Low carbon need not equate to high cost

DK Group, a marine carbon emissions specialist company, has asked for clarity in the debate on the true costs of CO2 reduction.

The company believes that the continued focus on the initial investment that is required without balancing it against the medium to long-term economic benefits is serving to paralyse progress and distort opinion. Any reduction in CO2 levels directly correlates with a reduction in fuel consumption, where a 20% cap on CO2, would at today?s prices, save the industry over $28 billion in fuel costs every year.

The comments come on the back of the recent statement from IMO Secretary-General Efthimios E. Mitropoulos, who expressed serious concerns over the high costs involved to implement CO2 saving measures on shipping during the International Chamber of Shipping (ICS) conference in London in September 2009.

J?rgen Clausen, COO, DK Group said: “The reality is that in reducing CO2 from fossil fuel, fuel consumption is also automatically reduced, with significant financial benefits. It is entirely illogical not to consider this when debating the overall impact of CO2 reduction.”

Clausen continues: “According to the IMO?s latest reports, shipping burns 330 million tonnes of fuel a year and emits 1,046 billion tonnes of CO2. If a 20% CO2 reduction cap is imposed on shipping at the upcoming UNFCCC conference in Copenhagen, while the initial investment that is required to achieve this will be significant, so will the knock-on benefits. A reduction of 20% in fuel consumption equates to 66 million tones, which at today?s prices for heavy fuel oil ($425 per tonne), works out at $28 billion worth of savings every year in fuel costs. And that is a conservative estimate based on predictions that fuel prices will continue to increase.”

The IMO report also claims that efficiency gains that can be attained through the implementation of a variety of innovative technology and market-based solutions could reach as high as 70%. The majority of return on investment scenarios also shows pay back within 3-5 years, and will be even shorter depending on future direct or indirect CO2 taxation.

J?rgen Clausen concluded: “Ultimately, the IMO?s and the shipping industry?s real fear is that it will have to stump up the bill for all the required investment, when in reality, the costs will be paid for by the end consumer. The structure of this ?tax? is the real debate that should be happening between the industry and the legislative and regulatory bodies. And simply focusing on costs without highlighting the financial benefits is only a flimsy excuse for procrastination.”