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CEO's Column - NORDEN News Magazine Autumn 2010

Business and climate effort go hand in hand

Recently the Danish Shipowners’ Association had an audience with Connie Hedegaard, the European Commissioner for Climate Action, in Strasbourg. She made it very clear that if IMO (International Maritime Organisation of the UN) cannot agree on shared, global objectives for the CO2 emissions of the shipping industry before the end of 2011, then the European Commission will take action to regulate the industry in its member countries.

And I fully agree. At least to the extent that we, as part of an international industry, representing approx. 3% of total global greenhouse gas emissions (and accounting for 90% of all transport of commodity trade), must assume responsibility, and that we need regulation to push the development forward in the right direction. However, I do not agree that national or regional regulation is the solution. If the climate effort is limited to EU countries, the regulation only involves a minor part of the total global sector, and we risk that the fleet is gradually reflagged to countries not governed by the agreement. In conclusion: non-regulated countries will be winners and regulated countries and the environment will be losers.

My point is not that we should not just sit back and do nothing, until a global solution is found.

In NORDEN, we put a lot of effort (read: time and money) into reducing our fuel consumption and CO2 emission, wherever possible. In addition to our 14-point plan, there are many new initiatives by dedicated NORDEN employees finding new ways to reduce the environmental impact of our ships. The latest initiatives include a new ship propeller and main engine design, potentially reducing fuel consumption by 11% on a specific vessel type, and the use of new turbo charger technology reducing fuel consumption by 3%. Both these examples require investment, which will, however, pay off within 4 years. After this period, savings on fuel and the higher value of the more environmentally friendly vessels are money in the pocket.

Last year our 14-point plan resulted in a reduction of CO2 emissions from our own vessels of approx. 3.3%. This year, our target is a further 3.5% reduction, which we expect to exceed. The target for the entire industry set by the Danish Shipowners’ Association is to reduce the relative CO2 emission by approx. 20% in 2020 compared to 2007 levels.

Hopefully the economic crisis is coming to an end and the shipping industry will be back on an even keel. We need to invest our profit wisely and focus on long-term profitable solutions where earnings and climate considerations go hand in hand.

Reduction of fuel consumption and CO2 emission is good business. Let us not forget that and continue to work for a global solution.

CARSTEN MORTENSEN

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