Conflict in Red Sea Sparks Surge in Ocean Freight Carbon Emissions: Xeneta

Recent data released by Xeneta indicates a significant spike in carbon emissions in ocean freight container shipping, largely attributed to the escalating conflict in the Red Sea region.

The Xeneta and Marine Benchmark Carbon Emissions Index (CEI), which  measures carbon emissions per ton of cargo transported across the world’s top 13 trades, surged to 107.4 points in the first quarter (Q1) of this year, marking its highest level since the index’s inception in Q1 2018, as stated by the Norway-based ocean and air freight rate benchmarking and market analytics platform.

According to the CEI, carbon emissions for containers shipped via ocean from the Far East to the Mediterranean skyrocketed by 63 percent in Q1 2024 compared to Q4 2023. Similarly, emissions for routes from the Far East to North Europe surged by 23 percent during the same period. This surge is directly linked to the conflict in the Red Sea region, which intensified in December and prompted most ocean freight container services to bypass the Suez Canal due to security concerns posed by Houthi militia, as highlighted by Xeneta.

Emily Stausboll, a market analyst at Xeneta, explained that prior to the escalation in the Red Sea, containers traveling to the Mediterranean from the Far East covered an average distance of 9,400 nautical miles in Q4 2023. However, due to diversions around the Cape of Good Hope in Africa, they are now sailing an additional 5,800 nautical miles, resulting in increased fuel consumption. Moreover, ships are compelled to operate at higher speeds to compensate for the longer distances, further exacerbating carbon emissions.

Xeneta’s data also revealed that the disruption in the Red Sea has forced some shippers to resort to air freight to safeguard their supply chains. Cargo originating from the Far East now arrives via ocean at ports like Jebel Ali in the Arabian Gulf before being airlifted from Dubai Airport for onward transportation to Europe and North America. Consequently, air cargo demand from Dubai Airport to European destinations witnessed a staggering 190 percent year-on-year increase in March this year.

Stausboll noted that shippers are also reverting to rail services through Russia to transport goods from the Far East to Europe, which, similar to air freight, incurs higher carbon emissions compared to ocean freight shipping.

This surge in carbon emissions comes at a critical juncture as the International Maritime Organization (IMO) is striving towards achieving net zero emissions in global ocean freight shipping by or around 2050. 

Furthermore, 2024 has seen the implementation of EU-ETS regulations mandating ocean freight service providers to pay a subsidy based on the amount of carbon emitted on sailings to and from European ports

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