Since November, Houthi rebels based in Yemen, have been targeting vessels sailing from Asia and the Middle East to Europe in retaliation for the war in Gaza. According to US officials, the rebels have launched more than 45 attacks against commercial ships navigating the Suez Canal.

As a result, the conflict in the Red Sea has forced commercial ships to divert their course and sail around South Africa’s Cape of Good Hope instead, which is a much longer route. According to OceanScore, a Hamburg-based maritime emission tracking platform, the new route led to higher fuel consumption and emissions due to longer distances as well as higher speeds.

The vessel’s journey from Asia ports to Europe, around the African Cape, has increased by around 9000 nautical miles. Furthermore, the sailing speed also increased from 16 to 20 knots “to compensate for at least some of the longer distance.” 

An analysis conducted by OceanScore on the case of a 14,000-TEU container ship showed that, due to higher fuel consumption and ultimately higher emissions, the carbon costs for covering emissions under EU ETS could increase by near-threefold from €98,000 to €285,000 per voyage this year alone, based on the current price of around €55.

As of January 2024, large vessels are subject to the EU ETS, having to surrender allowances to cover 50% of the emissions generated on journeys to/from EU ports and 100% of the emissions generated on journeys within EU ports. The regulation will be phased in gradually, meaning ship owners will pay 40% of the costs incurred in 2024 increasing to 70% in 2025 and 100% in 2026.