IMPENDING ratings of shipping greenhouse gas emissions and efficiency have implications for Western Australia in delivering grains to international customers, a grain industry forum was told last week.
CBH Group's marketing and trading division head of chartering Pia van Wyngaard told the Grain Industry Western Australia (GIWA) annual forum that while there were enough ships to deliver Australian grain exports, arranging shipping into the future could become more complex with costs and delivery speeds uncertain.
Ms van Wyngaard explained shipping lines and ship owners had prior notice of two emissions and efficiency indexes that "will come into play next year" for international shipping.
A carbon intensity indicator (CII) will be a measure of how efficiently a ship transports goods or passengers, expressed in grams of carbon dioxide emitted per cargo-carrying capacity and nautical mile.
The United Nations' International Maritime Organisation also implemented a energy efficient existing ship index (EEXI) to try to reduce ships' greenhouse gas emissions.
EEXI is a measure related to the technical design of a ship and the deadline for attaining EEXI approval is by the first periodical survey in 2023.
But a lot of uncertainty remained about these measures and possible future regulations related to ship emissions and new propulsion technologies required to meet future low emissions regulations, Ms van Wyngaard said.
"Communication has not been very good and the pathway (required to meet emissions requirements over a 30-year life of a modern ship) is not very clear," she said.
In answer to a question from Farm Weekly, Ms van Wyngaard said CBH's marketing and trading division was aware some ship owners had deferred ordering new, more efficient ships because of this lack of clarity on likely future regulation.
"They (ship owners) are waiting for clarity," she said.
"It costs many millions of dollars and takes 18 months to two years to build a new ship, so no one wants to get it wrong.
"A lot of work needs to be done and a lot of money spent to get the maritime industry up to scratch in regards to emissions."
Rising global interest rates and inflation also did not encourage investment decisions, she said.
Other responses by shipping lines to an emissions spotlight turned onto their industry, she said, was greater use of low-carbon fuels, which cost more, and "slow steaming", to use less fuel and produce fewer emissions, but also costs more because routes takes longer to complete.
Of new, more efficient ships that are being built, there is a trend towards larger vessels for both container and bulk cargoes, Ms van Wyngaard said.
"Ship owners make their money on the tonnes of freight they carry - the more tonnage, the more money they make, so ships are getting bigger," she said.
This has implications for CBH in two of its port zones because there are draft restrictions at Albany and Geraldton ports.
"It is not possible to order a large Panamax and load as much grain as we can at those ports and that is not going to change soon," Ms van Wyngaard said.
"For CBH, at Albany and Geraldton ports we do encounter some difficulties."
Because of the trend towards bigger ships - and bigger wheat and barley cargoes - over time, smaller ships that can service ports such as Albany and Geraldton with size restrictions, are likely to become increasingly less available, she said.
There is also a shortage of tug boats at Kwinana port and larger vessels require more tugs to help them berth and to leave a berth, Ms van Wyngaard pointed out.
While having many customers in Asia and South East Asia gave CBH a "freight advantage" over international competitors, some Australian maritime regulations, particularly relating to hull biofouling management and to hold cleaning which apply to visiting ships, are tighter than in other countries and have the opposite effect, she said.
"Speaking to the ship owners, especially the Japanese, they are quite reluctant in supporting our business due to those strict regulations and the high penalties that come with them," she said.
She and other speakers at the forum, Australian Export Grains Innovation Centre chief economist Ross Kingwell, Grains Australia general manager trade and market access John Ackerman and CSIRO agriculture and food director Michael Robertson, agreed the war between Ukraine and Russia had threatened food security in North and East Africa and parts of the Middle East.
This was particularly so in Sudan, Ethiopia and Somalia, which relied on Black Sea grain and where low-cost alternatives were difficult to source, the forum was told.
