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Conflict between climate policy objectives and transfer goals

06 August 2020

According to a new report from Trafikanalys the instruments required to achieve the climate goals in the area of shipping strongly challenge the possibilities of achieving a transfer of goods from road to shipping. The report also states that the new higher valuation of carbon dioxide strengthens the goal conflict.

According to Sweden's national freight transport strategy, a transfer of freight transport from road to shipping must be promoted. One reason for this is that shipping is a type of traffic without congestion, but also that it is relatively efficient in terms of environmental emissions per tonne-kilometer. However, updated calculation methods of shipping's fuel consumption have led to a revaluation of the industry’s emissions. This has led to shipping's estimated external marginal costs per tonne-kilometer for both carbon dioxide and other emissions are significantly higher now than last year, writes Trafikanalys in the report Svensk sjöfarts internationella konkurrenssituation, published in July.

In the autumn of 2019, the Swedish Transport Administration also decided to increase the standard cost for the social, external marginal cost of carbon dioxide emissions - from SEK 1.14 per kg of carbon dioxide to SEK 7 per kg of carbon dioxide. Together with shipping's updated, higher, marginal costs for carbon dioxide and emissions per tonne-kilometer, this means means that shipping's estimated degree of internalisation, ie the extent to which one pays its external environmental costs through taxes or fees, is significantly lower than before.

Research has previously shown that today's instruments are not sufficient for shipping to reach its environmental and climate goals. The required instruments would probably lead to higher transport prices for shipping, which would challenge the possibilities of achieving a transfer. Therefore, there is a goal conflict between the government's climate policy and the goal of an increased transfer of goods to shipping.

“Shipping may need to raise its prices to repay loans and compensate for its losses during the corona pandemic. This may affect the transfer of freight transport to shipping”, Björn Olsson, one of the authors of the report, says in a press release.

The report have a major focus on the outbreak of the coronavirus. The pandemic has impacted shipping severely. Traffic, particularly passenger traffic, to Swedish ports has decreased, ship owners are sustaining major losses, and many seamen have been laid off or are unemployed. Statistics on the openly unemployed indicate that, during the spring of 2020, unemployment was up among most categories of seamen.

"In 2019, the number of ships in the Swedish merchant fleet increased, but how many ships will survive the corona crisis is unclear. Shipping companies may need to scrap or sell vessels to cover losses", Björn Olsson says.

Read the report (Swedish)

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