With the auspices of the new Deputy Minister of Shipping Mrs. Marina Hadjimanolis the 6th Cyprus Shipping Forum took place in Limassol in March 2023.
In a fast and changing world Capital Link organizes gatherings in key shipping locations around the globe to promote the future challenges of shipping which have to do with the decarbonisation path in shipping and the industry’s needs for capital.
The first panel of speakers were Mr. Roine Ahlquist, CEO - Barber Ship Management, Mr. Andreas Hadjipetrou, Managing Director– Columbia Shipmanagement, Mr. Dimitrios Vastarouchas, Deputy Chief Operating Officer – Danaos Corporation, Mr. Dieter Rohdenburg, CEO – Intership Navigation and Moderator Mr. Theodosis Stamatellos, South Europe Marine & Offshore Manager – Lloyd’s Register discussed the new challenges for technical and commercial fleet management.
The speakers told that reduction of emissions can be achieved by joining forces with all stakeholders in the maritime industry and optimize the efficiency of vessels’ operations as well as the use of green zero carbon fuels.
We have also to wait until we see mature technological solutions in the field of energy transition taking into account the severe conditions of ships operations.
Dr. John Kokarakis, Technical Director -SEEBA Zone – Bureau Veritas, Mr. Ioannis Efstratiou, Director, Safety and Environmental Protection Directorate – Republic of Cyprus, Mrs. Charis Plakantonaki, Chief Strategy Officer – Star Bulk Carriers, Mr. Philippos Philis, CEO – Lemissoler Navigation; President – ECSA, Dr. Loukas Barmparis, President – Safe Bulkers and Moderator Mr. Panayiotis Theodorou, Director | Assurance - Deloitte Cyprus discussed the Green initiatives of IMO and the EU regional policies.
The speakers remarked that the various rules are posing a complex regulatory burden on the arms of shipowners. It is therefore, necessary to ensure that the charterers will contribute to the operational expenses for the reduction of emissions and ETS revenues are reinvested in shipping.
A speaker pointed out “we as an industry has to focus on the efficiency of our fleet. The technology gives today many options to improve the energy performance of ships such as monitoring tools, digitalization, speed optimization, hull cleaning and other technical solutions which pay back the investment done by the shipping companies.
These are all short term solutions but we have to prepare for the mid and long term measures. In the following years there will be several schemes that will be based in R&D initiatives that reduce the carbon & GHG emissions.
However, we have to note that the cost of investments for the development of new green fuel will be imposed to the end consumers.
The most effective way to achieve a sustainable future is to carry out fisibility studies for long term planning, mitigate the risk of environmental solutions and collaboration in putting together all the stake holders of shipping.
Finally the speakers discussed several other solutions such as hydrogen which is the main ingredient of synthetic fuels combined with the carbon capture technology.
Mr. Vassilios Kroustallis, Senior Vice President, Global Business Development & Global Marine ABS presented the topic of “Navigating the alternative fuels landscape – impact on fleet renewal”.
Mr. Kroustallis discussed the new technologies and alternative fuels LNG, methanol, biofuels, ammonia and remarked that oil based fuels will be used less and less as we are approaching towards 2050.
Regarding CII told that biofuels blends may reduce the carbon factor.
Other considerations include:
- China is the major new construction area
- Asia, leads new orders, we expect increased number of new orders with new technology ships
- Big ships will adopt conventional fuels, LNG, methanol, ammonia and small ships will adopt batteries, fuel cells, hydrogen and hybrid solutions.
- Embracing of carbon capture and LCO2 carriers.
- Half of the orderbook is dual fueled and 81% of this is LNG
Finally it is not possible to replace the global fleet until 2050 and retrofits will play a significant role.
Captain Pankaj Sharma, Group Director Digital Performance Optimisation, Columbia Shipmanagement, Mr. Konstantinos Stampedakis, Co-Founder & CEO – ERMA FIRST, Mr. Aristos Philis, Co-Founder & CEO – KeelX, Mr. Osher Perry, Founder & CEO – Shipping Systems and moderator Mr. Jason Stefanatos, Regional Decarbonization Director – DNV discussed the issue of developing cutting edge solutions for global shipping.
They said: As technology providers we don’t only produce equipment but we have to care of the installation commissioning and after sale service. Ongoing regulatory pressure such as CII ETS scheme and other forthcoming environmental rules will accelerate the adoption of cutting edge solutions for global shipping.
Constantinos Herodotou, Governor of the Central Bank of Cyprus presented to the audience the prospects of Cyprus economy.
It must be noted that Cyprus had a GDP growth of 5.8% and expected to stand at 2% in 2022 which is a very positive development taking into account the negative economic impact in EU economy from the Russia – Ukraine conflict.
Cyprus continues to maintain a prosperous shipping community in the sectors of 3rd party shipmanagement and shipowning activities.
Regarding Sanctions are imposed at individual Russian’s state assets, financial institutions, Central Bank of Russia and Trade of Commodities and Energy.
The importance of due diligence is critical including adequate protection in the contracts.
Moderator Jasel Chauhan, Partner, Head of International Finance – Hill Dickinson and Panelists Mr. Michael Burgess, Associate Director – Ascension Finance, Mr. Constantinos Milios, Head of Shipping Finance – Eurobank Cyprus, Mr. Atef Abou Merhi, Managing Director – Pelagic Partners, Mr. Andreas Christofides, Board Member – Safe Bulkers Participations addressed the shipping industry’s need for capital.
The Speakers underlined that it is important for a shipping company with corporate structure to have access to the capital markets in order to obtain more diversity and stability.
There were also some bond issues showing the increasing investing interest especially in the sectors of LNG carriers, drybulk and tankers.
Regarding other types of alternative sources of capital the cost is fundamental either for equity or leasing finance. Another obligation is to comply with the latest and future environmental requirements as banking institutional and private equity investors have become very sensitive on ESG standards.
In addition all stakeholders in shipping are being educated on the new environmental challenges, adopting a new approach and focusing on sustainability aspects in shipping.
Mr. Fedon Tomazos, Managing Director Cass Technava Shipbroking discussed the Shipbuilding Trends – Impact on Fleet Renewal & Fuel Landscape.
Each alternative fuel has its own pros and cons. Therefore, for shipping methanol is much more easily applied to the shipping industry’s requirements however the price stands at around $800 per tonne, threefold more expensive than Heavy Fuel oil. It is quite toxic as well as ammonia and very intensive.
Carbon capture systems are premature and we need to know for each kind of fueling solution the carbon footprint from the production to the consumption.
In newbuilding prices we have a very inflationary market. Market driven forces (few berths) and cost (inflation labour costs), steel prices, interest costs and cost driven forces causing newbuilding prices to rise.
Consequently the energy transition is not easy task in such an inflationary environment. Projects backed by charterers are growing in numbers as the majority of newbuilding orders adopt dual fuel propulsion.
The shipowners’ perspective was presented by the following prominent shipping personalities. Mrs. Nicole Mylona, CEO – Transmed Shipping Co., Mr. John Michael Radziwill, CEO - C Transport Maritime (CMT) / GoodBulk, Mr. Andreas Hadjiyannis, CEO – Cyprus Sea Lines / Hellenic Tankers; President – Cyprus Union of Shipowners, Mr. Lars Barstad, CEO – Frontline, Mr. Polys Hajioannou, CEO - Safe Bulkers and moderator Mr. Stavros Pantzaris, Chairman - EY Cyprus.
They said that Cyprus continues to attract ship operators from all over the world during a difficult and uncertain global environment in the economic and geopolitics era. The shipping industry faces a polyphony in terms of the current and forthcoming regulations posing more complexity in shipping operations however over the past 12 years shipping reduced emissions by 60%.
At the end of the day the cost of the environmental compliance will be paid by the consumer especially the European citizen who imports the majority of the commodities that are carried by ships.
The emissions that are produced by fossil fuels in shipping is only 2.2% of the global. Why shipping has to reduce emissions at the same volume since pollutes much less than the other industries? asked speakers.
In this uncertain environment shipowners maintain a wait and see attitude as there is not mature technology for alternative fuels.
The world will come out for this disruptive situation gradually taking much time, perhaps 10 years to find out a new equilibrium.
The industry’s transformation is driven by the liner companies that dictate the changes are to be taken place in view of the environmental regulations. The speakers also argued that the war in Ukraine is totally unnecessary as Europe is hurting from sanctions and therefore we must sit down to find solutions.
Speakers agreed that sanctions are causing more pollution to the environment. However, all shipping market segments present positive fundamentals and the orderbook is quite low especially in the dry bulk sector.
The shipping industry’s speakers hope that transformation will favor more M&A (Mergers & Acquisitions) activities and consolidation process exploring more investment opportunities.
We have seen a lot of consolidation the last decade due to the regulatory burden, volatility of market and scarcity of capital.
Relocating to Cyprus is good for business, as the administration can solve quickly the problems tacking with the ship management functions and other related services.
Cyprus tries to accommodate shipping offering a friendly and welcoming environment and that’s why it is an attractive location for shipping operators.
Cyprus must be very proud what has been accomplished in shipping.
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