Record-breaking emissions in ocean container shipping – the causes and impact
December 11, 2024
In-depth report from Xeneta and Marine Benchmark covering the record-high emissions from the container shipping fleet in 2024.
Total emissions from container shipping in the first 10 months of the year stand at 199.7 million tons of CO2.
This is 13.8% higher than the same period in 2023.
It also means container shipping emissions for the full year 2024 are on track to beat levels from 2021 when emissions last peaked. In the first 10 months of 2024, total emissions are 9.5% higher than they were in the first 10 months of 2021.
Large ships emit most carbon – but are more energy efficient
Ships over 20 000 TEU have emitted 37% more CO2 this year than in the first 10 months of 2023, while ships between 14 500 and 20 000 TEU are up 44%. These high growth rates mean, in the first 10 months of 2024, emissions from these two large ship types have already surpassed total emissions in any previous full calendar year.
Absolute emissions must be put into the context of the make-up of global fleet capacity. While ships over 20 000 TEU account for 8.1% of total emissions, they make up 10.6% of total capacity in the global fleet.
This highlights how the larger ships are more energy efficient, especially when compared to ships between 1 000 and 2 000 TEU, which only account for 7.6% of global capacity but 10.1% of total carbon emissions.
Ships smaller than 1 000 TEU are the only category with lower year-on-year emissions in the first 10 months of 2024. The 4.6% drop is largely explained by a decrease in the number of these ships in the global fleet.
Increasing emissions due to TEU volume and sailing distance
The level of carbon emissions in 2024 will not come as a surprise to many people given the record number of containers transported globally this year and the increased sailing distances caused by conflict in the Red Sea.
Volume and sailing distance provides further important context to the previously highlighted relationship between ship size and carbon emissions.
Conflict in the Red Sea caused sudden increases in transit times on services that would ordinarily transit the Suez Canal. The most cost-effective way for carriers to plug these gaps was by utilizing the biggest ships possible on these trades.
While protecting the climate was not the primary driver for carriers’ strategy, it explains why larger ships account for a higher percentage of total emissions, despite being more energy efficient.
Transport work
The actual demand placed on the global container shipping fleet can be measured through ‘transport work’ – which is the tons of cargo carried multiplied by the number of nautical miles it is transported.
In ‘normal’ operating conditions, when the average distance containers are moved remained quite stable, growth in transport work tends to track closely to growth in tons of cargo.
This year, the record high demand is in addition to increases in average sailing distance due to the conflict in the Red Sea, meaning transport work for the global fleet is up 13.8% in the first 10 months of 2024 compared to 2023.
Comparing October 2024 with October 2023, the transport work undertaken by ships between 14 500 TEU and 20 000 TEU has increased 49%, while ships of 20 000 TEU and over have seen a 23.4% increase.
The growth for both of these ship types means they have already completed more transport work in the first 10 months of 2024 than they did for any previous full calendar year.
Increases in fleet size and sailing speed
The primary driver for increasing transport work in 2024 is record high volumes and sailing distances, but increases in global fleet capacity must also be noted.
For example, total capacity provided by ships between 14 500 and 20 000 TEU increased 28.1% between October 2023 October 2024 to stand at 4.3m TEU. This has been critical to meet the very high increase in transport work of 49% during this period.
However, purely having a larger fleet has not been enough to cater to the sudden higher demand for transport work, with carriers having to take some additional operational measures.
An obvious lever to pull is increasing sailing speed to plug gaps in schedules caused by longer transit times.
The average sailing speed of ships between 14 500 and 20 000 and those over 20 000 are up 6.9% and 5.1% respectively compared to the first 10 months of 2023.
The latter have sailed with an average speed of 16 knots or more in three separate months so far in 2024, peaking at 16.2 knots in September. For context, the last time these ships average more than 16 knots in a month was June 2022 when higher rates were still incentivizing carriers to speed up.
Average speeds for the whole fleet peaked at 14.2 knots in August. Despite falling since then, over the first 10 months of the year the average speed is still 2.1% higher than it was in the same period of 2023.
Sailing speed has a more than proportional impact on fuel consumption, therefore the increased average speeds in 2024 have contributed to the higher carbon emissions.
More nautical miles covered per day
While longer sailing distances increase transport work, it also means ships spend proportionally more time at sea, rather than in and around ports. Coupled with increased sailing speed, more time spent at sea means ships cover a higher average number of nautical miles per day.
For example, in the first 10 months of 2024, ships over 20 000 TEU have seen a 5.5 percentage point increase in the time they spend steaming compared to full year 2023.
This has led to the average nautical miles covered per day across the whole fleet rising to 235nm per day in October, a 6.7% increase from October 2023.
As with other factors, a much higher increase was recorded for ships between 14 500 and 20 000 TEU as carriers used these ships to plug the gaps on trades most impacted by the Red Sea diversions. In the first 10 months of 2024 these ships covered 258 nautical miles per day, which is a 16.1% increase from a year ago. The distance peaked at 270 nautical miles per day in February and April.
Ships over 20 000 TEU peaked at an even higher 280 nautical miles per day in January and September. By October they were back down to 255nm, but this still represents an 8.4% year-on-year increase.
Small ships haven’t seen any substantial changes in their average sailing distance. For example, ships of between 3 000 and 5 000 TEU are only averaging an extra 1.5 nautical miles a day compared to October 2023.
While there have been some adjustments for much smaller ships due to the Red Sea conflict, it has mainly been increasing use of feeder services into the eastern Mediterranean to allow a quick turnaround for their large deep-sea ships at the larger ports in the west Mediterranean, such as Barcelona.
Emissions up, but the container fleet more efficient than ever
It may seem contradictory given the increase in total emissions, but container ships have been operating with greater carbon efficiency than ever before in the first 10 months of 2024.
In this case efficiency is defined as grams of CO2 per transport work (transport work = ton*miles).
Between January and October 2024, container ships emitted an average of 11.9 grams of CO2 per ton-mile. Prior to 2024, fleet-wide efficiency had never dropped below 12 grams, which has happened in seven months so far this year.
These record low efficiency scores can be attributed to
cleaner engine types, bigger ships with lower emissions on a per cargo basis and carriers brining cleaner fuels into the mix.
There is a substantial spread in the efficiency of container ships by size, with the 20 000+ ships averaging 10.6g of CO2 per ton-mile, while ships under 1 000 TEU are at 26.8 grams.
However, in October 2024, the most efficient ships were not the biggest as one might expect. Instead ships between 14 500 to 20 000 TEU were most efficient at 8.9g of CO2 per ton-mile.
The difference? The utilization of the biggest ships has fallen over the past few years.
Until August 2023, ships over 20 000 TEU had a higher utilization rate than the 14 500 to 20 000 vessels. However, there is now a 5 percentage point difference between the two in favor of the smaller ships, meaning they are now operating more efficiently than the larger ships.
Regulation
When it comes to regulation on de-carbonizing the fleet, efficiency is a key measure used by the International Maritime Organization (IMO).
For the Carbon Intensity Indicator (CII), which came into force in 2023, instead of using the actual tons carried to measure efficiency, the IMO uses the design capacity of the ship. This has led to criticism in the industry as, though it measures changes in nautical miles covered, it doesn’t take cargo carried into consideration.
In an extreme case you could have a ship sailing around the world without cargo scoring a very low (and therefore good) CII score.
The IMO’s target of net zero by or around 2050 seems ambitious given the current carbon emissions across container shipping. While there may be arguments over how ‘efficiency’ is measured, stakeholders need to work together to reduce carbon emissions.
This report has been produced by Xeneta in partnership with Marine Benchmark www.marinebenchmark.com
Marine Benchmark develop interactive marine intelligence tools and reports that provide valuable insights for businesses in the maritime sector. Marine Benchmark partner with leading data providers, such as S&P Global holding the global IMO ship register and use data from Equasis, ECMWF and NOAA, to create solutions using the full width and depth of the best possible maritime data available.