‘Decarbonisation in the maritime industry is well and truly underway’ – MMF chairman

Malta Maritime Forum Chairman Godwin Xerri

Last Updated on Thursday, 8 February, 2024 at 11:57 am by Andre Camilleri

Decarbonisation in the maritime industry is well and truly underway, chairman of the Malta Maritime Forum (MMF) Godwin Xerri said.

Xerri was addressing criticism being made about the shipping sector, arguing that “certain incorrect information appearing in media contributions is of concern to the Malta Maritime Forum not merely because it is harmful to the industry, but because it reflects a general lack of awareness and appreciation about the maritime industry and its huge economic and strategic importance to the Maltese islands. Recently, the shipping industry was described as a cheap, dirty and unregulated mode of transport. This cannot be further from the truth and cannot go unanswered”.

Xerri argues that shipping is the “most energy efficient” mode of transport of goods and people.  This efficiency, he said, results from sheer critical mass. “Modern ships carry 23,000 containers at one go. Shipping gives the lowest emission cost per ton mile. Volume also makes shipping the most cost effective mode of transport, hence it accounts for over 80% of world trade in tonnage terms. Clearly, greater environmental and economic efficiencies can be gained if the proportion of waterborne traffic is increased. While this gives scope for expansion, the type of growth which the maritime industry seeks is green, not merely because it is being expected to do so by regulation and ESG considerations, but because the industry itself is a victim of grave, climate change consequences.”

Rising sea and air temperatures, shifting sea levels and the frequency of extreme marine events like tropical storms and cyclones are most devastating to all maritime players, he said. “Decarbonisation in the industry is well and truly underway. Our shipyards have been installing Exhaust Gas Cleaning Systems (otherwise referred to as ‘scrubbers’) for several years. These enable vessels to entrap plumes from the main engine funnels before reaching the air. The exhaust gases are turned into liquids and treated before disposal. Besides, the shift towards transitional fuels is also progressing strongly,” he said. 

Xerri added that Maltese ports already welcome mega-carriers and cruise-liners that run on Liquid Natural Gas (LNG), “which is classified as a clean fuel because it does not emit soot, dust or particles and produces insignificant amounts of sulphur dioxide, mercury and other compounds considered harmful to the earth’s atmosphere”.

“These positive developments undertaken by responsible ship owners are complemented by continuous investment locally to ensure a more comprehensive green transition in the wider maritime industry.” In order to accommodate these new generation mega-carriers, the Malta Freeport invested €20m in six new-technology megamax quay cranes which, besides the necessary stacking capability, are more energy efficient and less noise polluting, he said.

“Moreover, the Freeport recently invested in digitalisation projects, which optimise job distribution of terminal tractors and rubber tyre gantries to reduce idling, undesired truck turnarounds and container re-handling.”

He also mentioned the onshore power supply (or shore-to-ship) project undertaken by Infrastructure Malta with the co-operation of private industry. “This project fulfils one of the strategies recommended by the World Port Climate Initiative for reducing the environmental impact of seagoing vessels in ports as it allows ships to switch off their on-board power generation plants and plug in to shore-side electricity points to power their on-board services.”

Xerri also spoke about the regulation of the sector. The shipping industry, he said, is governed by local and European laws and international conventions which are regulated and enforced by local (Transport Malta), regional (EU) and multilateral authorities (IMO) in the most stringent of manners. 

“Serious operators, which constitute the vast majority of players, venture beyond their legal obligations by adhering to voluntary standards in the areas of sustainability, quality management and risk assessment upholding frameworks of the highest standards which are audited and approved by international certification bodies of utmost repute.”

‘The risks for Malta are far more pronounced’

Xerri also addressed the issue regarding the EU Emissions Trading Scheme (ETS) on shipping.

“The MMFdid not request any exemptions. Rather, it pointed out the glaring faults in the directive that bring about show-stopping unfair competitive conditions between EU and Non-EU ports, to the extent that they result in business and carbon leakage. The commendable climate change objectives of the directive will therefore be defeated, but it will still inflict catastrophic economic consequences on those EU ports that will lose business to non-EU transhipment hubs where the ETS applies differently or does not apply at all.”

The risks for Malta are far more pronounced, he said. “If unfair competition caused by ETS drives transhipment activity elsewhere, the damage will not only be contained to the Malta Freeport, but will spread across the entire economy.” Malta, he said, stands to lose the direct maritime connectivity to the rest of the world, “which it is able to enjoy only thanks to the world’s five major shipping carriers being attracted to the efficiencies of the Freeport where they call regularly to perform transhipment operations. If, due to the unfair manner in which ETS is implemented, these transhipment operations are drawn elsewhere, the major lines will no longer call at Malta because the volume of domestic cargo does not economically justify a stop-over at MFT using mega-carriers”.

With the elimination of transhipment volumes, he said, Maltese importers and exporters may no longer benefit from the competitive freight rates and transit times they currently enjoy.

In view of the above, the MMF called for the postponement of the coming into force of ETS until such time that the risks involved are appropriately assessed and the implementation deficiencies are adequately addressed, Xerri added.

He also addressed what he called “misinformed assertions that are occasionally aired in the public domain”; he advocates for pulling the same rope when it comes to this sector. “The activities of the maritime industry and the connectivity it provides to support the overcoming of the insularity constraints are far too important for our country. We must all appreciate this importance and pull in the same direction with a view to protect the islands’ collective interest.”

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