On January 1st, 2020, a new regulation, IMO 2020, will come into force to limit the amount of sulphur emitted globally by the shipping industry. Marine Underwriter Pauline des Vallières and Senior Onshore Energy Underwriter Jean-Christophe Candelon take us through the impacts of this major clean-up for shipping, refineries and the (re)insurance industry
84% percent of global consumer goods are transported by sea. Today, shipping is not only the most widely used means of transport in the world, but also the most efficient per ton shipped – and the one that pollutes the least. That being said, given the fact that 12 billion tons of goods were transported by sea in 2018 alone, the emissions of cargo ships must be taken into consideration. In fact, according to a number of sources, the shipping industry is one of the largest emitters of sulphur in the world, accounting for 5% to 10% of global sulphur pollution.
As this technical newsletter explains, IMO 2020 is more than just another regulation. It is one of the biggest revolutions the shipping industry has encountered since the double hull regulation in 1992, and it will imply a structural change to the sector. Like every perfect storm, its consequences will spill over into other industries: in this instance refining and insurance. Insurers will need to help insureds to face this spillover and the new risks it brings.
SCOR views this storm as an opportunity to re-build a cleaner industry. It is a major milestone for the shipping industry, and one with which SCOR is particularly proud to support its clients, who are increasingly committed to Corporate Social Responsibility and improving their environmental footprint.
With more than 40 years of experience in the underwriting of large corporate risks, SCOR will ride out this perfect storm alongside its clients, using technical understanding and tailor-made solutions.
|PAULINE des VALLIERES
Senior Onshore Energy Underwriter