Latest data reveals that global ocean container shipping emitted an all-time high level of carbon emissions in 2024. This increase is largely attributed to the impact of the conflict in the Red Sea, reports Xeneta.
Record-Breaking Emissions
Global container shipping emissions saw a significant increase of 14% in 2024, reaching a total of 240.6 million tonnes of carbon. This figure surpasses the previous record of 218.5 million tonnes set in 2021.
It’s important to note that this record-breaking level of emissions is primarily attributed to the rerouting of vessels around the Cape of Good Hope. This diversion became necessary following the escalation of conflict in the Red Sea in December 2023, leading to significantly longer sailing distances for container ships.
The inevitable outcome of these diversions was a new record high in emissions, driven by both the increased transport work required to cover the longer distances and the record-high demand for laden containers being moved in 2024. Shippers responded to the Red Sea crisis by frontloading imports, further contributing to the surge in transport activity. Overall transport work, measured as tons of cargo moved multiplied by nautical miles sailed, increased by 18% in 2024.
Shipping Contributes Big
To understand the record-breaking emissions in 2024, it’s crucial to examine the contributions of different vessel sizes:
- The most significant increases in carbon emissions, along with the largest increases in transport work, were observed in the largest container ships.
- Emissions from ships with a capacity between 14,500 and 20,000 TEU reached 24.2 million tons in 2024, a substantial increase of 7.3 million tons (+43%) compared to 2023.
- Ships with a capacity exceeding 20,000 TEU also experienced a large increase in emissions, rising by 35% from 2023 to 19.6 million tons. These two categories of ships over 14,500 TEU accounted for 18% of the total CO2 emissions from the container shipping fleet in 2024. However, it’s important to note that these vessel sizes constitute 25% of the total global container shipping capacity.
- While the largest ships saw the biggest year-on-year increases in emissions, ships in the 8,000 to 12,000 TEU range contribute a much higher share of the total emissions.
- The 51.3 million tons of CO2 emitted by ships in the 8,000 to 12,000 TEU category in 2024 represents an 8% increase compared to the previous year. Despite only making up 20% of the global container shipping capacity, these vessels account for more than one-fifth of the total emissions.
- The disproportionate relationship between the share of shipping capacity and the share of emissions can be attributed to the fact that larger ships tend to be newer and therefore significantly more carbon-efficient on a per-TEU basis.
Regulation Incoming
Returning to the IMO agreement reached in London last week, a central element of this new regulation will be the standard for fuel intensity in global shipping, measured on a well-to-wake basis, encompassing the entire lifecycle of the fuel.
Beginning in 2028, ships will be required to reduce their fuel intensity by a specified percentage compared to the baseline established in 2008. The agreement outlines two tiers for these reduction factors:
- Tier 1 – the base target: This initial target is set at a 4% reduction in 2028. Ships exceeding this base reduction target will incur a cost of USD 380 for every ton of GHG emissions above the threshold.
- Tier 2 – the compliance target: This more ambitious target is set at a 17% reduction in 2028. Ships performing between the base target and the compliance target will be required to pay USD 100 for every ton of GHG emissions or purchase remedial units. Vessels that outperform the compliance target will earn surplus units. These surplus units can be banked for a period of two years or traded with ships that are not meeting the compliance targets.
The reduction targets are scheduled to become more stringent each year, with current expectations pointing towards a 65% reduction in carbon intensity by 2040. It is important to note that numerous details of this agreement are still to be finalized, many of which are expected to be clarified in October 2025 when the agreement is anticipated to be formally adopted.
While the industry response to this agreement has been varied, it provides shipping carriers with a greater degree of certainty regarding the future pathway towards decarbonization.
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Source: Xeneta
