Posted on: 6 February 2023
The Greek Shipping Co-operation Committee (GSCC) held a reception to celebrate the New Year 2023 and cut the Committee’s “Vassilopitta” (traditional New Year’s cake) at the Staple Inn Hall in London on January 19th.
GSCC Chairman Harry Fafalios delivered a welcome address, in which he lamented the lack of clarity over what green fuels will be available to use safely in the future, prefacing it with a useful summary of how major shipping markets performed in 2022.
“Looking back over the last 12 months, the fates of various shipping sectors have almost been a rollercoaster ride,” he said. “The container market, which saw the highest freight rates ever last year, is now languishing at levels which are 80-90 percent below their peaks and with a disturbingly large order book.
“The tanker market rose from the doldrums and even now various sectors are performing very well. The LNG / LPG markets also have seen some historically high freight rates and the order book has risen to very high levels.
“The car carrier sector has also risen from its pandemic level lows and is rewarding its owners well at the moment.
“The dry bulk market, which started 2022 strongly is now at rather disappointing levels and it is uncertain as to what may bring about a turnaround. Its fleet is the largest on record and the orderbook although historically low is certainly not negligible.
“Against this background, the Greek controlled merchant fleet, amongst the largest in the world, is getting younger by the year due to judicious second-hand sales and a substantial orderbook of low carbon high technology newbuildings in all sectors,” he observed, adding: “This fleet renewal and expansion would probably be more robust if only we knew which fuel, we will be using over the next 20-30 years.”
“The issue of what future propulsion method will be adopted or what fuel is chosen, is still anything but settled,” he continued. “Many companies, whether they are shipping companies or commodity traders are touting the strengths of their favourite fuels but none so far have a real green footprint on a well-to-wake basis.
“We are still awaiting engine and ship builders to come up with real green solutions.”
Regarding proposed market-based measures to incentivise decarbonisation, Fafalios said: “It is not enough for regulators, be they IMO or the EU, to create a fiscal disadvantage for shipping if they cannot come up with real solutions. However, it is very important to stress that we support the IMO exclusively and not the many regional markets because we need global solutions and not regional efforts. Otherwise, we will never succeed in truly decarbonising shipping as opposed to filling up coffers.”
He went on the express his belief that “hand in hand with the above, we need a simple incentive such as a fuel levy as a medium-term measure until safe alternative fuels become available in the long term. In the short term, we must be patient and realise the real benefits of EEXI,” he added, referencing the IMO’s new Energy Efficiency Existing Ship Index.
But the GSCC chief reserved his harshest criticism for the EEXI’s accompanying operational index, the Carbon Intensity Indicator (CII), which he described as “another short-term measure in the IMO roadmap [which] seems to have no respect from either charterers or shipowners. World shipping is too complex to try and use rather simplistic measures for vessels fuel efficiency.”
