Is the shipping market hindering efficiency?

Energy efficient ships are saving millions of pounds on fuel but the market is failing to reward the owners. The UCL Energy Institute (UCL) and the Carbon War Room (CWR) […]

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By Jonny Bairstow

Energy efficient ships are saving millions of pounds on fuel but the market is failing to reward the owners.

The UCL Energy Institute (UCL) and the Carbon War Room (CWR) have released a study that suggests efficient vessels do not appear to deliver significant rewards for anyone other than the fuel payer.

That’s despite the difference in fuel costs between a B-rated and an F-rated Capesize vessel, with the former saving on average $5,500 (£4194.95) per day or nearly $1.5 million (£1.14m) annually in 2012.

This means that in today’s markets there is little financial incentive for other owners to follow their example and invest in more environmentally friendly ships.

While charterers can play a role by rewarding owners who help them save fuel, financiers have the power to decide which ships are made and which are not.

The report suggests banks making investment decisions should consider how to factor efficiency into their decision making so that it can benefit all parties involved and the environment.

Mark Clintworth, Head of Shipping, European Investment Bank, said: “Financiers are in a key position to reshape the makeup of the global shipping fleet through their investment decisions today and in the future.

“As maritime shipping is a key driver of sustainable economic development, this research represents a crucial first step in identifying how maritime financial institutions can prepare for a profitable low carbon future and help shape it.”