A surge of attacks on ships in the Red Sea is causing shippers to reroute their vessels, increasing CO2 emissions. With supply chain disruptions already challenging companies, rerouted journeys further complicate emission reduction efforts. As companies navigate various global disruptions, including the Red Sea conflict, they must intensify emission-cutting initiatives to meet climate goals.
Delays and emissions surged as vessels detoured around the Cape of Good Hope, with some journeys emitting 38% more CO2. The Red Sea crisis led to over 600 ships being rerouted, contributing to increased emissions and costs. Companies are now facing longer shipping routes, higher costs, and potential environmental taxes, which could strain their sustainability efforts.
What’s at stake?
Longer shipping routes are threatening companies dependent on sea transport, leading to higher Scope 3 emissions and potential consumer backlash. The Red Sea crisis is exacerbating emission levels, pushing some companies to consider nearshoring for emission reduction and cost savings.
Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea in this photo released Nov. 20, 2023.
Houthi Military Media / via REUTERS
Costs at sea
Shipping costs are increasing due to longer routes, prompting some companies to consider air or truck transport, which are more carbon-intensive. The potential implementation of an emissions levy on shippers could further raise costs and impact emissions.
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