Posted on April 05, 2012

The second World Ports & Trade Summit in Abu Dhabi concluded on Wednesday April 4, highlighting the need to tackle accelerated growth requirements of the industry keeping in mind mounting concerns relating to sustainability. The participants at the Summit were in consensus about achieving a strategic vision for the long-term development of the industry being clearly aware of the effects of climate change and energy requirements.

“While the Summit was a celebration of potential for growth, it is important to look at where such growth would take us.” said Jonathon Porrit, Founder of Forum for the Future and initiator of the Sustainable Shipping Initiative (SSI). Explaining the implications of growth, Porrit pointed out that by 2050, if the emission level standards agreed upon by world leaders are to be achieved, the industry faces the challenge of reducing CO2 produced to 6 gm for each dollar value created in global economy from the current of 768 gm, which is rather unrealistic if prevailing levels of compliance are taken into account. “In such a scenario, the emphasis on low carbon technology is going to be dramatic,” he said.

Considering such critical sustainability challenges ahead, the summit explored Sustainable Shipping Initiative strategies to secure the industry’s future. The SSI brings together leading companies from across the industry and around the world to plan how shipping can contribute to – and thrive in – a sustainable future. Recognising the significant changes lying ahead, SSI members have developed a shared Vision for 2040.

“There are currently 17 partners from a wide range of sectors such as ship owners, charterers and operators, bankers, insurers and NGOs supporting the SSI. In view of the critical role of SSI Vision in global economy, a leadership commitment – with each chief executives signing individually – has been made to ensure its success,” said Porrit. Participants said the current situation is a dilemma of growth before the shipping and port industry. However, the aspirations for 2040 make it imperative for the industry to start acting today, especially considering the massive ecological impact of its activities, they said.

The Summit held much significance for Abu Dhabi this year considering that the first phase of its futuristic Khalifa Port is getting ready in the last quarter. It highlighted Abu Dhabi’s strategic importance in the region in all areas related to marine industry activity. “With the opening of Khalifa Port, Abu Dhabi Ports Company (ADPC), the port’s master developer, will effectively triple its cargo handling capacity for the emirate of Abu Dhabi. It will also be the region’s first semi automated container terminal. The port is being built taking into account sustainable measures, including yard and gate automation to reduce turn around times and to improve efficiency,” said Tony Douglas, CEO, ADPC.

Speakers at the conference highlighted the shift in global energy consumption and exports. Northern America and Europe are reducing refining capacities while it is increasing in the Middle East and Asia. From an LNG importer, the US is becoming an LNG exporter. The Middle East is becoming a possible market for coal. The growth patterns visible in the emerging economies signal massive energy requirements. As a result, the entire infrastructure dynamics is changing across the world. This will have huge implications on the transportation systems as well as the environment strategies in the coming years.

“The world will need 50 per cent more energy in 2030 than it did in 2008. Much of this growth will be non-OECD (Organisation for Economic Co-operation and Development) driven – as much as 80 to 90 per cent. Until 2035, we will still be living in a fossil fuel world,” said Siamak Namazi, General Manager, AGC, UAE. But the interesting trend is that the share of oil is declining. Natural gas is the fastest growing fossil fuel with growth projections  as much as 50 per cent by 2030, primarily because it is abundant, affordable and more environmentally acceptable, said Namazi.

To meet future requirements, vessels are becoming bigger and steamship liners are trying to gain advantage by increasing efficiency and economies of scale and thereby protect the environment. “Vessel size growth will continue to improve. What is considered extreme today is the normal of tomorrow,” said Dr Ing Felix Kasiske, Partner Terminal Development and Design, Hamburg Port & Consultancy, Germany. Speaking on Dry Bulk and Tanker sectors, Tim Power, Director Head of Maritime Advisors, Drewry, UK, said, “As a result of increased focus on fuel efficiency and new regulations for new tonnage, orders may go up further in Dry Bulk and Tanker sectors. There is also possibility that new energy efficient designs may increase the speed of demolition.”

Looking to steer the shipping and ports industry towards a sustainable future, Adel Jebera Al Bufalah, Senior Vice President at ADNATCO-NGSCO, said shipping needs to adopt nuclear fuel in order to create a cleaner  world. “Bigger ships driven by nuclear energy can help eliminate concerns about bunker fuel pollution. Gulf countries could come together linking each other with pipelines and creating mega ports, capable of accommodating bigger ships,” Al Bufalah said. 

The discussions at the Summit made it clear that while every port has a story about sustainability, there are a growing number of emerging challenges, including waste recycling, ballast water processing and the massive emphasis on fuel efficiency. Crumbling infrastructure is another area of concern.

Shipping company representatives lamented that sustainability issues are blamed on them without taking into account factors such as implementation challenges and cost concerns. Considering the lack of a legal framework, operators with scant regard for environment get to keep their costs low and increase profitability while those sticking to sustainability standards lose out on customer support due to higher prices required to maintain such standards, they said.

Considering that shipping supports 90 per cent of world trade, the industry has a huge impact on the future of sustainability of commerce. SSI was launched in 2010 to bring together players from across the industry. The thrust of the initiative is that “radical changes” are needed to make the global shipping industry more energy efficient, environmentally-friendly and sustainable for the long haul. Eminent personalities, including transport and economy ministers from 15 countries and more than 45 ambassadors, took part in the Summit this year. Distinguished speakers included H.E. Sultan Bin Saeed Al Mansoori, UAE Minister of Economy; H.E. Dr Sultan Ahmed Al Jaber, Chairman, Abu Dhabi Ports Company (ADPC); H.E. Jamal Majid Bin Thaniah, Vice Chairman, DP World.

As many as 92 exhibitors and over 4,000 delegates representing ports authorities, shipping lines, cargo operators, logistics companies, technology solutions providers, investors and financiers participated in the three-day event from April 2 to 4. The Summit also saw the presentation of the first WPTS World Ports Award being given to given to Eddy Bruyninckx, CEO of the Port of Antwerp in recognition of the outstanding job he has done in the Port of Antwerp over a period of 20 years, in the fields of business development, port organisation, sustainability and corporate social responsibility.

Major exhibitors at the summit included ADPC, DP World, Qatar Ports, RAK Ports, Bechtel, Hyundai Engineering Construction Company, Konecranes  and Shanghai Zhenhua Heavy Industries.

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