The shipping industry is facing challenges in replacing aging ships due to a lack of clarity on future clean fuels and regulatory systems, according to the United Nations Conference on Trade and Development (UNCTAD). This uncertainty is discouraging companies from taking concrete action to decarbonize faster, despite pressure from environmentalists and investors. Currently, the global shipping fleet is aging, with more than half of the fleet being over 15 years old. Ship owners and port terminals are struggling to make investment decisions without clear guidance on alternative fuels and green technologies.
To achieve the goal of decarbonizing shipping by 2050, major investments will be required. Estimates from Norwegian risk manager DNV suggest that achieving this goal would require an additional annual cost of $8 billion to $28 billion for ships. The industry is exploring different technologies, such as ammonia and methanol, as well as wind-assisted propulsion, to move away from dirty bunker fuel. However, these alternatives come with increased costs. Expanding marine fuel production, distribution, and bunkering infrastructure to provide 100% carbon-neutral fuels by 2050 would require an estimated annual investment of $28 billion to $90 billion.
The UNCTAD report highlights the need for global action to decarbonize shipping but acknowledges the challenges and costs involved. It calls for clarity on alternative fuels, green technologies, and regulatory systems to guide ship owners and ports. The report also forecasts moderate growth in maritime trade volume in the coming years, indicating the importance of finding sustainable solutions for the shipping industry.