Fuel (energy) cost and climate change

In shipping, fuel management is an important part of a shipping company’s activities since a significant proportion (more than 30%) of a ship’s operational costs are related to fuel costs. Figure (a) below shows typical costs for a tanker; showing high percentage of fuel cost in the overall ship’s operational costs. Figure (b) below shows similar data for containerships but includes total cost inclusive of capital costs. Both show high percentage of fuel cost in the overall ship’s operational or total costs. The numbers presented are typical and percentages are a function of the ship type, ship size, bunker fuel prices as well as mode of operation of the ships (MariEMS 2017).

Figure 16: Typical ship costs and fuel costs (MariEMS 2017).

Climate change: Apart from ship costs, the issue of environmental impact of shipping has been under scrutiny for a number of years. An estimate of the total emissions of exhaust gases from ships that can be attributed to international shipping was made by the IMO and indicated to be at 2.2% of global man-made GHG emissions in 2012 accordingly to IMO Third GHG Study 2014. Also, it was shown if no action takes place, the shipping GHG emissions will increase by 50% to 250% by 2050. This level of growth in shipping GHG emissions is not acceptable by the international community. Thus a way must be found to reduce shipping GHG emissions much below current day levels. The question of feasibility of reducing shipping fuel consumption has been the subject of numerous studies in the past 15 years. All studies show that on a wider scale, it is possible to significantly reduce the shipping fuel consumption and GHG emissions. (MariEMS 2017).