Despite booming stocks and rising profitability not everything is hunky dory for container shipping lines. The sector is either already facing or about to face higher costs as highlighted below.
Apart from their individual R&D and capex decisions, carriers are likely to face new expenses related to the wider shipping industry’sefforts to decarbonise operations.
The European Commission has chalked out a strategy for decarbonising shipping. In pursuant to this, the commission announced on
14 July 2021 its proposal to gradually introduce shipping into its Emissions Trading System (ETS), a carbon market that operates in all
EU countries with the aim of achieving climate neutrality in the EU by 2050. The system operates under a ’cap and trade’ principle that
currently applies to GHG and CO2 emissions. It works by capping overall GHG emissions of all participants in the system which is then
reduced over time.
Carbon emitters are obligated to pay for each tonne of CO2 they generate using EU allowances (EUAs). Such allowances are described
as rights to emit GHG emissions equivalent to the global warming potential of 1 tonne of CO2 equivalent. The level of the cap determines
the total number of allowances available in the whole system which can be traded among ship owners.
To this respect, starting in 2023, 100% shipping emissions from intra-EU voyages and 50% of carbon emissions on a voyage to or from
a port in the EU will be included in the ETS.
Drewry, since 1970, has been providing research and advisory services on the global Maritime and Shipping industries and has established itself as a firm with long history of credibility and expertise on various aspects of the maritime industry. Leveraging this in-depth market knowledge and understanding, we have extended our offering to deliver a unique, independent investment research service on globally listed companies operating in the maritime industry. Under the brand Drewry Maritime Equity Research and in accordance with the FCA, DMER led by Rahul Kapoor and his team, offers fundamental analysis on listed companies. DMER analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. By combining these market-leading resources with seasoned sector expertise and commercial awareness, we are able to offer a highly differentiated and comprehensive investment research service to prospective investors in listed maritime companies. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.
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