Do higher fuel prices lead to greener shipping behaviour?

Many policy-makers in the European Union (EU) and the International Maritime Organization (IMO) argue that the higher prices that result from emissions pricing and fuel standards will lead to energy efficiency improvements and emissions reduction.

T&E commissioned CE Delft to study the relationship between fuel prices and technical and operational efficiency over three decades to find out to what extent shipping companies behave more efficiently either by ordering more efficiently designed ships or by operating more efficiently (using sailing speed as a proxy).

While the novel analysis on technical efficiency shows that shipping companies order slightly more efficient ships as a result of higher fuel prices (albeit with a time lag of around 6 years), the analysis found no clear relationship between higher fuel prices and better operational efficiency.

The results suggest that the only way to ensure energy efficiency improvements is with bespoke action. Policy-makers in the EU, IMO and other regions should therefore ensure their policy measures to reduce shipping emissions include concrete, explicit measures to improve energy efficiency.