For most insurers, marine amounts to a miniscule component of their portfolio. However, in terms of implications for sustainability - it is a function of the havoc marine trade wreaks upon our oceans, and the cascading effect. While the externalities tend to remain out of sight, business as usual is no longer an option. Can insurers take it upon themselves as International Union of Marine Insurers (IUMI) and turn the tide, rather than await International Maritime Organisation (IMO) to act? In the meantime, is it important to take a stock of the few triggers, unlike the high-profile oil spills, that tend to stay off the radar and cause grievous harm to our oceans?

71 per cent of the Earth’s surface is water-covered, and the oceans hold about 96.5 per cent of all the Earth’s water. “The Oceans are the primary regulator of the climate and the life support system for the entire planet. Humanity cannot survive without a healthy marine ecosystem”. And the reason why it makes a long list according to Dr. Howard Dryden:

1. Plankton absorb more than 50% of our carbon dioxide.
2. Plankton produce more than 50% of our oxygen, in reality it is probably closer to 95%.
3. "Plankton control surface water evaporation, energy transfer to atmosphere and the strength of the winds."
4. Plankton bodies along with a chemical called DMS, are the primary reason for clouds, rain, and solar reflection.
5. Oceans regulate humidity, which is more than 50% of all greenhouse gas.
6. Marine snow and the abyss are the main carbon bank for the planet.
7. 30% of the world depends upon food from the sea.

Unsustainable blue economy

Imagine 6 million tonnes of plastic enter the oceans every year, and 20 million tonnes of partially combusted carbon enters the oceans every year just from the shipping industry, reminds Dr. Howard Dryden. The carbon contains toxic heavy metals as well as polycyclic aromatic hydrocarbons. The carbon is as toxic as plastic and there is 3 to 4 times more of the stuff.

Ships now scrub their flue gases and dump the waste into the sea. I am not against the shipping industry, but surely there must be a way of filtering the water to prevent this horrific pollution of the oceans. For sure it is going to be expensive, but this is a price we have to pay.

According to the Guardian newspaper, just one of the world's largest container ships can emit about as much pollution as 50 million cars. Further, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world's 760 million cars.

"And if the shipping industry were a country, it would be ranked between Germany and Japan as the sixth-largest contributor to global CO2 emissions."

Most of the pollution occurs far out at sea, out of the sight and minds of consumers - and out of the reach of any government.

"Ships are the polluting 'elephants in the room' nobody is talking about despite a global drive to make oceans cleaner, according to new research."

"Nearly every vessel, from commercial vessels to day-tripper yachts, are continually releasing substantial amounts of toxic metals into the sea, according to the study."

The study, led by Dr. Gordon Watson, of the University of Portsmouth, coincides with the launch of the United Nations Decade of Ocean Science to focus on healthy seas and a 'sustainable blue economy."

Dr. Watson: “It's ironic that highly polluting vessels continue to pollute the seas right under our noses. Toxic metals from shipping, is a hidden threat to healthy seas and nobody's really talking about it."

Alongside educating boat owners on using less toxic anti-fouling paints and anodes, Dr. Watson and colleagues call for urgent legislation to ensure that shipping is front and centre of sustainable ocean policies.

"The researchers calculated that all vessels from a sailing boat to a cruise liner release substantial amounts of metals such as copper, zinc and nickel, which then accumulate in the ocean's sediments."

Copper is used as a biocide in paints to prevent organisms from growing on hulls. These anti-fouling paints are recoated regularly to ensure that the hull remains clean of encrusting barnacles and other marine organisms that slow down boats, making shipping more expensive.

Nearly all boats also have metal blocks attached beneath the waterline. Often called sacrificial anodes, their role is to degrade first, thereby protecting the hull from corrosion and these are often made of zinc.

Finally, increasing numbers of diesel-powered ships have had scrubbers fitted to reduce the emissions of harmful gases to the atmosphere. An unintended consequence of this is the discharge of wastewater with high concentrations of metals such as nickel during the exhaust-gas cleaning process.

The study is published in Environment International.

The worst fuel in the world?

Today, most ships burn bunker fuel. Typically, it’s the dregs left over at the end of the refinery process. It is an environmental nightmare. It is heavy and toxic, doesn’t evaporate, and emits more sulphur than other fuels. It is poisonous to fish and crustaceans and isn’t much good for seabirds – or for humans living near ports.

Many analysts believe that the only way that the industry is going to be weaned off its dirty habit is by the introduction of tough new regulations by the IMO. However, that may be some way off.

The pressure group InfluenceMap recently caused controversy when it accused the shipping lobbying groups of “having unmatched power” over IMO decisions.

“The shipping industry understandably is reluctant to make large investments until regulations that could make the alternative technologies economically viable are on the horizon,” says Smith.

“And there are groups in the shipping industry taking more conservative and less evidence-based positions in the negotiations on reducing emissions than those being taken by many of the countries involved.

“There are also many in the shipping industry who see the inevitability of decarbonisation and are already working on solutions, and they are going to be in a better position when the transition starts.”

“There won’t be any change without regulation,” agrees Dr. Jenifer Baxter, head of energy and the environment at the Institution of Mechanical Engineers. “This due to the simple reason that money talks. Companies fear being driven out of the market if they change their behaviour and others don’t.

“It is the IMO’s responsibility to make sure that shipping has a minimal negative impact on the ocean and atmospheric environment."

Hopes for the future

"Ultimately, they want to do away altogether with the need to burn oil to transport goods overseas." Instead, projects such as the Smart Green Shipping Alliance and the Carbon War Room want ships to be propelled by renewable energy that produces little in the way of CO2 emissions.

The campaigners are in a race against time. They want to persuade the industry to reduce emissions by 50 per cent by 2050. Yet the industry is facing increased demand thanks to population and economic growth that is set to drive emissions from shipping as many as six times higher than they are today.

“To achieve a 50 per cent cut we need to get wind turbines and batteries to store the energy they produce, and alternative fuels like hydrogen or ammonia on to these vessels sooner rather than later,” adds Meehan. “We need to convince ship owners that they need to take a risk on early-stage tech."

“Then we need to look at the trading routes the ship sails on and what fuel is most suitable for which route. The availability of any alternative fuels on that route is also an issue. It has to be a case of the right fuel for the right ship.”

"Electric-powered ships, for example, could be a good option on short hops, though not so much on longer journeys across an ocean or two – at least not for now."

The Smart Green Shipping Alliance’s plan is to launch a 100 per cent renewable-powered ship in five years’ time. This retrofitted ship would be powered by waste-derived liquid biomethane to power off-the-shelf gas engines and future automated sail technology.

The future of cargo ships

“Shipbuilders are not seeing an end to internal combustion engine ships anytime soon. Anything that requires a different fuel or batteries is still a while away.

“Ultimately, nothing is going to change without regulation and that will depend on how much pressure is put on the industry."

“Consumers need to start asking about the shipping policies of the companies whose products they are buying.”"

Just like other industries, the shipping industry also has several detrimental effects on the environment. Being associated with water, most of these effects cause damage to marine flora and fauna and that indirectly affects humans. The shipping industry also contributes significantly to air pollution. Some of the adverse effects of this industry on the environment such as sound pollution; oil spillage; sewage; loss of marine life and emission of greenhouse gases are well known.

"By the end of 2022, the container-shipping industry will have earned a staggering half a trillion dollars of operating profit from two years of supply-chain misery, estimates research firm and consultancy Drewry."

"Just eight companies control 80% of the world’s container shipping capacity, and they’re organized into three major alliances." More than four-fifths of the international trade in goods is carried by sea, so this high-level concentration - made possible by the sweeping antitrust exemptions they enjoy - confers immense power.

The uncontainable nature of modern life

Mark Levinson is best known for “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.” It also has had an unintended consequence - having made global trade fragile. Storms and high winds, long the chief culprit in container loss, are growing both more frequent and more intense as the climate becomes more volatile. Another is the trend toward ever-larger container ships, which has compromised the steering of the vessel and the security of the containers (in both cases because the high stacks on deck catch the wind), while simultaneously rendering those ships vulnerable to parametric rolling, a rare phenomenon that places extreme stress on the containers and the systems meant to secure them.

Whose job is it to clean up shipping?

Like aviation, shipping isn’t covered by the Paris Agreement on climate change because of the international nature of the industry. The Paris deal aims to limit the global temperature rise to below 2°C this century by reducing emissions. "Instead, it is the job of the International Maritime Organisation (IMO) to negotiate a reduction in emissions from the industry." Environmentalists blame the organisation for the industry’s slow response.

“International shipping produces nearly one billion tons of CO2 emissions, which is approximately 2 to 3 per cent of total man-made emissions,” says Tristan Smith of UCL Energy Institute and leader of the UCL Energy Shipping Group. “This needs to reduce rapidly if we are to avoid the risks of dangerous climate change – at least halving in magnitude between now and 2050.”

“Reducing emissions from shipping is not an easy thing to do,” agrees Maurice Meehan, director of global shipping operations with the Carbon War Room, an international think-tank working on market-based solutions to climate change.

“The industry will say that they are doing a good job building more efficient vessels and retrofitting older ships. However, efficiency is only up because these ships are carrying more cargo. The biggest ships are emitting more because they are speeding up.

However, even “If we become carbon neutral tomorrow, atmospheric carbon dioxide will still pass 500ppm, and oceanic pH will drop below 7.95 and all carbonate base life including coral reefs will dissolve within 25 years.

We could survive climate change, we will not survive the loss of marine life and the Ocean Drifters upon which Life on Earth depends.’’ Further warns Dr. Howard Dryden.

In conclusion

“Bilateral agreements will be needed between the EU and non-EU recycling countries to agree on how best to address the glut of recycling supply with yard space operating in a sustainable and environmentally-sensitive manner”, believes Jonathan Humm, Class Underwriter for Hull and War at AEGIS London.

“About 20% of fish were caught illegally according to Oceana, an organization dedicated to the protection of our oceans. IUU (Illegal, unreported, unregulated) fishing had a devastating impact on Marine ecosystems. According to Humm, the ESG group intended to work with Maritime stakeholders to use available insurance levers to help subvert this practice. the IMO’s target to halve greenhouse gas (GHG) emissions by 2050 was looking increasingly difficult to achieve without urgent action. ESG performance had become an integral part of the insurance value-chain which insurers ignore at their own peril, the responsibility to find solutions to sustainability challenges lay beyond the traditional underwriting model”.

"Every day the clothes, tech and toys that fill the shelves in our shopping centres seem to arrive there by magic." In fact, about nine out of 10 items are shipped halfway around the world on board some of the biggest and dirtiest machines on the planet.

Can the IMO live up to the responsibility vested on it or will it succumb to the alleged corporate capture? Will marine insurers demonstrate leadership when general insurers and reinsurers are struggling making up their mind? Asia is where action is converging. A notch higher than Europe in terms of fleet ownership, topmost ports turnover wise, most biodiversity hotspots - the gravity and urgency necessitate getting the act right. Can Poseidon Principles navigate the insurance industry and all of us out of the dire strait?

Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.