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Political expediency
will override dithering shipping
Political expediency has totally overtaken international shipping organisations’ efforts to reduce ship emissions. In fact, if the International Chamber of Shipping (ICS), representing national ship owners’ associations, and Baltic and International Maritime Council (BIMCO) do not stop dithering they could risk being left out of further proceedings.

ICS has, typically, asked for more time to find a consensus among member organisations instead of taking a lead. And they are talking of sulphur limits to allow alternative compliance measures and looking for a net environmental benefit. It is much to late for this sort of approach and it may result in shipping getting a worse deal than if they had taken a more proactive and sensible approach. With the recent United Nation report on global warming and climate changes, politicians will want to see a different approach.

Sometimes it is worth a reminder that the IMO agreed MARPOL Annex VI (a separate treaty), dealing with air emissions from ships, in 1997. On May 18, 2004, MARPOL Annex VI was ratified by the 15th nation, bringing the total percentage of the world’s merchant shipping tonnage to 54.57. Annex VI went into effect on May 19, 2005. It sets limits on SOx and NOx emissions from ships, and prohibits the intentional emission of ozone depleting substances such as chlorofluorocarbons; sets a global limit on the maximum allowable sulphur content of fuel oil used in shipping to 4.5 per cent by mass, and calls for the IMO to monitor the worldwide average sulphur content of shipping fuel. It also establishes specific “SOx Emission Control Areas” with more stringent controls on SOx emissions (1.5 per cent by mass) and finally prohibits onboard incineration for ships carrying certain products.

It is no good pretending otherwise, shipping is a major air polluter. In order to safeguard an already tarnished image, it needs to embrace bright ideas, i.e. for ships to switch to distillate fuel, in this case marine diesel. The suggestion was first floated by the international independent tanker organisation Intertanko and is supported by the Hong Kong Shipowners’ Association. But beyond that there is little apparent support despite the merits of using distillate fuel; cleaner air and less dangerous pollution in case of accidents at sea.

But because most of the international shipping organisations are by nature reactive rather than proactive, they will never be ahead of time. By choosing distillate fuel, shipping would clean up their act decisively and be able to meet future more stringent limits. Defeatist talk by the ICS that refineries cannot deliver the necessary quantities is less than helpful. We all know that there will be sufficient volumes when demand is present. Such is the market, and ICS knows it. All ICS will say about the use of distillate fuel is that they have no objection to some ship owners making the switch. Shipping is clearly split on support of distillate fuels. Many owners look for a lead from ICS and BIMCO, but are not getting it. Rather, these organisations are doing their best to confuse the issue and thereby fritting away an opportunity to show courage and take the lead. It is a pity.

//Petter Arentz

Denmark’s largest single taxpayer
When you are the largest single taxpayer in a country, you might expect some interest when you open your mouth to say something about a new tax proposal. This is what happened when the Danish government opened a new proposal for taxation of companies.

The A.P. Møller-Mærsk chief executive Jess Søderberg took a rare opportunity to speak up in public and said that the A.P. Møller-Mærsk Group might consider moving its headquarters and main functions to a foreign country if the proposal would stay as it appeared in the first draft. It would affect the Group considerably and would drain the company of a large sum of money, much more than the DKK 13.5 billion the company paid in taxes in 2006 as the largest single taxpayer in Denmark.

The prime minister was quick to reply, saying that the government had no intention of driving large, healthy companies out of the country. The purpose of the new proposal is to come down on the equity foundations, which purchase Danish companies and fill them with debts so that they do not pay any tax at all. Naturally the usual crowd has been in view in the media saying that a multinational company should not have political influence and just pay their taxes, but it is rather natural to have a say when you pay for the music or part of the music.

It will be interesting to see what the government and the Minister for Fiscal Affairs will do to avoid the anger of A.P. Møller-Mærsk and hit the equity funds, because they cannot make a proposal for equity funds with exemption for A.P. Møller-Mærsk, the largest privately owned shipping company in the world.

//Bent Mikkelsen