Sanctions and Missile Attacks Are Hindering Efforts to Cut Shipping Emissions

• Sanctions on Iran, Venezuela, and Russia are forcing these countries to use a growing shadow fleet of oil tankers.
• The rerouting of ships around Africa due to the Red Sea crisis has also increased fuel consumption.
• The lack of long-term regulations for cleaner fuels then discourages ship owners from switching fuels.

The shipping industry is one of the biggest targets for decarbonization planners. As such, it has also been the target for pointed efforts to reduce its fuel consumption—and the emissions that go with it. Lately, however, this has become harder because of other actions by those same planners who want cleaner maritime transport.

Ships, which represent as much as 90% of global trade, consume massive amounts of fuel, and the overwhelming bulk of that fuel is derived from hydrocarbons. The International Maritime Organisation, under pressure from transition-oriented governments, recently approved rules that lower the sulfur content of bunkering, but this has not been seen as enough by those same governments and their NGO advisers.

Meanwhile, some of those concerned governments are making decisions that are, inadvertently, leading to higher emission levels greater risk of fuel spills. For instance, the Red Sea crisis diverted most of the traffic from the Suez Canal to the Cape of Good Hope. The diversion around Africa adds 4,000 miles to the average ship’s journey between Europe and Asia. This means a lot more additional fuel consumption, too.

Perhaps it would be possible to argue here that the consequences of the Houthis’ attacks on ships in the Red Sea were not a result of conscious action on the part of governments in Europe and the United States. However, a counterargument could be made that these governments could have made more of a diplomatic effort to end the war between Israel and Hamas.

Yet, while the Red Sea crisis situation is open to interpretation, this is not the case with sanctions on Iran, Venezuela, and Russia. The pointed punitive action by Washington and Brussels has forced oil exporters in the three countries to use tankers that have no link to any Western business entity—and with that, lower-quality bunkering.

Reuters recently reported, citing Lloyd’s List Intelligence, that the so-called dark fleet that transports Iranian, Venezuelan, and Russian oil has grown from 530 tankers a year ago to some 630 tankers to date. These 630 tankers represent 14.5% of the global tanker fleet, and some of them are, according to experts, a disaster waiting to happen.

Tankers carrying sanctioned oil, a Lloyd’s List Intelligence analyst told Reuters, use the cheapest fuel possible, and this is also the dirtiest fuel around. After all, they are a shadow fleet, which suggests a certain degree of disregard for rules that are not in their operators’ interest. Ports, however, have the power to enforce these rules, and as a result, ship detentions for the use of high-sulfur fuel have increased in Europe.

This would suggest there is still a way to enforce cleaner fuels on those parts of the shipping industry that don’t feel they are bound by the new rules, yet the high-sulfur fuel is not the only problem with the shadow fleet. The risk of spills during ship-to-ship transfers in the open sea is also significant. It is also a direct effect of sanctions aimed at stifling the oil industries of the target countries.

There is more, too. Even for shipping companies that do not deal in sanctioned oil, the IMO’s ambition to have cleaner maritime transport is a challenge. Because there does not seem to be a long-term regulatory framework that would motivate ship owners to switch their ships to cleaner fuels.

Methanol, ammonia, and LNG have all been touted as alternatives to petroleum-derived bunkering, but their use requires retrofitting existing vessels with new fuel delivery systems or building all-new vessels that run on one of these fuels. The problem with this is that none of these fuels are being produced at the scale necessary, and none have proved their worth over a longer period of time. As a result, ships keep burning “dirty” fuels to keep global trade going. This is unlikely to change anytime soon, too. Unless all sanctions are lifted, which is highly unlikely.

By Irina Slav for Oilprice.com

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