A New Vision for Cyprus Shipping

Interview with Vassilios Demetriades

Shipping is the lifeblood of international trade. However, the COVID-19 pandemic, constant calls for a greener maritime industry and the latest IMO targets, sent shockwaves through global maritime transport and laid the foundations for a major transformation of the industry. Vassilios Demetriades, Deputy Minister of Shipping, talks about the new national maritime strategy he wishes to implement and the role of Cyprus in the global battle against climate change.

By Marianna Nicolaou | Photo by TASPHO

International efforts to tackle climate change have put pressure on industry chiefs, and now a goal has been set to halve carbon emissions by 2050. But targets and plans are one thing, execution another. How realistic is this goal? What is Cyprus’ approach towards this aim and what kind of action will be taken?

Indeed, the IMO’s initial strategy set the goal of reducing total annual GHG emissions by at least 50% by 2050, compared to 2008, while remaining committed to reducing GHG emissions from international shipping and, as a matter of urgency, to phasing them out as soon as possible this century. In accordance with EU commitments, Cyprus is obliged to meet the goal to become climate-neutral by 2050 – achieving net zero GHG emissions collectively. The law aims to ensure that all EU policies contribute to this goal and that all sectors of the economy and society play their part, while principles of fairness and solidarity are applied. It also sets out a binding target of 55% reduction of emissions by 2030. It should be also noted that IMO member States will proceed with the adoption of a revised IMO strategy on the reduction of GHG. Cyprus is closely following all the developments at EU and global level, aiming to ensure that the shipping sector contributes its fair share to tackling climate change whilst maintaining its strategic role. The targets mentioned are ambitious but achievable. There is no silver bullet. A basket of measures should be thoroughly examined (regulatory and non-regulatory, aiming to improve energy efficiency and/or promote the uptake of alternative fuels). Cyprus recognizes that the path towards decarbonising the sector will be challenging and difficult. Therefore, we have recently introduced Green Tax Incentives to incentivize and reward Cyprus-flagged and EU-flagged ships that demonstrate meaningful reductions of emissions. Furthermore, as part of our long-term strategy which will be presented in October, we will undertake initiatives to increase the environmental sustainability of the sector. As climate change knows no borders, and considering the international nature of shipping, IMO seems to be the appropriate body to regulate the reduction of GHG emissions from ships. Cyprus has expressed its readiness to work constructively within the EU for a legislative framework that is scalable and compatible with what IMO will introduce in the future.

We are experiencing an unprecedented amount of government support, but support packages for the economy will eventually come to an end, unemployment and sentiment are extremely high and could go higher. What is the threat to seaborne volumes from these economic knock-on effects?

International trade suffers from delays because of the pandemic and, in some segments, from higher prices. We expect that the return of the global economy as a whole to normal will have a similar beneficial effect on seaborne trade.

The disruption to the global container supply chain after the outbreak of COVID19 was extreme. Do you see permanent changes for the supply chains as a result of this experience?

In the long term, international trade is expected to return to normal conditions and be characterized by growth. In the short term, we may witness changes, possibly in the form of building reserve capacity as an adjustment to problems faced during the pandemic.

Instability in the Middle East, the trade war between the USA and China, the rise of extremists in countries such as Nigeria and the emergence of new maritime centres such us Singapore are all major geopolitical changes affecting the shipping sector. How can it evolve in order to overcome such challenges?

Geopolitical changes and local or regional unrest have been faced by the shipping industry in the past and the industry has coped well while serving international trade. Nowadays, regulatory challenges regarding green and digital transformation are being added to the list of challenges and forcing the shipping industry to apply basic investment principles and decide when it is economically prudent to invest in research and innovation on ‘green ships’ and ‘green fuel’.

According to the latest Seafarers Happiness Index report, published by The Mission to Seafarers, the results showed that the ongoing issues relating to crew travel, uncertainty over leave and an almost complete and universal ban on shore leave are having a negative impact on seafarers. Even areas that usually hold up well, such as interactions on board were struggling, and the responses received painted a picture of stress, fatigue and frustration. How do you plan to tackle these issues effectively?

In the initial stages of the pandemic, Cyprus made a deliberate strategic choice to invest in the welfare of crews as a measure to mitigate the negative impact of COVID-19 on the shipping industry and international trade. At the same time, Cyprus has been vocal at EU, ILO and IMO level, tabling suggestions and leading by example. As a result, Cyprus was amongst the first to recognize seafarers as key or essential workers and went on to formulate and implement a framework for (a) crew changes, in Cyprus, irrespective of the nationality or vaccination status of the seafarers and irrespective of the flag of the ship involved and (b) vaccination of seafarers on board Cyprus-flagged ships or ships managed from Cyprus.

According to the Safety & Shipping Review 2021 published by Allianz, the number of fires on board large vessels has increased significantly in recent years. Losses of containers at sea also spiked last year (over 3,000) and have continued at a high level in 2021, disrupting supply chains and posing a potential pollution and navigation risk. How can technology assist and provide innovative tools in order to minimize human error and workplace accidents?

Technology in the form of onboard sensors combined with weather forecast information and analysis ashore, together with keeping crews informed and aware through virtual training, can go a long way towards containing problems of this nature. That said, it is imperative to take care of other potential issues along the supply chain, such as non/mis-declaration of hazardous cargo (which is improperly packaged and stowed on board) as well as onboard firefighting capabilities.

What can you tell us about the national maritime strategy you wish to implement? What are the pillars of this project and what are its sociopolitical effects expected to be?

The long-term strategy for Cyprus shipping will set the vision for the sector; creating a continuous, interactive and systematic approach to fulfil it. The strategic vision comprises three pillars: Sustainability-Extroversion-Adaptability setting the framework, through 35 concrete sustainable actions, that will enable us to constantly consult, effectively react and proactively adapt to ensure a sustainable future for Cyprus shipping.