Shooting the messenger? The shipment carries the tin as investors avoid coal by Reuters

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© Reuters. PHOTO PHOTO: Coal barges are depicted while queuing to get out of the Mahakam River in Samarinda, Kalimantan Eastern Province, Indonesia, on August 31, 2019. REUTERS / Willy Kurniawan
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By Jonathan Saul and Simon Jessop
LONDON (Reuters) – Shipping companies transporting coal around the world are in line with some financial helpers who are cleaning up their businesses unless there is a real push for nations to give up dirty fossil fuels.
As a sign of investors taking the initiative, six European companies representing more than 5% of the shipbuilding industry’s annual financial demands of $ 16 billion told Reuters that they were reducing or thinking of reducing exposure to coal-carrying vessels.
These carriers are titanium vessels that are -270 meters long and capable of transporting hundreds of thousands of tons of cargo – these are the cheapest ways to transport coal and other products such as iron and grain in large quantities.
Swiss Re (OTC 🙂 told Reuters that from 2023 it would no longer cover the transport of thermal coal through reinsurance agreements, where it covers the portfolio of insurance policies. Direct coal cargo insurance came out in 2018.
“There is a lot more pressure on insurance companies when it comes to ESG,” said Patrizia Kern-Ferretti, head of maritime at Swiss Re Corporate Solutions, referring to the scope of sustainable investment. “I have heard from bartenders that they have difficulty putting coal policies on the insurance market,” he added. “More and more companies are applying direct guidelines.”
Esben Saxbeck Larsen, senior portfolio manager at Danica Pension in Denmark, said he was in favor of greener shipping companies as they provided the best risk / return characteristics. The fund has a “close dialogue” with companies about ESG strategies.
“If we are uncomfortable with answers like this, we will not invest in the company,” he added, without delving into the details of the methodology.
These pressures pose new challenges for the shipbuilding industry, which so far have largely focused on coal transportation rather than fuel transportation, production, and consumption by managers and investors.
Andreas Sohmen-Pao, president of the BW Group, operates a diverse fleet that includes oil and gas vessels, offshore vessels and bulk carriers, said ESG pressures from investors and banks – the capital providers for the industry – were growing.
“As for the outcome, that’s another question. Sometimes people exclude a sector and profits improve as supply is moderate,” he added.
“Everyone has to do what they think is right. Sometimes you can have unintended consequences.”
It makes good money from supplying coal, which mostly takes up about 30% of its cargo volume, and has set a record price for fuel shortages, among other things, to provide the power the global economy needs to recover from a pandemic.
And demand is calling for major consumers, including China and India, not to join a pact after https://www.reuters.com/business/cop/cop26-coal-deals-take-aim-dirtiest-fossil-fuel- 2021 -11-03 this week in Glasgow to unravel coal energy in UN climate talks; While Europe and the United States are withdrawing coal-fired power plants, Asian nations are building https://www.reuters.com/business/energy/cop26-aims-banish-coal-asia-is-building-hundreds-power-plants – burn-it-2021-10-29 nearly 200 more.
Khalid Hashim, managing director of Precious Shipping, one of Thailand’s largest owners of dry cargo vessels, said investors should turn to coal consumers and producers.
“What we do is convey it from the point of origin to the point of consumption, like a messenger conveying his message,” he added. “Coming after shipowners seems like an easy way to escape because we don’t have a voice.”
LOAD CAP
The six companies that spoke to Reuters have a capital of more than $ 1 billion on coal accounts, which they finance, insure or reinvent in the dry bulk industry, based on the estimated value of shipping assets.
Major shipment financiers generally provide $ 290 billion in loans to the industry each year, and capital requirements for the bulk segment are about $ 16 billion, according to analysts and Reuters estimates.
The backlog of investors, as part of a broader shift away from fossil fuels in the financial industry, threatens to raise the financial and insurance costs of some shipping companies in the dry land sector, which accounts for half of global shipping volumes.
Marine Capital, a specialist asset manager in London who owns and manages shipping assets on behalf of institutional investors, said financiers would not accept investments in the largest bulk carriers normally known as coal, known as capesize vessels.
“When it comes to small packers under the size of Panamax, the amount of coal they transport is relatively modest and our experiences certainly suggest that institutions today believe that the relationship with coal, from their point of view, is de minimis,” Marine Capital said. CEO Tony Foster.
Tufton Investment Management, another major shipbuilding investor, said it has been increasingly limiting its exposure to coal transport since 2018, especially thermal coal, favoring charterers with fewer opportunities to transport fuel.
“For example, we choose farm houses over miners and utilities,” said investment director Paulo Almeida.
Separately, at least two major ports are undergoing major changes; Antwerp has turned its back on coal, for example, while Peel Ports is remodeling Scotland’s former Hunterston coal import terminal so it can manage offshore wind, dry boat docks, aquaculture and energy recycling.
‘APPLYING THE SPOT’
Some high-end shipping players want to advance the climate curve by moving their businesses away from fossil fuels. Others, who have made weak gains in recent years, want to set aside the benefits of the coal supply.
Monaco’s former Eneti camp is located in the former camp, and this year it has been left without land-based vessels to offer specialized vessels for the offshore wind sector.
“One important note to note when we left the bulk sector was thermal coal,” managing director David Morant told Reuters, saying trying to clean up the coal transport was “applying only lip graffiti”.
“As a listed company, offshore wind energy is growing faster, is environmentally responsible and attractive to our investors.”
Purus Marine, as the founding shareholder of the leading US investment firm Entrust Global, says it is targeting environmentally friendly ocean industries.
“Our business model is to own vessels and marine infrastructure involved in marine renewable energy, marine, ferry and climate-related industrial shipbuilding sectors,” said CEO Julian Proctor.
Higher shipping prices
The impact of higher coal shipping prices would be felt most in Asia, which consumes 80 percent of the global coal supply and is more dependent on coal-fired energy than elsewhere.
Although coal burning emissions are a major driver of climate change, the priority for many developing countries is to provide energy to a rapidly growing population rather than convert them to renewable plants.
Vuslat Bayoglu, managing director of the South African investment firm Menar, which has stakes in South Africa’s thermal coal, anthracite and manganese, said a violent transition from coal would raise logistics costs for producers and consumers.
“The worst case scenario is to see the country plunged into darkness and the manufacturing hit hard, thus predicting some sort of global economic crisis,” he added. “This would be very irresponsible, as many countries are emerging from long recessions and COVID-induced declines.”
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