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Mr Kitack Lim, Secretary-General of the International Maritime Organization (IMO),
Excellencies, Ministers, Ambassadors, and Members of the Diplomatic Corps,
Distinguished Guests,
1. Good afternoon, and welcome to the 17th edition of the Singapore Maritime Week (SMW).
Eventful Times for the Maritime Sector
2. These are eventful times for the maritime sector. We had barely begun to emerge from the COVID-19 pandemic when the conflict in Ukraine erupted. It disrupted shipping and supply chains, caused a surge in tanker demand, and affected the lives of many seafarers.
3. In early 2022, shipping freight rates soared to levels several times above the pre-pandemic average. Shipping lines closed their books with record profits. Since then, freight rates have generally fallen by more than 80%, returning to pre-pandemic levels.
4. January 2023 also marked a turning point in consolidation trends in the container shipping sector. After more than seven years, Maersk and MSC announced the discontinuation of the 2M Alliance after it expires in 2025. This may have far-reaching implications for the structure of the shipping industry.
5. Looking ahead, we in the maritime sector must gird ourselves for uncertainties in the near term. Globally, the tightening of monetary policy is dampening economic growth. The International Monetary Fund projects global growth to slow from 3.4% in 2022 to 2.9% in 2023. The prospects diverge across regions. Growth in the US and the Euro area is expected to slow; India’s outlook remains robust; and China is expected to recover.
6. Geopolitical strains are also driving moves in manufacturing and supply chain strategies. Concerns over US-China decoupling are causing major shifts in trade and investment flows, and potential bifurcation of supply chains. This will pose a grave test for the maritime sector’s resilience and adaptability.
7. While we manage these proximate challenges, we must not lose sight of our longer-term imperatives: to build a safer, more efficient, and sustainable maritime sector. As the most cost-efficient mode of transportation, shipping will continue to underpin, and grow with, international trade flows. We must therefore leverage this to achieve our longer-term goals for the maritime industry.
8. This year, the theme for SMW is “Ambition Meets Action”. In other words, our aspirations for the sector must be met with decisive action. Hence, we must launch practical solutions to achieve our shared ambitions in three focus areas: decarbonisation, digitalisation, and maritime talent.
Decarbonisation
9. Decarbonisation heralds a profound change for the maritime industry. The entire value chain, from manufacturers, to the shippers, to the end consumer, must be persuaded of the value of going green, must be prepared to bear the cost, and be prepared to act quickly. The process may span several decades, but the work must start now.
10. There are signs of growing momentum, which is encouraging. For example, in the second half of 2022, nearly half of all containership orders were for methanol-capable vessels, and the first such ship was launched earlier this month. Shell Singapore and Penguin International recently launched the first fully electric ferry service.
11. In Singapore, the Maritime and Port Authority of Singapore’s (MPA) inaugural Maritime Census 2022 found that maritime firms in Singapore expected to triple their investments in decarbonisation in 2022 – amounting to S$1.4 billion. 140,000 tonnes of marine biofuel blends were sold to vessels in 2022, far surpassing LNG bunker sales, and a higher take-up is expected this year. Later this year, we will conclude the Expression of Interest for ammonia bunkering and power generation, and conduct our first methanol bunkering pilot.
12. At the global level, the IMO is a key catalyst for maritime decarbonisation, and Singapore has been a steadfast supporter of its efforts. In this regard, I want to acknowledge, and am very glad, that in December 2022, a Singaporean, Mr Tan Hanqiang, was appointed the Vice-Chair of the IMO Marine Environment Protection Committee.
13. The IMO is now working towards the adoption of a Revised Greenhouse Gas (GHG) Strategy. Singapore supports a significant strengthening of the level of ambition for 2050 in the Revised Strategy. This is in line with our support for international shipping to do its part, to help keep the Paris Agreement global warming target of 1.5oC within reach. We stand ready to work with member states to revise the ambition of the Initial Strategy and achieve a mutually agreed outcome by July 2023.
14. Singapore’s partnership with the IMO in other areas has also begun to bear fruit. At SMW 2022, MPA and IMO jointly launched NextGEN Connect, which brings industry, academia, and global research centres together, to offer inclusive solutions for maritime decarbonisation along specific shipping routes. We have since received many high-quality submissions for the NextGEN Call for Proposals.
15. Following a rigorous evaluation by an international expert panel, I am pleased to announce that the winning proposal is by the Lloyd’s Register Maritime Decarbonisation Hub (LR MDH), for the “Development of a Route-Based Action Plan Methodology based upon the Silk Alliance”. The Silk Alliance is a green shipping corridor project. It trials emissions saving strategies for container ships operating primarily in Asia, based on LR MDH’s First Movers Framework. This proposal reaffirms the pragmatic and inclusive approach needed to accelerate the adoption of low and zero-emission solutions.
16. Singapore looks forward to working with Lloyd’s Register, IMO and other partners to implement this initiative. Congratulations to the winning team!
17. Singapore has also been actively promoting decarbonisation partnerships at the port-to-port level. In August 2022, MPA established the world’s longest Green and Digital Shipping Corridor (GDSC) with the Port of Rotterdam. Since then, both sides have been studying the feasibility of different net-zero fuel pathways for the Singapore-Rotterdam shipping route, including biodiesel, methanol, ammonia, and hydrogen. We have also welcomed several new stakeholders, such as Yara Clean Ammonia, and the Nanyang Technological University Maritime Energy and Sustainable Development Centre of Excellence. Singapore and Rotterdam will co-host a stakeholder workshop for the green corridor tomorrow.
18. On the digital track, we have also convened stakeholders to work on data standards and pilot projects, such as just-in-time vessel arrivals and digital port clearances among our customs authorities.
19. The success of our first GDSC has given us the confidence to initiate new GDSCs with other partners. Today, I am pleased to announce that the MPA will sign a Memorandum of Understanding (MOU) with the Port of Los Angeles and the Port of Long Beach to establish Singapore’s second GDSC, connecting Singapore and the San Pedro Bay port complex.
20. This GDSC, which is supported by C40 Cities, will accelerate the decarbonisation of international shipping along the critical Transpacific-trade lane. This GDSC complements existing bilateral initiatives between Singapore and the United States, such as the US-Singapore Climate Partnership, and the US-Singapore Partnership for Growth and Innovation.
21. At the same time, the maritime sector must address the operational and safety challenges posed by alternative fuels. This includes the need for revised safety procedures. That is why MPA will be hosting the International Chemical and Oil Pollution Conference and Exhibition (ICOPCE) later this week. A tabletop exercise based on the scenario of a methanol spill at sea will be conducted for the first time.
22. In summary, when it comes to decarbonisation, we will continue to support the work of the maritime sector at every level – multilateral, plurilateral, bilateral, and domestic.
Digitalisation and Innovation
23. Second, the maritime sector must increase its efficiency and productivity through digitalisation and innovation. Singapore has been accelerating our efforts in this area, and continues to be an attractive destination for maritime companies, including MarineTech businesses. Singapore’s maritime sector’s digitalisation and technology spending grew by 68% in 2022, with more than $100m on innovation and R&D.
24. The digitalisation of the maritime industry will inevitably come with concomitant risks. Among other things, it will increase the threat surface, or our exposure and vulnerability to cyberattacks. To be better prepared, this year we have invited cybersecurity experts to join our expanded Maritime International Advisory Panel (IAP). This is in addition to new representatives from classification societies and decarbonisation researchers. The IAP will meet over the next two days to discuss a range of issues including digitalisation, cybersecurity, and the multi-fuel transition. We look forward to a rich and productive discussion.
Talent Development
25. I’ve talked about decarbonisation and digitalisation. The key enabler of all of these is talent. The future of the maritime sector depends critically on the quality of our maritime professionals.
26. In this regard, MPA has been providing capacity building assistance to IMO Member States, under the IMO-Singapore MOU on the Third Country Training Programme, since 1998. This is an important initiative through which Singapore seeks to support talent development for the broader international maritime community.
27. In commemoration of the 25th anniversary of the IMO-Singapore MOU, and the 75th anniversary of the adoption of the IMO Convention, I am pleased to share with you that Singapore will pledge an enhanced technical cooperation and training package of USD 5 million. This package will provide opportunities for fellowships, scholarships, workshops, and courses for the IMO and Member States, from 2024 to 2028.
28. As an intrinsically international sector, it is important that our maritime professionals develop global perspectives. Hence, I am pleased that MPA and the Shanghai Maritime University (SMU) will be signing an extension of an MOU later today on the sidelines of the 4th Singapore-Shanghai Comprehensive Cooperation Council meeting. The MOU seeks to deepen talent and knowledge exchanges between Singapore and China’s maritime ecosystem.
29. It is equally important, amidst this broader global and international focus, that we continue to inspire and attract the next generation of maritime talent to join us, and grow with us. So, for the first time, a youth track has been introduced at SMW 2023 through the Maritime Manpower Forum’s panel dialogue, and the ‘Youth@SMW’ platform for focus-group discussions amongst youth on the future of the maritime sector. I warmly welcome the involvement of our youth, some of whom are here with us in the audience today.
Conclusion
30. So if I may conclude, the journey ahead for the maritime sector is not without its uncertainties and challenges. But it is also clear that it holds the promise of new and interesting opportunities. Our collective mission must be to work together, navigate our path through choppy waters, and stay the course. As the saying goes, "a smooth sea never made a skilled sailor".
31. I wish all of you an inspiring and fruitful week ahead. And, for our overseas guests, I wish you an enjoyable and memorable stay in Singapore.
32. Thank you for joining us.
