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An additional $8 billion to $28 billion will be required annually to decarbonize ships by 2050, and even more substantial investments, ranging from $28 billion to $90 billion annually, will be needed to develop infrastructure for 100% carbon-neutral fuels by 2050, according to the Review of Maritime Transport 2023 compiled by the United Nations Conference on Trade and Development (UNCTAD). Full decarbonization could elevate annual fuel expenses by 70% to 100%, the report says.
While the transition to cleaner fuels is in its early stages, with nearly 99% of the global fleet still reliant on conventional fuels, the report cites promising developments, including 21% of vessels on order designed for alternative fuels. However, huge decarbonization costs can potentially affect small island developing states (SIDS) and least developed countries (LDCs) that heavily rely on maritime transport. To ensure an equitable transition, UNCTAD is calling for a universal regulatory framework applicable to all ships, irrespective of their registration flags, ownership or operational areas, thereby avoiding a two-speed decarbonization process and maintaining a level playing field.
Despite a 0.4% contraction in total maritime trade volumes in 2022, the industry anticipates a 2.4% growth in 2023, with containerized trade, which declined 3.7% in 2022, expected to expand 1.2% in 2023 and more than 3% between 2024 and 2028, according to UNCTAD.
