April 29, 2024
Introduction:
Ongoing attacks by Houthi rebels in the Red Sea area have forced hundreds of ships to divert their routes since mid-December 2023, leading to a significant increase in carbon emissions. Instead of passing through the Suez Canal, vessels are sailing around South Africa’s Cape of Good Hope, adding at least a week to the journey between South Asia and northern Europe.
Impact on Carbon Emissions
According to a report by consultancy INVERTO, a subsidiary of Boston Consulting Group Inc., the additional fuel burned due to these diversions has led to:
- Approximately 13.6 million tonnes of extra CO2 emissions over the past four months
- Equivalent to the pollution generated by about 9 million cars over the same period
The extra emissions make it challenging for companies using ocean freight to reduce pollution across their supply chains and achieve their net-zero targets.
Implications for Shipping Companies
To meet their emission reduction targets, companies will have to:
- Reduce emissions elsewhere in their supply chains, or
- Invest in more carbon offset initiatives
Both options can be costly and may impact the profitability of shipping companies.
Carbon Emissions in the Shipping Industry
- The shipping industry carries 80% of world trade and is a significant contributor to global carbon emissions.
- The International Maritime Organization (IMO), the sector’s global regulator, is working on the world’s first global carbon levy, which is set to come into force in 2027.
Other Findings
- A separate report by Xeneta, an Oslo-based freight-analytics company, focused on container shipping and showed a 63% increase in carbon emissions on the Asia to Mediterranean route in Q1 2024 compared to Q4 2023.
- The Xeneta and Marine Benchmark Carbon Emissions Index reached its highest level in the first quarter of 2024 since records began in 2018.
- Ships are being sailed at higher speeds to make up for the longer distances, resulting in more carbon emissions. The average speed of the world’s largest container ships increased from under 15 knots to above 16 knots after the Red Sea attacks intensified in mid-December 2023.
The shipping industry is a major contributor to global carbon emissions, and the recent diversions due to Houthi attacks in the Red Sea have exacerbated the problem. As the world continues to grapple with climate change, it is crucial for the shipping industry to find ways to reduce its carbon footprint and adopt more sustainable practices.