- OceanScore analysis reveals a near-tripling of EU ETS costs for shipping companies due to persistent missile attacks by Houthi rebels in the Red Sea.
- The diversion of vessels to the longer Cape of Good Hope route has significantly increased fuel consumption and emissions, leading to soaring emissions liabilities under the EU ETS.
The relentless missile attacks by Houthi rebels on vessels navigating the Red Sea have triggered a dramatic escalation in emissions liabilities for shipping companies participating in the EU Emissions Trading System (EU ETS), according to insights from OceanScore, a maritime technology firm.
Safer, Longer Route
As a result of the heightened threat posed by Houthi attacks, an increasing number of commercial ships have opted for the longer and safer route to Europe via the Cape of Good Hope, adding approximately 9000 nautical miles to their journey. This diversion, undertaken by over 620 vessels to date, has significantly inflated fuel consumption and emissions.
Rising Voyage Costs
The diversion of marine traffic away from the Red Sea has led to a substantial rise in voyage costs for shipping companies. OceanScore’s analysis indicates that bunker consumption has tripled due to the longer distance and increased sailing speeds required to maintain operational efficiency.
Impact on EU Allowances (EUAs)
OceanScore’s modeling further reveals a near-tripling of the number of EU Allowances (EUAs) required to cover emissions for each voyage, from 1800 to 5200 per voyage for a 14,000-TEU container ship. This translates to a substantial increase in EUA costs per voyage, reaching €285,000 this year based on current carbon prices.
Navigating Uncertain Freight Outlook
Albrecht Grell, co-Managing Director of OceanScore, emphasizes the potential impact of volatile carbon prices on EUA costs, highlighting the need for shipping companies to factor in higher emissions liabilities amid the uncertain outlook for ocean freight.
Prioritizing Safety Amid Financial Considerations
While addressing the financial implications of EU ETS compliance, Grell underscores the paramount importance of prioritizing crew and vessel safety in the face of ongoing security threats in the Red Sea region.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Ajot
