Heavy spending! Shipping companies must “pay for carbon” now!

Heavy spending! Shipping companies must “pay for carbon” now!

For a long time, international shipping has been a high-investment, high-risk industry. Shipping companies spend vast amounts of money on shipbuilding in the early stages, continually bearing high fuel costs and other expenses. Now they also face wave after wave of enormous pressure and risk brought about by the shipping industry’s carbon reduction efforts.

Last month, the official compromise text for revising the European Union Emissions Trading System (ETS) was released, and the inclusion of the shipping industry in the EU ETS is imminent. Shipping companies involved in European routes will have to pay for the “shipping carbon tax” .

01-Polluters pay: Shipping companies face skyrocketing costs

Many leading shipping companies show that adopting EU ETS regulations will cause shipping costs to soar significantly. The current EU carbon quota price is about 90 euros, meaning that when 100% of the shipping industry’s carbon emissions are included in the EU ETS, the cost per ton of fuel consumed by shipping companies will increase by about 300 USD.

For example, a bulk carrier with a 10-year service life and emitting about 16,000 tons of carbon dioxide annually will see its operating costs increase by 1.387 million USD by 2026. Assuming it only trades between EU ports, these costs may further skyrocket.

An EU MRV report analyzing maritime CO2 emissions also provided similar data: the EU ETS will increase the average operating costs of each container ship by 586,000 USD in 2024 and approximately 1.5 million USD in 2026.

Due to the unique business models of shipping companies, they may not always be able to pass the costs onto others. Shipping analyst Lars Jensen states that the carbon tax may bring significant changes and challenges to industry participants. Shipping companies with higher costs are already at a competitive disadvantage.

02-Global shipping industry reshuffle
Non-compliant shipping companies will be eliminated

In addition to the EU’s inclusion of the shipping industry in the carbon emissions trading system, the IMO’s introduction of the Carbon Intensity Indicator (CII) and consideration of a global shipping carbon tax will also have a significant impact on global shipping companies.

As the CII applies to ships of 5,000 gross tons and above, fuel-efficient small container ships are in high demand in the charter market, and charter rates are rising accordingly. Some media reports claim that many charterers now have to pay a premium of 3,000 USD per day for fuel-efficient small container ships. Once the IMO introduces a global shipping carbon tax, setting a price for each ton of carbon emissions by shippers, freight rates could increase by 10-30%, equivalent to 1-4% of transaction prices. Specific amounts will be determined by the trading region and its carbon charges.

Additionally, exporters will tend to cooperate with green, low-carbon shipping companies, such as large cargo owner companies like Amazon, IKEA, and Unilever, which are forcing the shipping industry to transform green from the end of the supply chain. The direct result of this is that non-compliant ships and even shipping companies will be eliminated, and the global shipping industry will undergo a reshuffle.

03-The alarm has been sounded
Slowing down is not a long-term solution

The alarm for accelerating decarbonization and green transformation has been sounded, and shipping companies are responding accordingly. Global container ships are currently sailing at their slowest speeds in history.

However, Thomas Lister, Chief Commercial Officer of Global Ship Lease, states: “The implementation of related regulations will tighten over time.” Slowing down is not a long-term solution.

An IMO report shows that a thin layer of slime up to 0.5 millimeters thick, covering 50% of the hull surface of a medium-length container ship, can increase carbon emissions by about 25%. That is to say, cleaning the hull surface of marine organisms can reduce a ship’s carbon emissions by at least 50%.

Therefore, the IMO recommends that shipping companies reduce carbon emissions by cleaning the hull and reducing sailing resistance.

Neptune robotic ship inspection and cleaning efficiently remove biofouling on the hull, operate in all weather conditions, and do not damage ship paint. Service points cover ports and anchorages in North, East, and South China regions. Neptune has served hundreds of large ships and received customer recognition.

Under the global trend of green and low-carbon transformation in the shipping industry, shipping companies must actively explore low-carbon transformation and green development paths, continuously reduce the carbon emission levels of ship operations, and lower ship performance costs.


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