The shipowner is a proverbial scapegoat in today’s environmental perspective.

 

For those who are not familiar with the definition of a scapegoat “a goat sent into the wilderness after the chief priest had symbolically laid the sins of the people upon it (Lev. 16).”

I have written this article because I strongly feel that the shipowner is pushed for compliance with regulations without being given sufficient time to adapt to compliance practically. Today I will limit my discourse to the demand of a fuel levy to be imposed on the shipowners by the “acronym soap of representative bodies” or as I refer to them – the Umbrella Organizations representing ‘countries shipowners’ associations’.

The proposal is put forward to MEPC ( 75/7/4. 18 November 2019) by Bimco, International Chamber of Shipping (ICS), InterCargo, Interferry, InterTanko, International Product Tanker Association (IPTA) – all Europe based, World Shipping Council and CLIA, based in Washington, DC. – collectively representing some 90% of the world merchant fleet across all trades and sectors. These organizations are joined by 5 European nations (Denmark, Greece, Georgia, Malta, Switzerland) and 2 Asian (Singapore, Japan), 2 African (Liberia, Nigeria), and 1 Micronesian (Palau – US compact country).

We all know and accept, these umbrella organisations are well reputed and respected bodies who are supposed to protect the shipowner’s interest, but in reality do they?

These well-known shipowner umbrella organizations have joined together to present a proposal that each vessel over a certain threshold will be subjected to this mandatory levy of $2.00 per ton of fuel used on yearly basis for shipping decarbonisation research. This mandatory levy on shipowners is supposed to raise USD5 billion over 10 years at $500million per year. Under this scheme, I estimate over 40,000 existing vessels will be forced to pay this mandatory levy. I did a fast analysis on two main sectors of shipping Tankers and Bulk Carriers ONLY the table as below: the amount of funds that will be generated yearly and if you add the additional 20000 or vessels it will be more or less close to a billion dollars.

 

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Is shipping the right scapegoat for the R&D fund? Are shipowners the beasts of burden, cash cows or scapegoats?