The United Nations is worried about the growing carbon emissions from the shipping industry and have advised dismantling the old/polluting vessels and upgrading the infrastructure for a green transition.
The UNCTAD (UN’s Trade and Development Agency) emphasized the role that the shipping industry plays in the global supply chain and how around 80% of goods are transported via sea and it is reported that global Maritime emissions have risen by 4.7% between 2020 and 2021. UNCTAD Chief Rebeca Grybspan said that there are concerns about the average age of ships sailing the sea. It is believed that a few vessels are more than 22 years old and as they get older they pollute more. However, with new technologies, cost-efficient fuel ships can be built and integrated with smart automated systems. This will help reduce carbon footprint and optimize operations.
The recent survey has warned about the global economic outlook, rising borrowing costs, and uncertainty in regulations that could hamper the new ships and vessels development required for the green mission. The report calls for a predictable global regulatory framework that could invest in decarbonization. These changes are coming during a time when the global shipping industry is going through crises like two years of covid disruption, and now the Ukraine war that has blocked the entire shipping route. Based on the recent report, the shipping sector is witnessing moderate growth in the current year of 1.4% and for the next few years that is from 2023 to 2027, the sector is expected to witness only 2.1% annual growth on average. The freight cost is also expected to remain higher than in the pre-pandemic period. The reason behind the high cost is that a few of the largest carriers have raised their market shares to control more than half of the world’s volume.
Grynspan stated that it is pertinent to maintain an open and competitive market by the internal community, but the situation is worrying and warns that tiny ports and small countries cannot accommodate the giant size of ships.