Interview with Mr. George Procopiou

 

TELLING IT LIKE IT IS

GM International Conferences & Exhibitions Ltd asks Mr. George Procopiou’s opinion on the IMO’s anti-pollution measures before attending next week’s Malta Maritime Summit

  

Environmental concerns and profit-making rarely make good bedfellows.

Yet fingers should not be automatically pointed at businessmen. For civilization includes a never-ending narrative of relishing creature comforts without giving a second thought to harming the planet’s originally fine-tuned ecosystems. Nevertheless, a ‘greener’ mindset as well as the brutal realities of climate change over the past few decades have narrowed the gap between environmental and commercial interests – to the extent that an environmental conscience boosts many an industry’s image while still raking in the profits.

The notoriously polluting maritime industry is also wising up. The IMO’S decision to implement a 0.5% Sulphur cap on marine fuel from 2020 ostensibly marks a defining moment in the maritime industry which can no longer be indifferent or sluggish in utilizing cleaner fuel options.  Furthermore, the EU’s Vision of Zero Emissions from transport by 2050 continues to pile on the pressure on shipbuilders, shipowners and energy providers worldwide to comply.

The 0.5% Sulphur cap demands a shift from burning cheap but highly toxic Heavy Fuel Oil (HFO) to cleaner alternatives such as liquified natural gas (LNG) and marine gas oil (MGO). The IMO also favours the installation of scrubbers to enable vessels ‘clean’ VFO on board. LNG necessitates complex and expensive engine modifications – never economically viable in the short term. Worse still, LNG is not as green as it has been touted to be. In fact, researchers at Cornell University argue that the hydraulically fracturing method of extracting natural gas from shale deposits is 20% more polluting than coal primarily because of its methane leakage.

By contrast, switching to MGO involves minimal capital outlay, though higher bunkering costs. But problems of demand and supply especially as regard MGO are also a reality. A BIMCO backed study in fact argues that the IMO 2020 deadline will spike the cost of MGO because of a supply deficit. In fact, price escalation is already being felt across several industries and derailing growth in developing economies. As a result, the 2020 target date is raising hackles.

The bigger upset, however, lies in how the IMO’s decisions are not as eco-friendly as they appear to be and point to the tentacles of vested interests. George Procopiou, Founder of Dynacom Tankers, Sea Traders and Dynagas does not mince his words as he shares his thoughts about IMO’s logic or, rather lack of it.

 

Pollution was high on the Posidonia agenda three months ago. What was discussed is likely to resurface at next week’s Malta Maritime Summit. What would you like to reiterate?

 Some of the pollution-related points highlighted during Posidonia 2018 were the following:

  1. Shifting pollution from the air to the sea, does not make sense. The aim should be for the pollution not to be caused in the first place.
  2. The capacity of scrubber makers falls very short of being able to meet the deadlines set.
  3. The driver is not responsible for fixing his engine
  4. It is the refineries’ obligation to produce fuels that comply with regulations’ standards.
  5. The surest way to discredit an authority is for the authority itself to issue guidelines that cannot be implemented.
  6. The ones that truly care about the environment propose realistic solutions that can be immediately implemented; or even other solutions but within an appropriate time frame that allows engine makers and shipyards to meet the set targets.

Aside from the two measures adopted by the IMO namely, burning Low Sulphur Fuel Oil or installing scrubbers (which I strongly disagree with) I proposed a third more realistic option – slow steaming of HFO. Despite the need of more tonnage, adopting slow steaming at 10 knots, reduces emissions of SOx, NOx, particles, and CO2 by 60% of current levels. This result is tangible right from the first day of the implementation of slow steaming and without creating any further pollution or increasing the incremental carbon footprint for the manufacturing of useless equipment.

 

What changes and/or innovations in the race for cleaner fuel have impressed you most, particularly during the past three months?

None. There’s no race. Nothing has happened. After 1st January 2020, there is about a 5-year period to allow all oil refineries to modernize their plants by the end of which the price of 0.5% Sulphur fuel will have stabilized at a reasonable level. Yet most of them have not even begun to invest in any desulphurization processes.

 

Stakeholders prefer a ‘phased’ approach to comply gradually rather than a more drastic hardline stance. What advice would you give to companies who have not yet invested in LNG, MGO or other cleaner fuel options?

 Of course. These are measures that are to be taken gradually to give the appropriate time to the engine manufacturers and shipyards to come up with solutions that can meet the set standards. Conversion to LNG as a fuel for existing engines is just not doable. Scrubbers are an utterly no-go alternative.  To begin with, they are bulky, heavy (an average one weighs over 200 tonnes) and complicated to install, especially to retrofit. Furthermore, most of them are ‘open loop’ meaning that the sulphur ends up in the sea instead of in the atmosphere. They are also fuel guzzlers and emit substantial exhaust gas emissions which is why I am so much against them.

On the other hand, slow steaming is the way forward for both practical and environmental reasons until low sulphur fuel is widely supplied.

 

While cleaner fuel compliance is bound to burn deeper holes in the pockets of key stakeholders, there are also great opportunities for a synergy between shipbuilders, shipowners and energy providers. What do you think are the most exciting prospects?

 It is not a matter of burning deeper holes in the pockets of stakeholders as for example, LNG is a much cheaper fuel. It is today’s insufficient implementation time frame that renders it impossible.

 

Some (and not necessarily cynics) may argue that environmental restrictions will ultimately lead to an even more oligarchic shipbuilding and ship owning industry because ‘going green’ in the maritime industry is costly. Do you think that this is true? 

 Cost is irrelevant. The building of a new vessel is more efficient and more environmentally friendly than the previous one. Shipowners and ship yards are cooperating in continuously raising the standards and implementing the latest technology available.

 

The rallying call for a cleaner environment has had other key figures in the maritime industry like John Gauci-Maistre advocating the implementation of ‘blue flag’ marinas in Malta. What does George Procopiou, owner of about a hundred ocean crossing mercantile vessels and owner of the super luxurious yacht ‘Dream’ opine about this idea?

Implementing ‘blue flag’ marinas and ‘blue flag’ ports is an excellent idea. It’s a concept that has already been widely implemented around the world – admittedly, with great success and improvement every year. It refers to the improvement and prevention of all potentially polluting activities with a focus on truly environmentally friendly solutions.