Cyprus: Sulphur cap, trade, regional crisis main concerns for shipping

cyprus ship-and-flag

The Cyprus shipping sector, accounting for about 7% of GDP output with annual earnings of more than EUR 1 bln, is just as concerned with world trade developments and new sulphur emission controls as any other maritime cluster, head of the shipowners said.

The difference is that the island’s shipping community also has to deal with the ongoing Turkish embargo, as well as Ankara’s show of strength in the eastern Mediterranean.

The Cyprus Shipping Chamber, one of the world’s leading shipping bodies celebrating three decades of existence.

Outgoing president Themis Papadopoulos told the AGM: “The greatest challenge that Cyprus shipping faces today continues to be the Turkish embargo, a situation that we strongly believe works against the interests of everybody, including Turkey, and discourages open regional trade at a time when our region is beset by geopolitical uncertainties.”

Papadopoulos added: “Trade has always been and will continue to be the best bridge to bring peoples and countries closer together in a spirit of mutual co-operation and understanding.”

His concerns were echoed by President Nicos Anastasiades, who praised the shipping sector that “has been for many years one of the leading sectors of the Cyprus economy and has been catalytic towards its steady recovery and growth.”

Referring to the Turkish embargo and illegal activities within the Cyprus exclusive economic zone (EEZ), House President Demetris Syllouris said parliament “spares no effort in ensuring the respect of our country’s sovereign rights, by utilising every tool at its disposal in the context of various demarches and initiatives”.

“The House is mindful of the challenges that Cyprus and global shipping industry is currently facing. Flattening demand growth, industry consolidation forcing freight rates down, fuel emissions regulations, cybersecurity, digitalisation, and e-commerce are only some of them.”

Syllouris said parliament will “continue to work in synergy to actively support the shipping sector in its mission, which will help create, through reforms, an even more attractive legal and business framework that will enhance the competitiveness of our maritime cluster.”

Praise for the Cyprus shipping industry, and the Chamber, in particular, came from two leading figures in international shipping, who said that the CSC is a model example for shipowners’ associations.

International Chamber of Shipping Chairman, Esben Poulsson and the European Community Shipowners’ Associations Vice-President, Claes Berglund, noted the CSC’s excellent cooperation and contribution to making important decisions on policy issues.

CSC President Papadopoulos noted that global shipping faces “a crucial crossroad” with regards to its future in view of the global shift away from fossil fuels and the pressure of drastic improvements in carbon emissions from the IMO.

He said the Chamber’s long-standing and active participation in both the ICS and ECSA have become more important than ever, as “we seek to ensure that the Cyprus shipping industry’s voice is clearly heard at all decision-making levels”.

“The work of the ICS has become more important than ever, as shipping is faced with unprecedented demands and is expected to play its part in the global push for decarbonisation.

I believe it is not an exaggeration to say that the agenda that will be set down over the next few years will create shipping’s realities for the foreseeable future…the Chamber will continue to be an active and vocal participant in the discussions going forward,” Papadopoulos said.

As regards the CSC’s long relationship with ECS, Papadopoulos said that “only through close European alignment and co-operation will we be able to maintain Europe’s leading position in global shipping matters and to succeed in the continuous battle to achieve international, rather than regional regulations and a level playing field.”

Despite improvements in the Cyprus economy, the CSC president said that “unfortunately the picture is not so rosy on the international stage where threats of trade wars, tariffs and sanctions have created considerable uncertainty and are negatively affecting global trade”.

“It is our sincere hope that common sense will prevail and that protectionist trade policies will not become the new norm. It is clear to us that there are no winners in such disputes,” he said, in relation to the US-China trade and tariffs standoff.

Home Front

On the home front, Papadopoulos said that in a little over a year since its existence, the Deputy Ministry for Shipping “has already breathed new life into all shipping related matters and has actively promoted both the Cyprus flag and the resident industry worldwide”.

“The Department of Merchant Shipping has been seamlessly absorbed into the Deputy Ministry and improvements have already become visible.”

He said the CSC is working very closely with the Deputy Ministry on the renewal of Cyprus’ tonnage tax system.

“We are closely following developments…We have every reason to believe that the renewal will be successful, and we will keep members continuously updated as talks progress.”

In view of the new EU Commission to be formed in November this year, the Chamber is advocating for an upgrade of the EU Maritime Administration (currently DG MOVE).

“We believe that the creation of a ‘Shipping Commissioner’ will contribute enormously to the further promotion of shipping matters within Europe and further promote Europe’s global standing in an industry where we face challenges from countries and regions that do not have many of the constraints under which we operate in Europe.”

Papadopoulos said that the global push away from fossil fuels and attempts to decarbonise the global economy, as reflected in the Paris Agreements of 2016, will not bypass shipping.

“While shipping is by far the most effective mode of global transportation for trade, it appears inevitable that as an industry we too will have to contribute to this effort.”

“While some of the short-term measures are expected to be able to be met through operational improvements and efficiencies, the longer-term targets appear unattainable in view of current technologies available to us.”

“There is a tendency in shipping to move slowly and cautiously hoping perhaps that the storm will blow over, yet I fear that if we do nothing and simply hope for the best, the cost and impact to shipping will be by far worse further down the road.

It is vital that we as an industry take the lead on this matter but equally vital that we include and involve all stakeholders at an early stage to create common ownership of the problem and to establish a fairer way of sharing the considerable costs likely to be involved,” Papadopoulos added.

In January 2020, the Low Sulphur Fuel Regulation comes into effect and at the last IMO MEPC meeting held recently in London, member states agreed on the final guidelines.

“With just over six months to go, I urge anybody who has not yet started preparing for this to do so without delay. We genuinely hope that there will be a reasonably smooth transition and encourage all members to report as soon as possible any problems encountered.”

On stepping down from the CSC leadership, the outgoing president said, “we commit to continue being the voice that unites all shipping interests on the island…The CSC ranks today amongst the largest shipping associations in the world and we are proud to represent our members worldwide.”

Between October 6-9, Cyprus will organise its biennial Maritime Cyprus Conference which continues to grow in popularity and attendance.

“We look forward to another successful conference where the crucial issues that face shipping at this time will be addressed and hopefully some interesting insights will emerge,” Papadopoulos said.

Source: Financial Mirror

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