1st Foresight Maritime Dialogue took place at Georgetown University

WASHINGTON, DC – GreekNews USA

The 1st Foresight Maritime Dialogue took place on March 5th, 2024 at Georgetown University, attended by ship managers, diplomats, researchers, lawyers, policy shapers and students. CommonLawgic hosted the event and welcomed the guests: Mrs. Yanna Pavlopoulou, GU LLM’89 as President and Founder, and Mr. Evangelos Maltezos, as Managing Partner, and Technical Director of Hellenic Star Shipping Co.

Dr. Spiros Dimolitsas, Senior Vice President for Research & CTO, of Georgetown University (GU), welcomed the distinguished guests, in the historic RIGGS Library at Georgetown University, built in 1890, with a generous gift from the Riggs’ family. The RIGGS Bank in 1867 financed the purchase of Alaska Territory from the Russians, an important act for American sovereignty.

Dr. Dimolitsas invited to the podium Mrs. Semiramis Paliou, CEO of DIANA SHIPPING INC., and Chairperson of HELMEPA and INTERMEPA, for the Opening Remarks.

Mrs. Paliou talked about the strategic importance of shipping as the world’s largest and most efficient means of transportation for the global trade and the US. Greek-owned vessels comprise more than 20% of the world’s fleet and control over 31% of the tanker fleet, 25% of the dry bulk fleet, and 22% of the LNG fleet. She highlighted the industry’s sustainability concerns and that they responsibly respond to new regulations. It is anticipated that the EU Emissions Trading System will be imitated by other countries around the world, unless the IMO, steps up, with ambitious measures in 2027 to adopt uniform and global regulations to measure and price emissions. HELMEPA and its sister organizations under the INTERMEPA umbrella serve as open platforms for collaboration, exchange of best practices, and tools for promoting the transformation of our industry into a more sustainable one. Of special focus were the HELMEPA’s latest achievement named METAVASEA upskilling training of 1500 seafarers, and climate awareness engagement of the young generation on People-Centred Transition for Maritime Decarbonization in the East Mediterranean.

Mrs. Yanna Pavlopoulou, GU LLM’89, introduced the panelists and the audience, and welcomed the HELMEPA delegates in DC. She then set the framework of the discussion, with her Research notes. The Greek-owned merchant fleet is 5.520 vessels and represent 21% of the 25,000 high seas commercial carriers worldwide and 52% of the EU fleet. The discussion participants operate 790 ocean-going vessels. Eight shipping companies were publicly listed and their fleets total 685 vessels. The rest represented Small-Medium Enterprises managing 105 ships.

Greek shipowners managed to excel for centuries and serve the global trade, as strong players in a capital intensive and perfectly competitive international arena, being SME family businesses.

Ocean commercial shipping is the cheapest and safest means of transportation of 90% of cargoes globally. Therefore, it needs to be regulated by global rules, set by the United Nations International Maritime Organization (UN IMO). Regional regulations distort fair competition and free trade. It would be to the interest to of the American consumer that Greeks remain competitive against the growing power of China. In Europe, the EU ETS – Emissions Trading Scheme came into effect from 1/1/24, imposing on the maritime trade, mandatory purchase of Carbon Allowances. Shipowners are liable to collect from the charterer, in advance respective Carbon Allowances to cap and trade in a European Carbon Exchange Market (that means that ship managers will need traders to watch volatility and fluctuation of carbon price, hedging risk etc.). There is a penalty of 100€ per carbon ton, not surrendered.

The Green Transition funds collected are shared by 75% to EU Member States and by 25% to an Innovation Fund for Research. ETS funds are collected by Member States and redirected to EU nationals, for reforestation or social aid for energy consumption.

Capt. Panagiotis Angelikas

The General Manager and COO of Springfield Shipping Co. of Panama SA explained how the company, that Onassis founded, deals with the multiple high-risk areas, geopolitical threats (wars) and climate risks (Panama delays) firstly, from the viewpoint of a Captain: Seafarers have to feel safeguarded and be persuaded to join a risky but profitable profession. The daily bureaucratical workload was much less in the past. The industry faces a lack of skilled seafarers, and there’s a need of continuous training, and attention to avoid Fatigue and Human errors. As a General Ship Manager, COO, he said that the specialties mostly needed in shipping are of the seafarers, since the in-house staff number remains limited, due to digitalisation. Seafarers now can connect easily with the office compared to the past. The number of staff ashore of an average shipping company is that of an SME while onboard a VLCC, 20-25 seafarers are still needed. The ESG and EU ETS workload will be added to an already huge bureaucracy and they may hire in house accountants, carbon price traders or outsource them to consultants.

Mr. Panos Zachariades

The Technical Director of Atlantic Bulk Carriers Management Ltd. expressed his technical opinion which is well-respected, as the Union of Greek Shipowners, Greece’s spokesman to UN IMO (since 2004), and a member of several Marine Engineering Societies. He said that the carbon footprint of ocean-going ships on climate change is minute and the sector has voiced serious financial and technical concerns on the Decarbonization proposals approved by the IMO. However, their voice is now muted, since the EU unanimously files to the IMO their own proposals with one vote. The consumers will eventually pay the bill of the European Green Transition. There are not enough alternative fuels available, not even biofuels, so the diesel oil will remain in use. Anyway, there are adverse studies showing that conventional fuels emit less GHG, and have less risks than the proposed ammonia, methanol, and hydrogen. Nuclear power may become the best solution for the future. His company’s number of in-house staff are 75 employees and around 20-25 crew members onboard each vessel, similarly to an average Greek shipping company. Most of the Greek shipping companies are traditional family businesses and (SMEs) Small Medium Enterprises in size. A tsunami of ambitious and strict EU regulations (ETS, EU Taxonomy and FUELEU Maritime) will urge the Greek shipping companies to comply much earlier than the decarbonization deadline of 2027 set by IMO. He admitted that despite their company’s small staff number, they already hired extra in house personnel for the workload of ESG Reporting and EU ETS carbon price trading. Further, he claimed that the shipping sector has not managed to effectively intervene in the consultation of fair environmental regulations at EU and IMO level.

Yanna Pavlopoulou (CommonLawgic)

Although Europe contributes only by 7% to the climate change, it leads a green transition towards an idealized future, disregarding the economic impact on its industrial pillars. European industries constantly move to other continents, due to high energy costs. The medium-term income from the EU carbon credits trading is projected to 22 trillion Euros (Davos, 2023), derived from the power companies, aviation and shipping. With the Paris Convention, the Green Transition funds can now be distributed to developed countries. The EU ETS market fluctuation and volatility, is unpredictable per carbon ton. 2Reforestation projects will become a national source of carbon credits and various countries invest in wide reforestation and biomass PP Partnerships and private subsidized assignments. Further, Shipowners will have to publish Sustainability ESG (Environmental, Social & Governance) Reports under new European standards. Τhe Fit 55 Package ( aiming to reduce emissions by 55% by 2030 and 90% by 2040) and the EU Taxonomy (European banks grant loans based on sustainability checks) will stress the sector. The upcoming implementation of the FUELEU Maritime Regulation (that requires the use of biofuels or the payment of a penalty-tax)3 will lead to extremely alarming projections of a rapid sixfold (6x) increase in transport Decarbonization costs. Main winners of the new landscape: the carbon traders, consultancy and auditing firms. The European framework will adversely affect free trade of the American cargo-owners, as charterers to and from Europe. The liner fleets and the publicly listed shipowners continuously grow in size, so they may be able to comply and negotiate fuel costs, emissions trading, and scrap value. But the hands-on primary wealth produced by Small and Medium-sized Enterprises, will be unfairly controlled and shared with carbon traders, brokers and service providers. Shipowners have to collectively support a proactive initiative to resist the next unfair.

legislative blow to their industry? Shipping serves the consumer internationally (producers, shippers, charterers, and final consumers). The taxation of the 90% of cargo movement internationally, will ultimately burden cargo importers, exporters and consumers. Moreover, the principles of Circular Economy, the Extended Producer’s Responsibility (EPR), Right2Repair (R2R) and Eco-design for Sustainable Products, EU regulations should become internationally respected for the shipping sector. Ship builders and marine equipment manufacturers should undertake the upcycling cost (taking-back to upgrade, repair, reuse, refurbish) of their products. Maritime businesses could build alliances so that universal waste trade regulations are set in time. Otherwise, the upcoming carbon tax burden of recycling will be passed again to the shipowners. Stakeholders of maritime trade must collaborate to set a common ground on the basis of Extended Producer Responsibility (EPR), by holding the manufacturers accountable to upcycle and to reduce untested technologies and the use of valuable resources and raw materials. At the end, the proposed to IMO, GLOBAL Carbon Pricing Mechanism, would favor free international trade, circular economy, free navigation, fair competition and the sustainability of the maritime industry, as well as the long-term consumer protection.