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Is a reduction in maritime emissions a market mirage?

The maritime industry has raised environmental concerns, mainly related to emissions.

According to reports, ocean shipping accounts for more than 80% of global trade by volume and contributes nearly 3% of the world’s total greenhouse gas output. Efforts to curb emissions in this industry have gained momentum in recent years, fueled by increasing awareness of climate change.

A December report titled “Decoding Maritime Emissions” questions whether a significant reduction in emissions is a genuine step toward sustainability or a byproduct of market conditions.

The report was created by VesselBot, a greenhouse emissions reporting tool for the maritime sector that leverages virtual models of ocean fleets, or digital twins, to produce accurate emissions records for stakeholders.

“We know where the vessel has been, which ports it has called, how much time it’s been at anchorage, the vessel’s average speed, how many containers it has unloaded for each voyage and much more. … We are using technology in conjunction with real data, content from satellites coming from all different sources, so it gives you a more holistic understanding of the [ocean] market and how that market performs in regards to a specific carrier’s performance,” VesselBot co-founder Constantine Komodromos told FreightWaves.

This month’s report attributes a noteworthy reduction in maritime emissions to a combination of technological advancements, operational improvements and the adoption of cleaner fuels. It suggests that the industry is making significant strides toward meeting international emission reduction targets.

For example, from January to July 2023, container vessels saw a notable 12% decrease in greenhouse gas emissions, measured in kilograms of carbon dioxide emitted per metric ton of goods shipped, in comparison to the corresponding period in 2022.

While the report paints an optimistic picture, the broader context stirs some skepticism. It is unclear whether the reduction in emissions is a result of genuine efforts to mitigate environmental impact or a consequence of market dynamics.

Reduced demand for shipping in the initial half of 2023 prompted shipping companies to take measures including canceling voyages, slowing down sailing speed and redistributing large container vessels away from major trade routes. Large container vessels operating on those routes covered extended distances between the point of origin and destination, leading to a notable increase in carbon dioxide emissions per metric ton of goods they shipped, according to the VesselBot report.

The maritime industry is susceptible to economic fluctuations, and during periods of economic downturn, there is often a decline in shipping activity. This can inadvertently lead to lower emissions due to reduced demand rather than intentional emission reduction strategies.

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The maritime sector is also subject to evolving environmental regulations, and compliance with these regulations may be a driving force behind emission reductions. However, meeting regulatory standards does not necessarily equate to a proactive commitment to sustainable practices.

“This market is slower to adopt [alternative fuel] solutions. It’s not like you can go and buy a new car or truck within the next month; you need two or three years to build a new vessel, and some alternatives are not readily available to invest in. These are also not easy to use and require a lot of investment in infrastructure to be able to utilize a network of alternative fuels available at all ports. You have got a much slower process for decarbonization in the maritime industry,” said Komodromos.

While any reduction in maritime emissions is a positive development, it is essential to approach such reports cautiously. The interplay of market conditions, regulatory requirements and economic considerations must be considered when evaluating the authenticity of emission reductions, Komodromos explained to FreightWaves.

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