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SAFETY4SEA

T&E: Running ships on renewable hydrogen has little impact on consumer goods price

by The Editorial Team
June 28, 2022
in Fuels
hydrogen production with plastic waste

Credits: Shutterstock

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Running ships entirely on green hydrogen-based fuels (e-fuels) would add less than €0.10 to the price of a pair of trainers and up to €8 for a refrigerator, a new study on the cost of decarbonising European shipping shows.

Transport and Environment (T&E) made an analysis of shipments from Shenzhen in China to Europe, debunking claims by the shipping industry that ambitious measures to green the industry will be prohibitively expensive and cause exorbitant price hikes for consumers.

Faig Abbasov, shipping director at T&E, specifically said:

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Green shipping would add less than 10 cents to a pair of Nikes. This is a tiny price to pay for cleaning up one of the dirtiest industries on earth. In a year where shipping companies are making bigger profits than Facebook, Google, Amazon, and Netflix combined, it is right to question whether shipping companies are doing enough

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The study also shows that even in the most extreme case of a ship running on 100% green fuels, prices would not rise significantly. That is if wealthy cargo carriers were to pass on the costs to consumers. This reflects the economies of scale in global supply chains that are not hyper sensitive to shipping fuel costs.

European policymakers, who are currently voting on two key proposals to clean up shipping, should be emboldened by this, says T&E. The first is a historic extension of the carbon market to shipping which was backed last week in the European Parliament and is now in the hands of national governments. The second is a shipping fuels law which will be voted on in July.

Using the EU’s existing proposal to charge carbon pollution from ships, combined with the proposal to mandate small amounts of green e-fuel use by 2030, T&E analysed what effect this would have on container shipping prices and consumer goods coming from China.

In the worst case scenario, cargo companies would face increased transport costs of 1% to 1.7%. However, on an itemised basis, the price of consumer products would barely budge. A pair of trainers would cost just €0.003 more, a television €0.03 and a refrigerator up to €0.27 more.

A decade ago, the only hope of decarbonising shipping was halting global trade itself. Now we have the technology, but what is lacking is a market signal for green hydrogen producers. As a world leader in shipping, the EU should set an ambitious green e-fuel mandate that guarantees hydrogen fuel suppliers a market

Faig Abbasov, concluded.

EXPLORE MORE AT T&E’S ANALYSIS

T&E: Running ships on renewable hydrogen has little impact on consumer goods priceT&E: Running ships on renewable hydrogen has little impact on consumer goods price
T&E: Running ships on renewable hydrogen has little impact on consumer goods priceT&E: Running ships on renewable hydrogen has little impact on consumer goods price
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