Record high carbon emissions in ocean container shipping in Q3 2024

The carbon emissions index (CEI) by both, which measures carbon emissions across Xeneta’s top 13 ocean container shipping trades, hit 107.9 points in Q3 2024, the highest on record and up by 12.2 per cent compared to a year ago before the Red Sea crisis.

The CEI is based on Q1 2018, meaning any reading above 100 indicates carbon emissions per tonne of cargo carried are above levels from that period.

Q3 2024 is only the second time the 100-point mark has been breached, with the first time being Q1 2024 in the immediate aftermath of escalation in the Red Sea, a Xeneta release said.

In Q3 2024, six of the 13 trades were below the 100 point benchmark, indicating a lowering of emissions per tonne of cargo carried compared to Q1 2018, while seven scored above 100.

The effect of the Red Sea crisis on the CEI is most clearly seen in a year-on-year (YoY) comparison, with the four trades most affected by diversions around the Cape of Hope seeing emissions increase by more than 30 per cent in Q3 2024 compared to Q3 2023 (the two fronthauls and two backhauls connecting the Far East with North Europe and Mediterranean).

The biggest YoY increase is found on the Far East to Mediterranean trade, up by 60.1 per cent, while the backhaul is up by 46.3 per cent.

However, the trade from North Europe to South America East Coast has also seen a YoY CEI increase of more than 30 per cent in Q3 2024, despite not transiting the Red Sea and Suez Canal.

Conversely, five trades have seen lower emissions compared to Q3 last year—and unsurprisingly these are trades not impacted by longer sailing distances around Africa. The backhaul from the US East Coast to the Mediterranean has seen by far the biggest YoY drop in Q3 2024—down by 26.5 per cent.

Emissions on the fronthaul from the Far East to Mediterranean (the trade with the biggest YoY increase) actually fell by 3.5 per cent quarter-on-quarter (QoQ) in Q3 to 140.6 points (the backhaul increased a further 10 per cent in Q3 to 164.3 points).

The biggest QoQ increases in Q3 2024 are found on backhaul trades unaffected by the Red Sea diversion. Most notably, emissions have increased by 40.3 per cent from the US West Coast to Far East and 19.7 per cent from the US East Coast to North Europe.

The deterioration on the trans-Atlantic backhaul is partly due to a 1250 TEU decrease in the average capacity of ships deployed on this trade, with smaller ships being less efficient when it comes to carbon emissions.

Another reason for higher emissions on backhaul trades is an increase in speed as carriers rush to get their ships back for their next scheduled sailing. Several trades have seen average sailing speed reach multi-year highs.

Reducing carbon emissions falls down the priority list at times of increasing congestion, tightening capacity and spiralling freight rates. When shippers are scrambling to secure capacity and carriers are financially incentivized to provide it, carbon reduction is not front of mind for either party, the release noted.

Falling filling factors is also leading to higher emissions per tonne of cargo carried. This is largely due to a deteriorating trade balance, with exports from Europe and the United States back to the Far East growing at a much slower rate than volumes on the fronthaul leg.

The fronthaul and backhaul trades between the Far East and Mediterranean stick out as the worst performing trades in 2024 and serve as good example of why the Red Sea crisis affects carbon emissions, it added.

Fibre2Fashion News Desk (DS)