Maritime and offshore advisory company Ideocean Holdings has commented on the economic realities of green shipping - in response to news that leading charterers will only deal with ’Green Tonnage’, and that ship finance banks are closely considering effeciency metrics, such as Energy Efficiency Design Index (EEDI), as part of their lending decisions. Speaking at the Fullerton Hotel in Singapore, Manish Singh, Group Managing Director, touched  upon a number of standpoints from different stakeholder groups. While shipyards are promoting newer ‘eco-designs’, he said the shipowning community is flagging up the real risk of prolonged misery for the industry if newbuild activity continues in significant numbers without reference to the oversupply situation.
The discussion also looked at the viability of retrofitting green technology to existing tonnage and the challanges in integration and interrelation of some such technologies. Mr Singh said: “Green Shipping today is being driven by the convergence of some of the existing technologies and capabilities – and by the economic reality of high fuel costs and the firm intent by end users to achieve greater effeciencies in their supply chains.”
It is likely that the longetivity of a typical asset will reduce. Mr Singh alluded to a recent Lloyd’s Register industry survey in which around 75% of respondents said VLCCs would be scrapped at 15 years or younger. “The supply situation will dictate matters,” he said, adding: “there will also be a faster rate of technological obsolescence.”
Representing the ship owner’s perspective, Shaj Thayil, Vice President, Technical Services and Ship Management, NOL, said: “Certain segments have to scrap or change – that is inevitable, it is simple maths. Fuel prices have increased 153% since January 2009 and there is no indication of change. Older ships are no longer competitive and will have to move from the trading place.”
“The market will dictate a lot of these things because if there is a shortage of tonnage then the eco debate is less relevant where as if the overcapacity remains then ships will have to be scrapped,” said Iain Wilson, Regional Marine Manager for Lloyd’s Register Asia.
This sentiment comes on the back of news out this week that scrapping worldwide has hit an all-time high this year. A total of 960 vessels of a cumulative 44.1m dwt have been sold for demolition in the first nine months of 2012, exceeding the record annual demolition volume of 42.6m dwt, set in 1985. Scrapping in 2012 is forecast to reach 57m dwt, comparing with 42.4m dwt in the whole of 2011.
Source: Ideocean Holdings