Stakeholder Management is an increasingly important topic in project management. In the 5th Edition PMBOK® Guide, it was given its own Knowledge Area, born mostly from the Communications Knowledge Area. After PMI’s Role Delineation Studies, Stakeholder Management got even more priority and attention.
When a new project is launched, we carefully identify stakeholders – broadly and deeply. We could think of releasing new regulations meant to reduce the impact on the environment - as projects, and for that, we also think about stakeholder management.
In this post, I’ll discuss some new regulations meant to reduce the impact of shipping on the environment. In this, obviously, shipping companies are stakeholders. And so is human health and the environment. Although the shipping industry accounts for only 2% of global carbon emissions, the emissions that the shipping industry does contribute is very dangerous because it uses ‘heavy’ fuel oil. Remember: CO2 is not the only culprit to cause climate change and otherwise damage our environment. The shipping industry also produces 13% of the world’s sulphur emissions – which are responsible for air pollution and acid rain - and 15% of nitrogen oxides, according to a June 23, 2018 article in The Economist.
The International Maritme Organization (IMO) of the UN, has recently issued regulations that force shippers to install equipment by the year 2024 to clean dirty ballast water. Seems like a good idea, but it’s not cheap. This will cost the shipping industry about $50B. Also recently, the IMO has cut the allowed carbon emissions 50% from 2008 levels. Sulphur regulations may be the toughest – the new rules from the IMO cut allowable sulphur content from 3.5% to 0.5% by 2020. Switching to low-sulphur fuels could cost the industry US$60B.
If you think the reductions are expensive, they are. However, without them, according to a recent study by the government of Finland shows that without these cuts there could be 570,000 deaths from air pollution worldwide after 2020. If one values human life, the price does not seem so high after all.
A recent study by Nature magazine (see table below) also shows hundreds of thousands of saved lives and reduced occurrences (3.6% drop) of childhood asthma if the low-sulphur fuels are used. The article has almost 100 scientific and academic references.
You can watch a brief video about the impact of the shipping industry here:
From the shipping industry’s perspective, there are two ways to look at it. The first is to give up the ship (so to speak). Junichiro Ikeda, the head of Mitsui OSK Lines, is quoted in this Economist article as saying, “we’re all going to go bust”. The other way to look at its to realize that you are indeed part of a problem and seek to be leaders in solving that problem. Shipowners will have to switch to the lower-polluting fuels, will have to invest in projects to add scrubbers to their ships, and need to consider switching their power systems altogether to liquefied natural gas (LNG) or other alternatives.
For project managers, all of these initiatives, mandated (or at least triggered by) the regulations from the IMO, are an opportunity. Scads of projects will be launched to retrofit older ships. And many ships will be retired and scrapped, meaning that new, more environmentally-friendly ships will also be launched. Perhaps you will be shipping off to one of these projects yourself one day soon!
Perhaps this is another opportunity for Mr. Musk & Tesla...
I wonder what opportunities would exist for an electric shipping vessel with a solar powered battery charger?
Kiron
Damian PereraMonitoring & Evaluation Specialist| ChrysalisMellawagedara, Western Province, Sri Lanka
Eco-friendly ships are slowly revolutionizing the shipping industry. IMO regulations are a welcoming gesture to minimize air pollution caused by shipping industry.
Indeed, regulations are fast changing and requiring low carbon fuels such as advanced biofuels which should be considered as an alternative and sustainable fuel.
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