Freight Efficiency Key to Reducing Carbon Impact

Opinion Focus

Transportation accounts for almost a quarter of global CO2 emissions.
But shipping is one of the most efficient means of transportation.
If the same volumes were transported by air freight, trucking or even rail, emissions would be far higher.

As COP27 wraps up, we take a look at the CO2 emissions in the transportation sector. The pressure has been on to reduce harmful emissions in the sector for many years. In reality, marine transportation is one of the most environmentally friendly when taking into account the volume of goods transported.

Transport One of High Carbon Emitters

The transportation sector is often pinpointed as a high carbon emitter. In 2018, transportation, including passenger transport, was responsible for 8 billion tonnes of CO2 emissions, which equates to almost a quarter of all CO2 emissions from energy.

So how does each mode of transport fit in? By far the largest emitter is passenger road transport, followed by road freight and aviation. Despite the huge volumes it carries each year, shipping accounts for a comparatively low share of emissions.

Source: Our World in Data

All Vessels Are Not Created Equal

The majority of absolute emissions in the shipping industry are made up by bulk carriers, but this is not necessarily the full story.

Source: Fourth IMO GHG Study 2020

First of all, bulk carriers make up the majority of the global fleet, accounting for almost 43% of the total dead weight tonnes in operation, so it makes sense that they emit more.

Secondly, bulk carriers are much more efficient than many of their counterparts in terms of their CO2 emissions per tonne mile sailed, as shown below.

Source: Fourth IMO GHG Study 2020

In fact, the larger bulk carriers are some of the lowest emitters when we also consider their tonnage capacity and the miles sailed.

Fleet Efficiency Improves

The entire fleet is much more efficient than it was 15 years ago. The Energy Efficiency Operational Indicator, as calculated in the IMO’s Fourth GHG Study measures the CO2 emissions for each tonne of cargo that travels one nautical mile.

Source: Fourth IMO GHG Study 2020

So, although total emissions levels in shipping haven’t shown an improvement, the lower EEOI shows that this is likely due to higher freight capacities and longer voyage durations. When considering these factors, emissions have improved since 2018 for bulk carriers, containers and general cargo ships.

Source: Fourth IMO GHG Study 2020

Concluding Thoughts

Although marine transportation has a large footprint, new alternative fuels mandates are helping to reduce CO2 emissions.
However, it is by far the most efficient way to transport goods on a large scale.
If the same volumes were transported by air freight, trucking or even rail, emissions would be far higher.

However, this also means that sailings below capacity greatly increase the environmental impact of shipping.
Ocean liners need to keep a close eye on availability as consumer demand wanes.
Regulatory measures taken to use cleaner fuels will also make the shipping industry more efficient beyond 2023.

Sara Warden

Sara joined CZ in 2021 as a commodity journalist after a brief period covering commodities and leveraged finance at several London-based new outlets. In the four years prior, Sara lived in Mexico City, where she worked as a bilingual journalist and editor across several key industries, including mining, oil and gas, and health. Since joining CZ, she has led the creation of general interest content that uses data to present key trends, with a focus on attracting a new, broader audience base. She graduated from the University of Strathclyde in 2014 with joint honours in Journalism and Spanish and is currently studying a Master’s in Food Policy.