Many shipping companies hesitate to go green

Financial risks and uncertainty regarding technology and fuel make many shipping companies hesitate to make green investments. This according to the Swedish Transport Agency's report Kalkylen måste gå ihop.

Shipping should at least halve its greenhouse gas emissions by 2050. And even if there is a will, it´s easier said than done. Adjusting costs. Shipping companies have the greatest potential to reduce their emissions when they have to replace old vessels with new ones, which usually costs hundreds of millions of kronor, and if they also want to go green, it will be even more expensive.

“Most of these measures are costly and the one who has to pay the bill at present is the shipping companies themselves. This risks delaying the adjustment of shipping", says Erika Persson, at the Swedish Transport Agency in a press release.

In the report Kalkylen måste gå ihop, the shipping companies give their view on the financing possibilities in the work towards a more climate-friendly shipping. A total of 15 different shipping companies, based in Sweden or which have a significant part of their operations on routes to and from Swedish ports, have participated in the report. They run cargo ships, tankers, passenger ferries, archipelago boats and ships with container and dry cargo.

According to several of the shipping companies, regulations and economic instruments are the main way to go to minimize financial obstacles. In addition, these should be global and equal for all to give the best effect.

“Profitability is the main driving force for shipping companies to switch to more climate-friendly shipping. But environmentally friendly technology or fuel is significantly more expensive than conventional counterparts, at the same time as there is a lack of willingness among transport buyers to pay more for climate-friendly transport”, says Erika Persson.

Several shipping companies also believe that covid-19 has resulted in a reduction in the economic scope for climate investment. New construction of ships has been postponed and the uncertainty about what will happen in the future means that several shipping companies are waiting to make decisions about green investments. However, many of the shipping companies believe that their long-term plans for conversion have not been affected by the pandemic. Several also mention that a change still seems to be underway in the industry and that interest in greener shipping has increased among customers in recent years.

Read the report (in swedish)