Oil tanker investments at risk from climate action, report says

(Climate Change News, 17 Jul 2019) Strong action on climate change would shrink demand for vessels by a third, impacting investment decisions being made now, analysts say.


Some oil tankers could be headed to the scrapyard early if the world lives up to the ambition of the Paris Agreement.

Demand for the vessels is set to shrink a third by 2050, as fossil fuel use declines under a scenario in which global warming is limited to 1.5C, according to analysis by consultancy Maritime Strategies International (MSI) for the European Climate Foundation.

“The implications are pretty bleak,” author Stuart Nicoll told Climate Home News. If finance backs too much shipping capacity, a global shift to cleaner energy “is going to wipe out a large amount of capital”.

Dry bulk carriers will also be hit by a predicted halving of the seaborne coal trade, but can switch to carrying other commodities such as grain. While there may be some growth opportunities in transporting wood pellets or biofuels, most renewable energy sources do not require fuel supplies.

Investors should target their money towards the most efficient ships and consider divesting from big carbon carriers, the report advised.

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Climate Change News, 17 Jul 2019: Oil tanker investments at risk from climate action, report says