key factor for Greek shipping community

The latest annual report from the Union of Greek Shipowners (UGS) highlights the resolute commitment of the Greek shipping community, a dominant force in the global maritime industry, towards decarbonization and support for sustainable solutions. Aligned with the mandates set by the International Maritime Organization (IMO), the UGS emphasizes that Greek shipowners’ dedication to combating global warming is evident in their conviction that regional measures, which fail to account for shipping’s international nature, hinder maritime transport and world trade, thus obstructing the collective battle against climate change.

The report underscores the delicate balance required between ambitious goals and practical feasibility within the challenging-to-decarbonize maritime sector. Acknowledging the complex interplay among energy supply, demand, and environmental concerns, the UGS emphasizes the importance of a comprehensive approach to decarbonization.

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As the shipping industry moves toward a greener future, the UGS places particular significance on the development of next-generation zero-carbon fuels and propulsion technologies. The organization adopts a technology-neutral stance while favoring drop-in fuels compatible with existing Internal Combustion Engines (ICEs) and bunkering infrastructure.

Decarbonization, the report contends, demands substantial investments in fuel production and supply infrastructure. The UGS advocates for collaborative efforts involving various stakeholders, including fuel producers, shipyards, engine manufacturers, ports, and financial institutions. This collective action aims to ensure the global availability of safe and effective propulsion technologies and marine fuels.

The UGS lends support to a ‘Fund and Reward’ mechanism proposed by the shipping industry. Financed through contributions based on ships’ CO₂ emissions, this mechanism incentivizes reduced carbon emissions and rewards the use of low-carbon fuels and technologies. Additionally, the UGS calls for a technical Global Fuel Standard, similar to the IMO 2020 sulfur regulation, to complement this economic measure in a manner that minimizes administrative burdens, particularly for small and medium-sized enterprises in the shipping industry.

Despite the ambitious goals, challenges on the path to decarbonization remain. The UGS points out imperfections in the IMO’s Carbon Intensity Indicator (CII) framework, emphasizing the need for adjustments to ensure practicality and effectiveness. The report also highlights the role of finance in driving fleet growth and the decarbonization agenda. The EU Taxonomy framework, while recognizing shipping’s potential contribution to a climate-neutral economy, requires revisions to facilitate vessel financing. Moreover, tailored prudential rules for ship financing within the EU banking sector are deemed essential for sustainable growth.

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The UGS stresses the importance of aligning EU measures with international standards set by organizations like the IMO and ILO to maintain EU shipping’s international competitiveness while preventing undue burdens.

Fleet statistics reported by the UGS show that Greece maintains its position as the world’s largest shipowning nation, controlling 21% of the global merchant fleet’s deadweight tonnes. Greek shipowners excel in bulk/tramp shipping, particularly in staples like grain, oil, gas, iron ore, and more. The report attributes the growth in the average size of Greek-owned vessels to optimized global seaborne trade and enhanced living standards.

Melina Travlos, UGS President, stresses the need for unity and coordinated efforts to address current challenges and maintain industry leadership. She highlights the importance of legislating with a profound understanding of shipping’s significance and special characteristics for the development of a viable long-term strategy that ensures sector sustainability amidst fierce international competition.

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