Shippers should brace for massive decarbonisation-related rate hikes - Drewry
Drewry has warned shippers that decarbonisation of the global shipping industry could result in up to $14 billion in extra costs.
The maritime consultancy believes that many of the world’s largest importers and exporters are insufficiently informed about the full implications of the forthcoming new emissions regulations and the billions of dollars that will be added to freight costs in the future.
The International Maritime Organization has set a target to reduce GHG emissions by 50% by 2050 (from a 2008 baseline) – and this will be complemented by regional and national regulations, says Drewry.
“Besides regulatory changes resulting from decarbonisation policies, emissions limits and related taxes, there will be enormous technological change in the design of ships and their propulsion systems, with a transition to engines powered by low or zero carbon fuels,” managing director Philip Damas points out.
The European Union has announced its intention to introduce ‘carbon taxes’ in shipping via its Emission Trading System, which will penalise users of high-carbon fuels such as conventional fossil fuels and apply not only to shipments within Europe, but also to all shipments to and from Europe. It’s the first region to do so.
In consultation with ocean carriers and representatives of shippers and industry associations, Drewry has designed a new Carbon Tax and New Fuel Forecasts tool, which provides forecasts based on the ‘most likely’ regulations. It uses three scenarios of future carbon taxes, and three ‘most likely’ new green fuel types (Liquefied Natural Gas, green methanol and green ammonia).
“The first industry-wide costing of both the European carbon taxes and for transitioning all European container shipments to a greener fuel type shows a cost range for 2024 of between $3.5bn and $14.5bn, depending on the extent to which the industry switches to LNG and other greener ships instead of keeping to conventional fuel oil,” Drewry adds.
In July, Maersk announced it was planning to introduce surcharges of 170 euros/40ft container for its Asia to North Europe services and 185 euros/40ft for North Europe to US services, thereby passing on the extra regulatory costs. MSC has followed with an announcement that it is planning to introduce surcharges of about 138 euros/40ft container for its Asia to North Europe services. Other major carriers have yet to announce their intentions following the regulatory changes, says Drewry, which has urged transparency on the issue.
Courtesy of Southern Africa’s Freight News – Full Article