What now, coach???
A new report found that more than 75% of ships will not meet the International Maritime Organization’s (IMO) new Environmental social and corporate governance (ESG) index aimed at decarbonizing the industry. This means that many ship owners will be forced to slow ships down to reduce emissions but doing so could deepen the global food and energy crisis by reducing available ship capacity.
Full article, HERE from Watt’s Up with That website.
When you add this to the finance world’s Poseidon Principles actions/accountability, and the costs variable of $200M to $600M per ship and and average of three years to complete one, this will be interesting in light of the fact that there are approximately 44,000 total cargo ships in the world.
If 75% fail this new requirement, that means that roughly 33,000 don’t meet the new standards.
Now, they can slow down, which reduces emissions… But that costs money and slows delivery. What happens if it’s food stuffs like bananas? Will they be ripe by the time they hit the pier?
If they slow down by 10%, that adds roughly 2 days to a China to LA cruise. Over a year, that would ‘cost’ one round trip per year, and around $3,000,000 in extra operating costs for a 4000 TEU ship.
The main ship manufacturer is China, which basically ‘self funds’ the ships, and figure the odds of them actually ‘obeying’ the letter of this new requirement.
This could just flat get ugly… As if we don’t already have enough problems with the supply chain.