Shippers will pay million dollar bills to decarbonize maritime transport – El Mercantil

Shippers will pay million dollar bills to decarbonize maritime transport – El Mercantil

Importers and exporters have to include millions in their operating bill for the decarbonization costs that shipowners pay to comply with the EU regulation to reduce greenhouse gas (GHG) emissions. According to international consulting firm Drewry, “The annual cost will vary from $3,500 to $14,500 million depending on the evolution of maritime transport towards ships powered by liquefied natural gas (LNG) or other greener fuels instead of conventional fuels.

Aiming to reduce greenhouse gas emissions by 50% by 2050, the EU will become the first region in the world to impose a “carbon tax” on maritime transport through the Carbon Emissions Trading Scheme (ETS), which will oblige shipowners to purchase rights progressively from 2023. The Community system will penalize shipowners using traditional fossil fuels and applies not only to transport within Europe but also to transport to and from the mainland.

The European emissions trading system also applies to travel to and from the continent

The consultancy analyzes the decarbonization calculation considering the use of different fuels: those with very low sulfur content (VLSFO), of fossil origin and widely used in industry; liquefied natural gas (LNG), which will play a leading role in the energy transition; and green fuels such as methanol and ammonia. In all three cases, she expects the EU to push through the most ambitious proposal it has on the table for maritime transport, namely applying a price of €200 per tonne of emissions.

For ships powered by VLSFO fuel oil, shippers in Europe would face new costs of $3.5 billion in 2024. That means a 20-foot container now pays $187 in fuel costs. In 2024, according to Drewry data, the fuel surcharge including the carbon tax would be $237, an increase of $50. According to Ship&Bunker, the price of a tonne of VLSFO in the port of Rotterdam was $568.50 last week.

For LNG-powered vessels, on the other hand, the bill endorsed to shippers would reach $14,500 million in 2024. Specifically, the cost per fuel for a 20ft container would increase from $354 to $421 if you add in the EU carbon tax, an increase of $66. The price of fossil LNG has hit an all-time high due to the pandemic and supply chain issues. According to Ship&Bunker, for example, it is currently being paid at 1,854 dollars per ton in the port of Rotterdam. However, experts predict that LNG will return to pre-pandemic prices in the coming years, when they were between $200 and $400/ton. The world merchant fleet has 1,000 ships capable of using LNG, accounting for 1.6% of that, and another 700 units are on order in the shipyards, according to shipbroker Clarksons.

Drewry’s Observatory does not advance the cost of sea transportation using ships that run on renewable fuels such as ammonia and methanol because “the technology and supply infrastructure are not ready” for these green fuels. However, ammonia and methanol will play a leading role in decarbonizing an industry that is now largely dependent on oil. According to the latest report from the International Energy Agency (IEA), in a zero-emissions scenario, by 2050 ammonia will provide 45% of demand for marine fuel, hydrogen and bioenergy, from which methanol is derived, paying 20% ​​each, and the remaining 15 % will come from oil.

The data published by Drewry does not include the operating costs that shipowners have to incur to adapt their fleets to European and international environmental regulations. According to the classification society DNV, these will vary between 8,400 and 30,000 million euros per year in order to achieve the zero emissions obligation.

The major shipowners of the regular line have communicated to their customers the expenses motivated by the European regulation

Although the main regular liner operators in the case of Maersk and the Mediterranean Shipping Company (MSC) have already informed their customers that they intend to absorb the costs that community regulation entails, “many of the world’s largest importers and exporters are doing don’t have enough information about the impact of the new emissions regulations and the billions of dollars that will be added to the freight price in the future,” they explain from Drewry. To cover the community’s carbon tax, Maersk announced back last July that it plans to introduce surcharges of 170 euros for a 40-foot container on its Asia-Northern Europe services and 185 euros on routes from Northern Europe to the United States With this in mind, MSC announced last week that it would introduce a surcharge on its Asia-Northern Europe services To introduce a surcharge of 138 euros for a 40 ft container The costs will be in both cases calculated on the basis of a price of EUR 90 per tonne of emissions.

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