Following the Gaza war, that began 7th October 2023, Iran-backed Houthis started attacking ships in the Red Sea, especially ships that had any connection with Israel or it allies. From late October 2023 throughout the first quarter of 2024 the Houthi rebels reportedly attacked more than 60 ships with missiles and armed drones.
The Red Sea crisis led many shipping companies to divert vessels away from the route through the Suez Canal. According to the Suez Canal Authority (SCA) ship transits through the canal decreased by 50% from around 26,400 in 2023 to 13,200 in 2024. Most of the large container shipping companies diverted their ships around the Cape of Good Hope to avoid security risks, while many tankers and bulk carriers continued to use the strait as contracts and affiliations are often different to the box ships. Consequently, most container ships sailing from Asia to Europe added a major detour, significantly increasing their fuel use and GHG emissions.
Depending on the ports for departure and arrival, a detour around the Cape of Good Hope typically adds more than 30% of sailing distance. With container ships sailing longer, spending more time on each voyage, the daily rates for container ships spiked in 2024. This again encouraged ships to sail faster to make up for lost time, further increasing emissions. The relationship between speed and fuel use for ships is highly nonlinear. In theory, if a ship doubles its speed, fuel use increases eight times.
Looking specifically at container ships sailing between a European and a non-European port, known as an Extra-EU voyage, emissions ballooned year-on-year. According to EU reported data, emissions from Extra-EU containership voyages came in at 42 Mt in 2024, a whopping 62% increase (26 Mt) year-on-year, details shown in table 1. For comparison, emissions for containerships sailing between two European ports, known as Intra-EU voyages, were virtually unchanged in the same period. Throughput data from the Port of Rotterdam, Europe’s largest port, show that the number of containers increased by 2.8% (TEU) from 2023 to 2024.
(*EU ETS scope includes 50% of Extra-EU emissions, and all of Intra-EU emissions. MRV data reported to EMSA. 2023-data for comparison, as shipping was first included in EU ETS scope in 2024.)
Still, the effect on the demand for EUAs is much more muted as container ships only have to surrender allowances to cover 20% of emissions for Extra-EU voyages for 2024 emissions (shipping companies only have to cover emissions for 50% of extra-EU voyages, and only for 40% of this again for 2024 due to of the gradual phase-in to the EU ETS).
Two years after the war began, a fragile ceasefire became a reality. Shipping companies have previously hinted at the possibility of sailing through the Red Sea again, should the conflict deescalate. If container ships resume sailing through the Red Sea, global emissions from container traffic could decrease for several reasons related to routing efficiency and lower speed.
So far, no large container company like Maersk or MSC has confirmed an intention to revert to the Suez Canal route, but recent news stories suggest they are monitoring and assessing the situation.
As we approach the end of 2025, even imminent rerouting would come too late to have much effect on this year’s emissions from container ships. Given that ships have been continuing to sail around Good Hope, emissions are likely to stay high for Extra-EU voyages for this year as well.
Recently published data from the Port of Rotterdam show that the container segment increased by another 3.0% in the first nine months of 2025. This is not necessarily the case for all European ports, but it gives an indication of sustained growth in the segment. It also gives an indication that all the noise around US tariffs in 2025 has little effect on supply chains to and from Europe.
For 2025, we expect container ships emissions to come similar to last year. The huge spike in containership voyage emissions compared to the modest rise in the number of containers processed at the final port clearly suggests the added emissions are due to longer and faster voyages.
Next year will be the first year in which shipping companies must surrender EUAs to cover 100% of emissions within the EU ETS scope. A more stable situation in the Red Sea would be advantageous for reducing emissions from container ships, a segment that constitutes around a third of all shipping emissions in the EU ETS in 2024.
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