Genoa – Environmental regulations are starting to change ship routes around the world. This is demonstrated by a study by the English analysis company Drewry on bulk carriers, that is, the most widespread type of ship in terms of transport capacity: these are ships that transport raw materials such as wheat, coal and iron ore.
A market, explains Tanvi Sharma, senior analyst specialized in the dry bulk sector, which «It will become increasingly fragmented as decarbonization regulations tighten and companies’ capital expenditures increase. And since the ETS will encourage the movement of younger fleets into the European region, and in Europe the Fuel Maritime regulation will attract ships capable of using low-zero carbon fuel, the costs of transporting goods in this continent are destined to increase, further fragmenting the maritime transport market”.
Drewry analyzed data from ships calling at European ports in 2022 and 2023 and corresponding satellite data on the movements of these vessels. It emerged that in European waters, shipowners are sailing with younger and more fuel-efficient units, to save on the costs of CO2 emissions targeted by Ets taxation.
Of all bulk carriers calling at European ports in 2023, there are 1,644 who were not seen in those same ports this year, at least in the monitored period, i.e. January-July.
And none of these ships that disappeared from European waters had less than five years of activity behind them. The analyzed data also tells something more: the older the ships, the the more slowly these are made to navigate, because it is the most effective ploy to avoid incurring environmental sanctions: taking the Capesize units as a reference (with a deadweight capacity of around 170 thousand tons), ships between 0 and 5 years old march with a cruising speed of 12.5 knots (23 kilometers per hour), those with more than 10 years of activity maintain an average speed one knot lower (11.5 knots or 21 kilometers per hour).
It seems little, but they are variations that can determine more or less sailing days. And the trend is destined to increase in the coming years, unless the new European Commission or the United States suddenly reverses – and unless it manages to arrive at homogeneous legislation throughout the world.
As for Europe, the next step is the introduction of the FuelEu Maritime regulation as part of the Fit-for-55 package starting from 1 January next year: the objective of this legislation is essentially to encourage the use of low or zero emission fuels.
All this will therefore have a significant effect on freight rates, if it is true that already today the differential on one-year rental rates between a ship with more efficient latest generation engines and a traditional one today travels with an average difference of $2,000 per day compared to $1,500 in 2021-22.
Drewry also notes that in any case, as regards older ships, these cannot be gradually relegated to markets increasingly distant from those affected by environmental regulations, nor will they be able to slow down their speed indefinitely.
In short, «shipping companies that have to manage more than one ship – says the analyst – should consider reducing the average age of their fleet”. In this context, Drewry reports that today the global order book for bulk carriers is quite low, yet construction prices have doubled on average over the last 10 years. «In areas subject to environmental taxation, companies will move towards younger and more efficient ships – is the conclusion – this, together with a currently modest order book, indicates the possibility of a short-term increase in the charter market, especially in Europe ». —
