European shipping to spend less on reducing emissions

Spending on emissions reduction technology in Europe's shipping industry is likely to suffer following the Covid-19 pandemic, according to the European Community Shipowners' Association (ECSA).

In an ESCA survey of European shipping industry participants, 44pc of respondents said investing in technologies that would cut carbon emissions will no longer be possible after Covid-19. ECSA said 30pc of those who responded think spending will continue but to a lesser extent than before the crisis, while 26pc think investment can continue at the same levels as before Covid-19.

"This is a major setback for the industry, which is fully aligned with the International Maritime Organisation's (IMO) 2050 carbon dioxide reduction targets and has, since the new European Commission took office, been supportive of the EU's ambition to be the world's first carbon-neutral continent," said ECSA.

The IMO has not yet adopted greenhouse gas (GHG) regulations for vessels, but is expected to come up with a revised strategy in 2023. Until then, its initial strategy calls for reducing CO2 emissions by at least 40pc by 2030 and by 70pc by 2050, compared with 2008 levels.

Shipowners were reluctant to invest in new low-emission vessels before the pandemic. They have been uncertain about what the IMO's GHG targets and strategy would entail. But while several IMO emissions meetings have been postponed because of the pandemic, the IMO has maintained that a revised GHG strategy will be adopted in 2023.

On fleet renewal, only 11pc of respondents to the ECSA survey expect to return to pre-pandemic levels of spending. Just over half of respondents said fleet renewal will not be possible, and 37pc think it will happen to a lesser extent than before.

Every part of the European shipping industry, except for tankers, is facing an immediate loss of revenue in the second quarter of 2020, ECSA's survey found. The worst-hit segments are ferries, cruise ships, car carriers and offshore service vessels.

The survey found that most participants, 74pc, do not expect a return to pre-Covid-19 activity levels during 2020, even if a gradual return to "normal" business conditions starts in June.

By George Collard