Global Economics

Shipping Surge Prompts CO2 Concerns


Global shipbuilding is booming and ports are expanding. Now the UN wants to change emissions targets for the polluting industry

Commercial shipbuilding may be a vestige of what it once was in the UK, but it is a different story in Shanghai, where along 5 miles of coastline on Changxin island the China State Shipbuilding Corporation is building the world's largest shipyard. The site is crucial to China's fight to claim the mantle of the world's largest shipbuilder from South Korea.

Yet this is far more than a tussle for regional supremacy. The global shipbuilding industry is in the midst of its biggest boom ever with the numbers of tankers and bulk carriers expected to increase by 50 per cent by 2012.

Huge tankers, bulk carriers and container ships -- the largest ships in the world's fleet -- are sliding out of the dry docks in Asia at a rate of nearly four a day. They are responding to growing demands for anything from authentic soy sauce in supermarkets to the Chinese steel industry's insatiable appetite for iron ore.

The global order book for container ships, tankers and bulk carriers to be built by 2012 stands at 6,100, according to Philip Rogers, head of research at the London ship broker Galbraith's. "This is the largest volume we have ever seen," said Mr Rogers, "It is unprecedented for the industry."

The coming deluge of new ships has the world's largest ports scrambling to expand capacity, and politicians, finally, beginning to take notice of what environmentalists argue is an industry that is already doing as much damage to the environment as aviation, and which could do much more.

Nearly as many ships will come into service over the next five years as the number of jumbo jets -- 6,900 -- expected to hit the skies over the next decade. Yet while airlines and aeroplane makers have been pilloried by environmentalists and drawn into the European emission trading sheme, shipping has thus far escaped the controversy. This is despite the generally accepted view that it generates emissions at least equal to the 2 per cent of global emissions generated by airlines.

By several estimates, including that of BP Marine, the shipping arm of the oil giant, shipping emissions could account for more than twice the greenhouse gases that flying does. Like aviation, shipping emissions fall outside the Kyoto protocol.

Later this month, an international panel of academics and industry magnates will make their final submissions in an inquiry, commissioned by the United Nations International Maritime Organisation (IMO), into the pollution caused by the world's 47,000-strong global fleet. Yet by the time their recommendations are implemented, in 2009, they will be in danger of setting targets long since passed.

This has happened before. An annex to its international Marpol treaty regulating air pollution from shipping was passed in 1997 and came into effect in 2005. However, because the targets were eight years old by the time they came into effect, the IMO launched an immediate effort to revise the targets as soon as they became binding, leading to the inquiry now just wrapping up.

The IMO will publish its pollution recommendations in February. Campaigners want shipping emissions lumped in now with aviation. "Emissions from international aviation and shipping are increasing and must be tackled urgently if we are to stop the worst impacts of climate change," said Richard Dyer, transport campaigner at Friends of the Earth. "The UK Government must also include [shipping emissions] in the new climate change law from the start."

It is hard to see a way to avoid a huge increase in shipping emissions -- more than 90 per cent of world trade is conducted by sea. Unsurprisingly, China is the primary driver. The biggest of the world's ships are getting bigger to feed the massive demand from the country. The Chinese steel industry produced 66 million tons in 1990. This year, production is projected to come in at 488 million tons, creating a huge demand for iron ore shipped in bulk carriers.

Provided by The Independent—from London, for Independent minds worldwide

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