- Container shipping faces heightened fuel and emissions costs due to the necessity of rerouting around the Red Sea and Suez Canal amid persistent Houthi attacks.
- As vessels opt for longer routes around Africa’s Cape of Good Hope, fuel consumption triples, sailing speeds increase, and carbon credit expenses soar, impacting operational efficiency and financial viability.
Prolonged Houthi missile and drone attacks on commercial vessels have led to a significant decrease in container ship transits through the Suez Canal, prompting vessels to divert around Africa’s Cape of Good Hope.
Impact on Fuel Consumption and Emissions
German maritime technology firm OceanScore reports a threefold increase in bunker consumption as container ships travel an additional 9,000 nautical miles, coupled with a 25% rise in sailing speeds to shorten journey times.
Financial Implications for Container Shipping Companies
The rerouting substantially elevates fuel and emissions costs, driving up expenses for carbon credits required for compliance with the European Union’s Emissions Trading System (EU ETS). OceanScore’s analysis projects a nearly threefold surge in EU Allowance (EUA) costs per voyage, from €98,000 to €285,000 in 2024, with potential further increases as carbon prices fluctuate and EU ETS coverage expands.
Future Challenges and Considerations
With the phased implementation of the EU ETS, container shipping companies face escalating carbon offsetting requirements, posing additional financial challenges in the coming years. Despite variations in vessel operations and efficiencies, the overarching trend underscores the significant financial burden imposed on container shipping by the necessity of rerouting around the Red Sea.
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Source: Riviera
