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The United Nations Conference on Trade and Development (UNCTAD), which promotes the interests of developing countries in world trade, has called for equitable transition to a decarbonised shipping industry.
The UNCTAD’s Review of Maritime Transport 2023 says that the shipping sector, whose greenhouse gas emissions have risen 20 per cent over the last decade, operates an ageing fleet that runs almost exclusively on fossil fuels.
Full decarbonisation by 2050 will require massive investments and could lead to higher maritime logistics costs, raising concerns for vulnerable shipping-reliant nations like small island developing states.
The report emphasised the need to balance environmental goals with economic needs but underscores that the cost of inaction far outweighs the required investments. Beyond cleaner fuels, the industry needs to move faster towards digital solutions such as Artificial Intelligence and blockchain to improve efficiency and sustainability.
In its analysis of global maritime trends, the report highlights shipping’s resilience despite major challenges stemming from global crises, such as the war in Ukraine. Maritime trade is expected to grow 2.4 per cent in 2023 and more than 2 per cent between 2024 and 2028.
The maritime sector stands at a pivotal moment, facing the daunting challenge of decarbonisation while navigating economic and geopolitical headwinds.
The maritime industry’s greenhouse gas emissions, which account for 3 per cent of the global total, have increased by 20 per cent over the last decade. Without action, emissions could reach 130 per cent of their 2008 levels by 2050, the report said.
Complicating matters is an ageing world fleet. As of early 2023, the average ship’s age was 22.2 years. With over half now older than 15 years, many ships are either too old to retrofit or too young to scrap.
The urgency of decarbonisation is evident, yet the sector faces multibillion-dollar investments amid uncertainty about the best transition methods.
Alternative fuels show promise, but their adoption remains in the early stages, with 98.8 per cent of the fleet still sailing on fossil fuels. The silver lining is that 21 per cent of vessels on order will operate on cleaner alternatives such as liquefied natural gas, methanol and hybrid technologies, the report said.
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