THE International Maritime Organization can resolve the impasse between shipowners and charterers that is holding back green investments, according to Shell head of shipping Karrie Trauth.

Trauth told the Lloyd’s List Outlook Forum that firm market-based measures to cut greenhouse gas emissions from shipping would push the market to align its incentives.

If the IMO succeeds next April and the right signals are in place, “we will start to see where the benefit goes”.

“We will be forced to create new terms, find new ways of sharing both the exposures — so the costs of compliance — as well as the opportunity of those energy-efficient technologies.”

Trauth said the tenor of term charters determined how owners and charterers calculated, projected and understood the benefits of green upgrades. Such investments would save charterers fuel on shorter charters, but might not be worth it for the owner.

Trauth said it was hard for an industry with a series of standard contracts to work together. But companies would look for the best deal once MBMs were in place.

“We will all make money figuring this out,” she added.

She said the biggest risk facing shipping in the future was failing to make sure energy ministries provided for enough green fuel supply in national policies.

Citi logistics and offshore chairman Michael Parker said a successful IMO regulation would transform shipping. The world would wake up to discover an organisation few had heard of had delivered a global carbon price, regardless of national policies.

“It’s going to affect every company in the world that moves things by sea,” he said.

“To me this is the most fundamental thing in the 40-odd years I’ve been involved in shipping.”

But he added: “If nothing happens, then it’s a disaster.”

Parker said the current generation of newbuildings would probably not be left as stranded assets by this regulation. But they would be less attractive to cargo owners and financiers. Digital optimisation and efficiency retrofits were “a sine qua non”.

“If you’re not doing that, then frankly you are missing something and you risk going out of business in the long run,” Parker said.

The forum was told last year’s enthusiasm for methanol as a future fuel had dimmed; more industry heads thought dual-fuel LNG the lowest-risk option. More owners have ordered conventional fuels than predictions a year ago would suggest.

“Things have definitely changed,” said Lloyd’s Register chief executive Nick Brown.

Brown said the focus had been too much on the ship itself and not on where the fuel and its feedstocks would come from.

“We have not been as broad in our stakeholder communications as we could have been,” he said of the industry.

Zodiac Maritime chief operating officer Tanuj Luthra said the methanol fuel supply chain had not reached viability despite “huge, genuine efforts” and resources by major companies.

“It’s an industry problem to solve; it’s not a shipowner problem,” Luthra said.

Trafigura global head of shipping Andrea Olivi said his company planned to run six new very large crude carriers on biofuels and four medium gas carriers on dual-fuel ammonia.

Olivi said the company would never have ordered the MGCs were it not for the FuelEU Maritime regulation, which will start to force a fuel change from next year for ships trading with Europe. The world needed something similar on a global scale, Olivi said.

Parker said it probably did not matter whether shipping met its 2030 IMO target as long as the regulation came next year.

Governments would be “suddenly very interested in shipping” and the “insular conversations we’ve been having for 50 years will no longer happen”.

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