Image by Chris LeBoutillier for Unsplash
July 29, 2024
Pollution in shipping might just be one of the largest problems in global logistics infrastructure—not to mention the planet as a whole. It is currently estimated that maritime shipping—which accounts for 90% of all cargo transported in the world—represents some 3% of all CO2 emissions in the world. That is the equivalent to the carbon footprint of well over 217 million homes or burning 387 bn liters of gasoline. For reference, the U.S. has an estimated 131.43 million households.
In great part, this is due to the great growth in our ability to do maritime trade in recent years. Although humans have engaged in some form of commerce for thousands of years, it wasn’t until fairly recently, with the creation of multimodal shipping containers, that we’ve been able to transport meaningful amounts of cargo with ease. In fact, since containers were invented in the 1950s, total trade in the world has grown 29-fold, and the carrying capacity of container ships has grown from an average of 11 deadweight tons (dwt) in the 1980s to close to 300 dwt in 2022. Simply put, after the shipping container came into the picture, we began a steady race to increase the capacity of our vessels and, through such investments, increase our ability to do trade.
Follow our newsletterThe problem, however, is that, in our container ship building spree, we’ve come to prioritize heavy pollutants. As of 2021—the last year for which the International Maritime Organization released official statistics—, it was estimated that 81.8% of all fuel consumed by the maritime shipping industry was either Heavy Fuel Oil or Light Fuel Oil, both of which are heavy pollutants. More environmentally friendly fuels like Ethanol and Liquified Natural Gas (LNG) account just for just 5.9% of consumption, although there are some early signs that LNG demand might soon be on the rise.
But it’s not just that our global shipping infrastructure runs on fuels—our consumption is also steadily rising. On average, as of June, 2024, it was estimated that the global shipping industry produces some 910 million tons of CO2 per year. Not to mention that, in 2024 alone, the magnitude of emissions has grown by an additional 23 million tons of CO2 as carriers have been forced to avoid the Suez Canal due to Houthi attacks in the Red Sea. This, in turn, pushes carriers to divert shipments through the Cape of Good Hope, adding multiple days to their journeys and causing increased congestion in Mediterranean ports.
But this is not a recent phenomenon. In 2014, that number was just 694.4 million tons. Meaning that, in the span of a decade, shipping pollution has grown 31%. As of the time of writing this article, the IMO has a steady goal of reaching net zero emissions by 2050 but, with these numbers, it is hard to believe that the shipping industry is headed in the right direction—and with it, that the world is doing enough to stop the rise of climate change.
At Auba, we wanted to delve even further into the impact of the shipping industry to the environment. Thus, we decided to try to approximate the actual impact of not just the industry as a whole but also its largest vessels and carriers.
To start, we decided to look at one crucial fact: the number of vessels responsible for the rise in carbon emissions. As of 2024, and according to UN Trade and Development, the global merchant fleet consisted of 108,787 vessels, with General Cargo Vessels (19.06% of all ships) accounted for the largest individual group, followed by Bulk Carriers (12.48%) and Oil Tankers (11.46%).
Though what’s most important is not the current number of vessels, but the fact that the global fleet continues to grow steadily. Between 2014 and 2024, the number of ships at sea grew from 87,950 to the above mentioned 108,787 vessels. That is a growth rate of 23.6% in the same span during which pollution in shipping grew by 31%.
Now, as the above figure suggests, the general “other type” of vessels category was the fastest growing in total number of ships. These vessels, in general, tend to be far smaller and thus have a smaller impact in total emissions. This, in turn, could be over estimating the total impact of smaller vessels in emissions.
To address this problem, we looked at the total capacity of vessels as measured by tonnage—namely, the total weight of cargo they are able to carry. As expected, when looking at the global maritime fleet by type of vessel, we soon discover that “other vessels” account for just 11.5% of all carrying capacity. It is actually bulk carriers (42.7% of all dwt), oil tankers (28.3%), and container ships (14%) that account for the vast majority of cargo being transported.
If we then assume that total emissions from the maritime industry are equally distributed by the share of cargo handled—which is a better assumption than number of vessels since it serves as a proxy for their size—, we can then find an estimate of the emissions for every vessel. Simply put, we took the total emissions and divided them across vessel types according to their share of the tonnage. Then, we divided the total emissions from each category by the number of vessels in each category to get a rough estimate of the annual emissions per vessel by category.
After doing the above, we found that the average bulk carrier is, by far, the largest source of emissions, resulting in over 28,500 tons of CO2 emitted per year. They are followed by oil tankers (over 20,600 annual tons of CO2) and containerships (20,782 annual tons of CO2).
As a final exercise, and as a means to better understand the impact of individual carriers, we wanted to look more closely at the impact of containerized trade. Since we know the annual emissions of the entire container trade industry (127,378,404.90 tons) and the number of containers currently in circulation (30,273,523 TEUs) we can create a general rule of thumb of the impact of each container. Namely, that each TEU is responsible for, roughly, 4.2 tons of CO2 per year.
This, in turn, allows us to find the total carbon footprint of the largest maritime carriers—which, as we’ve previously reported, are highly consolidated as a sector. In total, the 10 largest carriers account for over 84% of all emissions, or 107.3M tons of CO2—equal to the share of their total TEUs handled.
Crucially, we can look at the expected orders of vessels of these carriers for the coming years to understand the emissions that are likely to be added in the near future. In all, the current orderbook for the world's 30 largest carriers equals some 6.09M TEUs. According to our estimates, this increase in TEUs will result in an additional 25.6M tons of CO2.
In summary, all our research shows that the shipping industry is not just reliant on heavy pollutants, but continues to make strategic investments in them. For years, global shipping has been powered by fossil fuels and, despite recent signs of a shift in consumption, the bulk of the world’s maritime fleet still operates with highly polluting energy sources. In all, over 910 million tons are emitted every year by the shipping industry alone. If nothing is done to curve said emissions, they might soon be much higher.
