When global warming cools down, dry bulk heats up
In his latest analysis, Mikkel Nordberg, Veson Nautical's senior shipping economist, says that decarbonisation efforts are expected to result in a net increase of 26 million t and 237 billion tonne-miles for the dry bulk shipping industry from 2023 to 2026.
The expansion of renewable energy capacity is predicted to outweigh the negative effects of diminished coal demand, making decarbonisation a key demand driver for dry bulk owners.
The global coal demand for electricity generation was approximately 5,770 million t in 2023, with around 19% transported by sea. The reduction in the demand for thermal coal is estimated to be 273 million t, leading to a decrease of 52.7 million t in the seaborne thermal coal trade by 2026.
On the other hand, the rising need for renewable fuels is expected to raise the demand for steel, with an estimated 101 million t required for solar panels and windmills. This translates to a projected 115.22 million t uptick in the demand for iron ore, entailing a 78.8 million t increase in the seaborne trade of this commodity. The net result is a 1% rise in total tonne-miles from 2023 to 2026, indicating that decarbonisation efforts will be beneficial for the dry bulk shipping industry. (pb)