On Tuesday, the UN warned that carbon emissions from shipping activities were on the rise, urging the industry to scrap old and polluting vessels and upgrade their infrastructure to expedite the green transition.
The trade and development agency associated with the UN is UNCTAD. It highlighted the critical role that shipping plays in the global economy, with more than 80% of traded goods worldwide moved by sea.
But as the world becomes aware of the need to cut down on greenhouse gas emissions drastically to avert catastrophic results of climate change, the global maritime fleet experienced emissions growth by 4.7% between 2020 and 2021 alone, it mentioned.
The number is moving in the wrong direction, Rebeca Grynspan, the UNCTAD chief, told reporters ahead of the introduction of the agency’s annual report published on maritime transport.
Grynspan, a former VP of Costa Rica, raised concerns regarding the average age of ships that sail in the seas at almost 22 years old.
She mentioned that these ships tend to pollute more as they age, stressing the rising need for a new generation of vessels, especially those that can use the most cost-efficient fuels and integrate with intelligent digital systems seamlessly.
Adapting ports – UNCTAD urged more investments in operational and technical improvements to reduce carbon footprint, including switching to alternatives like zero or low-carbon fuels and optimizing necessary operations.
Tuesday’s report reportedly warned that the dire worldwide economic outlook, teamed with rising borrowing costs and regulatory uncertainties, would hamper investments in new ships required to lower greenhouse gas emissions.
It subsequently called for a more predictable regulatory framework for investing in decarbonization and increased support for developing nations in this energy transition.
And it further emphasized the need to adapt ports to climate change’s severe and evolving impacts.
If ports must remain competitive, they must serve green technology ships, including clean fuel access and adapted maintenance.
The changes are coming at a time when global crises have firmly rocked the international shipping sector.
Covid-19, followed by the war in Ukraine, climate change and geopolitics, have blocked major ports, pushed up the prices, and closed shipping routes, she mentioned.
Growth slowed in 2022 – Tuesday’s report highlighted that global maritime trade experienced a significant hit during the first year of the pandemic in 2020, shrinking by 3.8%. It managed to rebound in 2021, jumping to 3.2%.
Unfortunately, again this year, the recovery lost steam, explained Shamika Sirimanne, UNCTAD’s chief for technology and logistics, pointing to geopolitical tensions, the gradually slowing global economy, and the new waves of infections in China that reportedly shuttered its factories.
The sector is, however, expected to witness moderate growth in 2022 of 1.4%, and from 2023 to 2027, maritime trade may experience 2.1% annual growth on average, she added.
But when marking an improvement from 2022 that is significantly lower than the long-term trend before the ongoing COVID-19 pandemic of 3.3-% annual growth on average in worldwide maritime trade.
Regarding freight costs, Sirimanne explained that they were expected to be higher on average than before the ongoing pandemic and more volatile.
A reason for that is rampant consolidation in the whole industry, UNCTAD mentioned, pointing out that the four biggest carriers reportedly increased their market shares to control over half the global capacity in the past five years.
Grynspan said that it was essential for the international community to maintain a competitive and open market.
The giant size of the firms and the increasing size of the ships are highly worrying, UNCTAD explained, further warning that relatively more minor ports and smaller nations could not accommodate them.
References: UN News, Infra.economic times