Padmesh Prabhune –
No improvements in real-world containership efficiency despite big investments in Green Ship, Says Report
Europe’s container ships pollute as much per container as they did six years ago and there seems to be no major improvement in real-world containership efficiency despite investments in Green Ship.
A new analytical study commissioned by T&E shows that under real life conditions, Europe’s container ships pollute just as much on average as they did back in 2018.
According to the EU’s latest shipping data, with 12,589 ships calling at European port, emissions fell slightly in 2023 compared to the year before. But contrary to industry claims that ships are operating more efficiently, decreases in emissions like we saw in 2023, are likely down to a fall in trade.
Recent improvements in ship technology have led to more technical efficiency in new ships, however there is a huge scope of improvement.
The study commissioned by T&E also found that there is likely no link between fuel prices and ship speeds, which is the biggest contributor to operational efficiency. While the study found that shipping companies tend to order more efficiently designed ships six years after higher global oil prices, no link was found between fuel prices and sailing speeds. This is backed up by the EU’s official MRV data for 2018 to 2023.
Fossil Fuel equally bad
Oil and gas majors and some shipping companies present liquefied fossil natural gas (LNG) as a cleaner alternative to traditional marine fuels and a transitional fuel in shipping’s decarbonisation journey. While LNG combustion emits fewer local air pollutants and less CO₂ than conventional marine fuels, unburned methane that slips from LNG engines, especially the most polluting ones, commonly used in passenger and cruise ships, undermines its potential climate benefits.
Whereas the uncombusted methane issue is increasingly recognised as problematic by policymakers, the upstream greenhouse gas emissions that occur during the extraction, processing, liquefaction, and transport phases of LNG largely go under the radar. Known as well-to-tank emissions, they vary considerably depending on the LNG production location, influencing the overall climate impact of LNG-fueled ships. To better quantify the effects of these upstream emissions, T&E commissioned.
The Price Sensitivity of efficiency
Many policy-makers in the European Union (EU) and the International Maritime Organization (IMO) argue that the higher prices that result from emissions pricing and fuel standards will lead to energy efficiency improvements and emissions reduction.
T&E commissioned CE Delft to study the relationship between fuel prices and technical and operational efficiency over three decades to find out to what extent shipping companies behave more efficiently either by ordering more efficiently designed ships or by operating more efficiently (using sailing speed as a proxy). While the novel analysis on technical efficiency shows that shipping companies order slightly more efficient ships as a result of higher fuel prices (albeit with a time lag of around 6 years), the analysis found no clear relationship between higher fuel prices and better operational efficiency.
Jacob Armstrong, shipping manager at T&E, said: “There just aren’t enough incentives for ships to sail more efficiently. The Data shows that on the whole, transporting containers around isn’t getting more efficient. The biggest improvements in efficiency come from sailing slower. If governments put in place measures that promote real improvements in efficiency, they can slash emissions overnight.”
Follow up Action
The results suggest that the only way to ensure energy efficiency improvements is with bespoke action. Policy-makers in the EU, IMO and other regions should therefore ensure their policy measures to reduce shipping emissions include concrete, explicit measures to improve energy efficiency.
T&E calls for the European Commission to propose an energy efficiency measure, which for example, limits ship speeds and promotes technologies like wind-assistance, through applying the global carbon efficiency measure (Carbon Intensity Index, CII) to ships calling at European ports. At the IMO, T&E calls for negotiators to transform the CII into a true energy efficiency measure and align its targets with the IMO’s 2030, 2040 and 2050 emissions reduction objectives.
-Marex Media