Geopolitical Disruptions And Trade Route Woes Hinder Decarbonization Goals


  • Escalating attacks in the Red Sea, coupled with disruptions in the Black Sea and Panama Canal, have impacted global trade routes, diminishing efforts to accelerate the decarbonization of the shipping industry.
  • The shifts in maritime routes result in longer distances, increased trade costs, and rising greenhouse gas emissions.
  • This disruptions affect the shipping sector’s ongoing efforts to reduce carbon emissions, highlighting the challenges posed by geopolitical tensions and their potential long-term impact on meeting decarbonization targets.

The shipping industry, responsible for around 80% of the world’s merchandise trade, faces challenges in its decarbonization journey due to disruptions in key trade routes. Attacks in the Red Sea, conflicts in the Black Sea, and climate-induced droughts affecting the Panama Canal have led to significant declines in transits through these crucial waterways.

Impact on Environmental Gains from Slow Steaming

For over a decade, the shipping industry has adopted reduced speeds, known as “slow steaming,” to address fuel costs and reduce greenhouse gas emissions. However, disruptions in major trade routes are compelling vessels to avoid traditional paths, resulting in increased speeds to maintain schedules. This uptick in speed contributes to higher fuel consumption and greenhouse gas emissions, potentially eroding the environmental gains achieved through slow steaming.

Rerouting Challenges and Increased Emissions

Rerouting ships, particularly around the Cape of Good Hope instead of the Suez Canal, leads to longer travel distances, higher trade costs, and increased insurance premiums. Notably, container ships witness a significant impact, with a 1% increase in speed correlating to a 2.2% rise in fuel consumption. For instance, accelerating from 14 to 16 knots increases fuel use per mile by 31%. The UN Conference on Trade and Development (UNCTAD) reports a 70% increase in greenhouse gas emissions for a round trip from Singapore to Northern Europe due to rerouting.

Geopolitical Tensions’ Long-Term Impact on Decarbonization Efforts

As conflicts in the Red Sea persist, there is a direct consequence of increased CO2 emissions in the foreseeable future. The ongoing geopolitical tensions pose a threat to the shipping industry’s decarbonization efforts, potentially disrupting or making unattainable the International Maritime Organization’s interim targets. Targets, including a 20% greenhouse gas cut by 2030 and at least 80% by 2040, might face significant challenges in the wake of prolonged geopolitical conflicts.

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Source: Offshore-energy


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