Geneva - The global merchant fleet is getting very old and will require hundreds of billions of dollars for its required green transition, a new detailed report from the United Nations has warned.

The 126-page Review of Maritime Transport 2023 published by the United Nations Conference on Trade and Development (UNCTAD) in time for today’s World Maritime Day is a stat-laden document with many important pointers on where shipping stands today on its green pathway. 

Among key statistics in the report, the average age of commercial ships at the start of 2023 was 22.2 years, two years older than a decade ago. Further, more than half of the world’s fleet is over 15 years old, a remarkable figure when taken in the context of what Norwegian broker Fearnleys has this month described as the record-breaking length of orderbooks at the world’s shipyards.  

“Shipyard capacity is currently facing constraints. Tanker and dry bulk owners are anticipating long waiting times and high building prices. Increasing shipbuilding capacity is crucial to ensure that shipping meets global demand and its sustainability goals,” the UNCTAD report states.

UNCTAD called for a “just and equitable transition” to a decarbonised shipping industry in its review, highlighting the pressing need for cleaner fuels, digital solutions and an equitable transition to combat continued carbon emissions and regulatory uncertainty in the shipping industry.

The UN agency reported that an additional $8bn to $28bn will be required annually to decarbonise ships by 2050, and even more substantial investments, ranging from $28bn to $90bn annually, will be needed to develop infrastructure for 100% carbon-neutral fuels by 2050. The costs involved in the green transition could prove to be prohibitively expensive for many smaller owners, according to Mark Williams, who heads up UK consultancy Shipping Strategy.