July 17th, 2025 – Compared to 2024, ocean carrier emissions (in early 2025) increased by nearly one-fifth due to container traffic diverting around southern Africa to avoid the ongoing instability of the Red Sea. Despite ocean carriers’ strides to improve fuel burning and ship utilization, the most recent attacks in the Red Sea have discouraged hopes of any return to the more fuel-efficient Suez Canal route in 2025.
First quarter greenhouse gas emissions (GHG) increased 19.38% year-over-year to just shy of 60 million tons [according to VesselBot]. Emissions from container trade linked to Europe surged by 45% in 2024 compared to 2023, EU data indicates.
The shift to the southern Africa route for Asia-Europe trade began in late 2023 following Houthi attacks on commercial vessels. The route is 30% longer than the Suez Canal passage, extending transit times by 10-12 days, tying up as much as 10% of global container capacity and keeping shipping rates elevated.
Amid growing pressure to cut carbon emissions, the Red Sea crisis has pushed container ships onto longer routes, causing a spike in emissions equal to Cambodia’s annual total.
Industry leaders are placing responsibility for the higher emissions solely upon the Houthis, emphasizing their actions have effectively undone years of progress by container lines to cut carbon emissions from shipping.
However, as container shipping emissions rise, carriers rerouting around Africa are working to improve efficiency by slowing down, lowering average emission intensity, and maximizing vessel capacity.
The rise in shipping emissions is set to hit European cargo owners financially as the EU continues rolling out its climate regulations, including the Emissions Trading System (ETS) and the FuelEU Maritime initiative.
Under the ETS, carriers are now taxed on 40% of emissions for voyages starting or ending in the EU—a share that will increase to 70% in 2026 and reach 100% by 2027. Meanwhile, starting January 1, the FuelEU Maritime regulation will impose limits on the yearly average greenhouse gas intensity of energy used by ships calling at European ports, beginning with a 2% reduction by 2025 and scaling up to an 80% cut by 2050.
To manage compliance, many carriers have begun combining the ETS and FuelEU costs into a single fuel surcharge. While this may simplify billing, it has stirred frustration among shippers, who feel there’s a lack of transparency in how these costs are passed down. Many question why they’re being charged not only for regulatory compliance but also for the operational costs of adopting new technologies. This disconnect is straining trust, making it harder for carriers and customers to work together toward shared environmental goals.
Trans-Border will continue to monitor the situation and advise customers accordingly. Should you have any questions, send us an email or give us a call at 518-785-6000. Â
