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The volume of global seaborne trade is projected to grow by 2.4% in 2023, after contracting by 0.4% last year, according to the United Nations Conference on Trade and Development (UNCTAD).

In 2022, containerised trade declined by 3.7%, but is expected to increase by 1.2% in 2023 and grow by over 3% between 2024 and 2028, though this is below the last three decades’ long-term growth rate of around 7%.

But while decarbonisation remains a focus of the agency’s latest Review of Maritime Transport, much like last year’s report, ship emissions rose in 2022.

The amount of carbon dioxide emitted by vessels was higher in 2022 than in 2012 for the top 10 emitters by flag of registration, with the exception of Panama.

When ranked according to economies of ownership, emissions were similarly higher in 2022 than 2012 for the top 10 countries, aside from Germany.

The International Maritime Organization (IMO) is in the process of rolling out a range of strategies to reduce greenhouse gas (GHG) emissions, chief among these being the transition to cleaner fuels, but the report says that meeting these goals is still a challenge.

“The shipping industry faces uncertainty in determining the most effective way to reduce carbon emissions and transition to lower or zero-carbon fuels,” it says.

“Carriers need to modernise and renew their ageing fleets and switch to low carbon whilst being unclear about the best alternative fuels and green technologies.”

In July, the IMO announced its revised GHG targets, with net zero due to be achieved “by or around” 2050.

According to UNCTAD, it will cost between US$8bn and US$28bn more each year to decarbonise ships by 2050, while an extra US$28bn to US$90bn annually will be needed to develop infrastructure for fully carbon-neutral fuels.

“Full decarbonisation could elevate annual fuel expenses by 70% to 100%, potentially affecting small island developing states and least developed countries that heavily rely on maritime transport,” the report notes.

Currently, nearly 99% of the global fleet continues to rely on conventional fuels, UNCTAD says, though 21% of vessels on order are designed to be compatible with alternative fuels.

The IMO is mooting the introduction of mid-term GHG measures in the coming years, such as an emissions levy, which could then be used to fund adaptation measures for vulnerable economies.

“Economic incentives, such as levies or contributions paid in relation to shipping emissions may incentivise action, can promote the competitiveness of alternative fuels and narrow the cost gap with conventional heavy fuels,” says Shamika N. Sirimanne, UNCTAD’s director of technology and logistics.

UNCTAD notes that importers could face further red tape in the form of the carbon border adjustment mechanism, due to come into force on 1 October, which charges an import tariff on carbon-intensive goods entering the EU and requires border agencies to report emissions for products.

“These new carbon mechanisms could change the trade facilitation process and increase compliance procedures prior to customs clearance,” it says.

The report also shows that oil and gas trade volumes experienced “robust growth” in 2022, rising by 6% and 4.6% respectively.

Russia’s war with Ukraine prompted oil cargo distances to hit a record high in 2022, while grain shipments in 2023 have travelled “further than in any year on record”, as importing countries have sought out alternative exporters like the US and Brazil.

UNCTAD also flagged the UK’s recent adoption of the Electronic Trade Documents Act, which it says is expected “to reduce delays across global trading networks”.