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UNCTAD’s Review of Maritime Transport 2023: Decarbonizing Shipping to Cost Over USD 100bn/year

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Decarbonising shipping to cost over $100 bn per yearUnited Nations Conference on Trade and Development (UNCTAD)’s Review of Maritime Transport 2023 urged to take action and system-wide collaboration to decarbonize maritime transport. The report warns that the decarbonising shipping would cost over USD 100 billion per year as the emission continue to increase.

  • UNCTAD urges the need for cleaner fuels, digital solutions and an equitable transition to address ongoing carbon emissions and regulatory uncertainties in the shipping industry.
  • The Review of Maritime Transport 2023 was launched on September 27, 2023 (ahead of the World Maritime Day 2023 – 28 September 2023).

Shipping Dominance and Emissions:

i.Accounts for over 80% of global trade volume.

ii.Contributes nearly 3% of global greenhouse gas emissions.

iii.Emissions increased by 20% in the past decade.

Financial Requirements for Decarbonization:

i.Additional USD 8 billion to USD 28 billion annually needed to decarbonize ships by 2050.

ii.Substantial investments of USD 28 billion to USD 90 billion annually necessary for developing infrastructure supporting 100% carbon-neutral fuels by 2050.

Key Points:

i.Full decarbonization could raise annual fuel expenses by 70% to 100%, affecting Small Island Developing States (SIDS) and Least Developed Countries (LDCs) heavily reliant on maritime transport.

ii.The Review emphasizes the need for a transition to cleaner fuels in the shipping sector as nearly 99% of the global fleet still relies on conventional fuels.

iii.Global shipping  industry predicts 2.4% growth in 2023, with containerized trade (which declined by 3.7% in 2022) expected to expand by 1.2% in 2023 and over 3% between 2024 and 2028.

iv.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).

  • The updated plan also aims for net-zero emissions close to 2050, replacing the previous 50% reduction target.

Recent Related News:

i.According to UNCTAD’s “World Investment Report 2023(WIR 2023): Investing in Sustainable Energy for All”, Foreign Direct Investment(FDI) in Asia’s developing countries remained unchanged at USD 662 billion and India and Association of Southeast Asian Nations (ASEAN) were the top recipients , with an increase of 10% and 5% respectively.

ii.As per the UNCTAD, approximately 137 out of 194 countries have implemented laws to safeguard data and privacy.

About United Nations Conference on Trade and Development (UNCTAD):
It is an intergovernmental organization which promotes the interests of developing countries in world trade.
Secretary-General– Rebeca Grynspan
Headquarters– Geneva, Switzerland