The Annual Cost of Decarbonizing Shipping Exceeds USD 100bn

The United Nations Conference on Trade and Development (UNCTAD) has called for action and collaboration to decarbonize maritime transport in its Review of Maritime Transport 2023. The report highlights that the cost of decarbonizing shipping would exceed $100 billion per year as emissions continue to rise. UNCTAD emphasizes the need for cleaner fuels, digital solutions, and a fair transition to address carbon emissions and regulatory uncertainties in the shipping industry. The review was launched ahead of World Maritime Day on September 27, 2023.

Shipping is responsible for over 80% of global trade volume and contributes nearly 3% of global greenhouse gas emissions. Emissions have increased by 20% in the past decade. The report states that an additional $8 billion to $28 billion annually is needed to decarbonize ships by 2050, and substantial investments of $28 billion to $90 billion annually are necessary to develop infrastructure supporting 100% carbon-neutral fuels by 2050.

The review highlights that full decarbonization could increase annual fuel expenses by 70% to 100%, which would heavily impact Small Island Developing States (SIDS) and Least Developed Countries (LDCs) that rely heavily on maritime transport. The report also emphasizes the need for a transition to cleaner fuels, as 99% of the global fleet still relies on conventional fuels. The global shipping industry is predicted to grow by 2.4% in 2023, with containerized trade expected to expand by 1.2% in 2023 and over 3% between 2024 and 2028. In July 2023, the International Maritime Organization (IMO) agreed to reduce shipping industry emissions by 20% by 2030 and 70% by 2040 compared to 2008 levels, with the aim of achieving net-zero emissions close to 2050.

In other news, according to UNCTAD’s World Investment Report 2023, Foreign Direct Investment (FDI) in Asia’s developing countries remained unchanged at $662 billion, with India and the Association of Southeast Asian Nations (ASEAN) being the top recipients. Additionally, the UNCTAD reports that approximately 137 out of 194 countries have implemented laws to protect data and privacy.

UNCTAD is an intergovernmental organization that promotes the interests of developing countries in world trade. Its headquarters are located in Geneva, Switzerland.

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