Riyadh emerges as a global business hub, offering competition to its regional rivals

LONDON: The global shipping industry will need $ 2.4 trillion to reach net zero emissions by 2050, including around $ 500 billion by 2030, analysts estimate.

“Certainly, European banks at least and not far behind American banks will have to meet criteria that satisfy sustainable finance,” said Tony Foster, managing director of specialist asset manager Marine Capital.

“When it comes to new assets, it will be more and more difficult to finance anything that is not fully eligible and it will be the same, perhaps even more so, with existing assets.”

Ocean freight costs are expected to remain high in 2022, as investors and regulators scramble to accelerate decarbonization of the shipping industry and businesses grapple with green finance, sources say.

Darren Maupin, founder of senior fund manager Pilgrim Global, said companies in the shipping industry were grappling with how to get funding with more ESG pressure.

“The industry has a much reduced capacity to build ships and the limited capital available to do so. A simple supply-demand suggests that rates are going to be higher and that the industry will have to generate more capital to finance itself. “

Shipping, which carries around 90 percent of global trade and accounts for nearly 3 percent of global CO2 emissions, is under increasing pressure from environmentalists to take more concrete action, including a carbon tax.

The International Maritime Organization, the UN’s specialized maritime agency, said it has made progress on short-term greenhouse gas reduction measures.

But this timeline is not considered quick enough by environmentalists and a number of IMO’s 175 member countries.

“At the MEPC (IMO committee) meeting in June next year, there will be a lot of heat and pressure on regulators to ensure they are ready to negotiate a solution rather than kick the box due to misalignment or negotiating tactics. This is really not acceptable, ”said Christian Michael Ingerslev, Managing Director of Maersk Tankers.

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