Open Translation

BRUSSELS: Following the introduction of the world’s first carbon market for maritime shipping in January, a study by Transport & Environment (T&E) suggests container shipping companies are making significant profits from charging customers a surcharge to offset their emissions.

This year operators will only have to pay 40 percent of the offset cost of their emissions – increasing to 70 percent in 2025 and 100 percent the following year.

T&E looked at 565 journeys of 20 different ships from each of Europe’s four box companies: Maersk, MSC, CMA CGM and Hapag-Lloyd.

Based on an official carbon price of €90, T&E estimates Maersk will average a €60,000 surcharge per voyage this year followed by MSC (€25,000), Hapag Lloyd (€23,000) and CMA CGM (€14,000).

On a single journey from China to Germany the watchdog says Maersk is likely to make €325,000 in surcharge profits while Hapag Lloydʼs most profitable single journey will be €204,000, MSCʼs €125,000 and CMA CGMʼs €139 000.

“Shipping giants are ripping off customers by using environmental measures as a way to charge customers more. Whether it is disruption in the Red Sea or a new carbon price, shipping companies always win,” comments T&E Shipping manager Jacob Armstrong. “Southern European governments are warning that the ETS will cost them business by ships evading their ports, but why would they if they’re making money from it?”

T&E notes ETS costs are also much less than levies imposed in response to attacks by Houthi militants on Red Sea trade. The organisation calculates CMA CGM’s ETS costs on routes from Asia to Europe are less than one percent of a total container cost compared to the Red Sea surcharge of nearly 18 percent.

“The Red Sea disruption is pretty much as bad as it gets and global trade still hasn’t ground to a halt. The ETS is peanuts in comparison. Cost is not a barrier to shipping decarbonisation when the most ambitious green measures would add just cents to most consumer goods,” Armstrong adds.

In its March 2024 update on global trade, the UN Conference on Trade and Development (UNCTAD) explains shipping is a highly international business. So a single attack on a vessel carrying consumer goods, food, medical items and industrial spare parts for several thousands importers and exporters has a worldwide impact:

“A typical (container) ship may be built in the Republic of Korea, crewed by Filippino seafarers recruited through a crewing agency based in Cyprus, owned by a German investment fund, technically inspected by an Indian classification society, registered under the flag of the Marshall Islands, insured by a protection and indemnity club in Norway, fuelled at a bunkering station in Singapore and operated by liner shipping company in Denmark.”

As geopolitical tensions continue to disrupt Red Sea and Suez Canal shipping routes and efforts to maintain water levels in reservoirs supplying the Panama Canal are expected to continue reducing transit volume this year, UNCTAD forecasts a rise in shipping costs “along with extended voyages and disrupted supply chains”.

COPENHAGEN: The Science Based Targets initiative (SBTi) says Maersk’s greenhouse gas emissions’ (GHG) targets will meet the Paris Agreement 1.5˚C pathway.

The validation is an industry first under SBTi’s new maritime guidance published in late 2022.

Maersk’s goal is to achieve net-zero GHG emissions for its entire business by 2040. The latest SBTi validation includes specific and absolute targets to reduce emissions from the company’s own operations (Scope 1 & 2) and across its supply chains (Scope 3).

The SBTi is a collaboration of the CDP (Carbon Disclosure Project), UN Global Compact, World Resources Institute and the World Wide Fund for Nature enabling businesses to halve emissions before 2030 and achieve net-zero emissions before 2050.

“The Science Based Targets initiative represents the highest standard for corporate climate targets,” noted Maersk COO Rabab Raafat Boulos. “We are committed to do our share but we cannot do it alone [as] we are dependent on, and working with, the ecosystem that we are part of, including customers, suppliers, industry peers and regulators.

“Importantly, there is a need for global regulations from the International Maritime Organization (IMO) to close the price gap between fossil and green fuels to secure a level playing field,” he added.

Maersk says almost 60 percent of its top 200 customers have committed to or set science-based targets, including their supply chains. The company describes its net-zero goal as reducing Scope 1, 2, and 3 emissions to zero, or to a residual level that is consistent with reaching net-zero emissions at the global or sector level.

Group revenue for 2023 was US$51.06 billion – down from US$81.53 billion in 2022. Profit before interest and tax was US$3.93 billion compared to US$30.86 billion the previous year.

“2023 was a transitional year following the extraordinary market boom caused by the pandemic. We secured solid financial results despite significantly changed circumstances and we are well positioned to manage the expected headwinds in 2024,” commented CEO Vincent Clerc. “The current market remains one of robust volumes, but while the Red Sea crisis has caused immediate capacity constraints and a temporary increase in rates, eventually the oversupply in shipping capacity will lead to price pressure and impact our results.”

HAMBURG/COPENHAGEN: Hapag-Lloyd is replacing the Mediterranean Shipping Company (MSC) as Maersk’s liner shipping partner beginning in February 2025 when Maersk and MSC part company.

The new alliance, called Gemini Cooperation, will provide 26 mainline services with a fleet pool of around 290 vessels with a combined capacity of 3.4 million containers (TEU) split 60 percent Maersk and 40 percent Hapag-Lloyd.

The cooperation will cover seven trade routes between Asia and the U.S. East and West Coast; Asia-Middle East; Asia-Mediterranean; Asia-North Europe; Middle East-India; Europe and Transatlantic.

“Teaming up with Maersk will help us to further boost the quality we deliver to our customers. Additionally, we will benefit from efficiency gains in our operations and joint efforts to further accelerate the decarbonisation of our industry,” comments Rolf Habben Jansen.

The two companies say they have set schedule reliability above 90 percent once the network is fully operational.

Both companies are committed to the decarbonisation of their fleets and have set an ambitious decarbonisation targets with Maersk aiming for net-zero in 2040 and Hapag-Lloyd in 2045.

In a related move, Maersk has named the world’s first of 18 large methanol fuel-enabled containerships on order "Ane Mærsk" in Ulsan, South Korea. The vessel will enter service in February between Asia and Europe powered by green fuel.

“This series of vessels will have a transformative impact on our ambition to progress on our industry-leading climate ambitions. It is a visual and operational proof of our commitment to a more sustainable industry,” commented A.P. Moller-Maersk CEO Vincent Clerc.

Maersk defines green fuels as producing “low to very low” greenhouse gas (GHG) emissions over their life cycle compared to fossil fuels. The company describes “low” as fuels with 65-80 percent reduction in lifetime GHG compared to fossil fuels and “very low” as a fuels with a 80-95 percent life-cycle reduction.

Latest News

April 18, 2024
Biodiversity Editor

Humans face 19 percent drop in income from climate impact.

POTSDAM, Germany: According to scientists at the Potsdam Institute for Climate Impact Research (PIK), climate change is going to cost the world economy US$38 trillion a year annually to 2050. Based on empirical data from more than 1,600 regions worldwide over…
April 09, 2024
People Editor

Top European court says ignoring climate impact violates human rights

STRASBOURG: The European Court of Human Rights has, for the first time in law, acknowledged government failure to implement sufficient measures to combat climate change. A case brought by the Swiss Climate Seniors Association (SCSA) claimed Swiss authorities…
April 05, 2024
Transportation Editor

Watchdog claims box carriers profit from EU carbon emissions charge

BRUSSELS: Following the introduction of the world’s first carbon market for maritime shipping in January, a study by Transport & Environment (T&E) suggests container shipping companies are making significant profits from charging customers a surcharge to…
April 05, 2024
Emissions Editor

No change by fossil fuel producers since Paris Agreement

WASHINGTON, DC: According to new analysis, 80 percent of global CO2 emissions produced since the Paris Agreement have been the responsibility of 57 corporate and state entities. Countries and their state-owned companies account for 75 percent of the total…
March 19, 2024
Food Editor

Still butchering the planet

LONDON, UK: A report by environmental organisation Feedback says the world’s 55 largest industrial livestock companies have received over US$615 billion in financing since the Paris Agreement was signed in 2016. As of March 2023, it included US$287.8 billion…
February 28, 2024
People Editor

83 million Americans breathe unhealthy air

BROOKLYN, NY/SAN DIEGO, CA: A report from research and technology company First Street finds 83 million Americans are exposed annually to air quality thresholds categorized as “unhealthy” by the U.S. Environmental Protection Agency’s (EPA) Air Quality Index.…
February 22, 2024
People Editor

Nearly 50 million Americans deny climate change

ANN ARBOR, MI/CHICAGO, IL: A study by the University of Michigan School for Environment and Sustainability (SEAS) has concluded 12-26 percent of Americans, depending on location, deny the reality of climate change. The researchers used Twitter (now X) data…
February 21, 2024
Biodiversity Editor

UAE renewables deal needs US$8 trillion

DUBAI/BERLIN: Abu Dhabi National Oil Company CEO and COP28 president Sultan Al-Jaber says he will work with the presidents-designate of COP29 (Azerbaijan) and COP30 (Brazil) to ensure the tripling of investment in renewables agreed in Dubai last December.…
February 19, 2024
People Editor

US$281 billion war profit in two years

LONDON: Five fossil fuel majors have made over US$281 billion net profit since Russia’s invasion of Ukraine two years ago. According to a new analysis by Global Witness, Shell, BP, Chevron, ExxonMobil and TotalEnergies paid US$200 billion to shareholders in…
February 15, 2024
Manufacturing Editor

New CMA CGM feeder fleet designed for less CO2

MARSEILLE: CMA CGM has taken delivery of the first of 10 dual-use 2,000 TEU container vessels to operate on Mediterranean and Northern Europe routes. Initially powered by LNG to reduce sulfur oxide emissions by 99 percent, nitrogen oxide 92 percent and fine…
February 10, 2024
Biodiversity Editor

Greenland ice loss threatens collapse of Atlantic current

PASADENA, CA: A study published in Nature has found the Greenland Ice Sheet lost 20 percent more ice over the past four decades than previously thought. The conclusion follows a 2023 study in Earth System Science suggesting ice losses from Antarctica and…
February 09, 2024
Transportation Editor

Maersk first to have climate targets validated by SBTi

COPENHAGEN: The Science Based Targets initiative (SBTi) says Maersk’s greenhouse gas emissions’ (GHG) targets will meet the Paris Agreement 1.5˚C pathway. The validation is an industry first under SBTi’s new maritime guidance published in late 2022. Maersk’s…

We are using cookies

By continuing you are agreeing to our use of cookies

I understand