Sea freight costs will significantly increase due to new environmental regulations

The entry into force of new EU environmental regulations aimed at decarbonization of shipping will significantly increase the costs for carriers and cargo shippers in the next three years, Drewry reports.

Starting in 2024, the European Union will impose a levy on CO2 emissions from ships, and presumably from 2025 there will be a tax on conventional marine fuels.

Drewry calculated how these measures would affect the cost of shipping operations on the Asia–North Europe route, one of the most sought-after routes in global trade.

The analyst estimates that operators’ bunkering and related exhaust costs per 40-foot container for ships operating on low-sulfur VLSFO fuel oil will increase from the current $312 to $568.

For ships running on green fuels, such as methanol, the cost would be about $458 per FEU.

It means that stricter environmental regulations will lead to a noticeable increase in costs for carriers and, consequently, for cargo owners. Many cargo owners have informed the Drewry that carriers are already preparing to add a clause to their contracts that would directly charge the shipper additional costs associated with adopting the new regulations.