Tanker Market Should Take Note of China’s Climate Pledges
The Hellenic Shipping News reports that the tanker owners should be wary of China’s recent formal announcement. It is a declaration of the country’s commitment to carbon net-zero goals. And it certainly has adverse effects on its crude oil imports. The broker Gibson believes that China’s announcement last month of a commitment to carbon net-zero by 2060 could have serious consequences for the global economy and the tanker community. China now accounts for one sixth of the world’s population and around a third of the world’s production. However, the Chinese president has pledged to achieve carbon net-zero emission within 40 years. However, the zero diffusion path requires intervention on a scale never seen before.
Hence, we need new regulations, tariffs and alternative fuel subsidies for countries trading with China. According to the broker, China is the world’s largest issuer of CO2. Then there is the USA. In his speech, Xi Jinping said:
“China’s ‘aim’ is to reach peak CO2 emissions ’before 2030’. Meaning there is still someway to go before ‘peak’ emissions are reached.”
From here the economy will have to transition to a carbon neutral. It is trying to adapt its economy to reducing carbon emissions. They are planning an emission trading scheme (ETS).
But at present, it is not clear how the country will move to a green economy. But it will soon start reducing fossil fuel consumption. China currently accounts for about 52% of coal, 14% of oil and 8% of natural gas global consumption. It will affect domestic production and imports. The refining section must also adapt to the new environment.
Finally, we conclude that China’s climate targets will have a significant impact on the global tanker market. As China’s oil demand slows, tankers will have to look elsewhere. “Alternative fuels such as hydrogen, ammonia and methanol could well be the growth sectors of the future,” he said. The country’s transition to a green economy over the next 40 years will affect all aspects sea freight sector.
This week, meanwhile, was a relatively active start for VLCCs in the Middle East. This gave the owners a very temporary and rare opportunity to apply a bullish leverage. But the result was a deficit. Suezmaxes remained stuck fast at recent lows despite steady interest. And that is likely to remain the case for some while yet. Aframaxes plumbed new lows at down to 80,000mt by ws 55 to Singapore. Even as activity kept to a steady beat. It needs an even faster rhythm to get this market dancing”, he concluded.
If you need more details, check the source.