Burning Ships, Smoke, and the Limits of Decarbonisation

Why It Matters

Unaccounted conflict emissions undermine climate targets and shift hidden costs onto consumers, revealing a critical blind spot in global carbon accounting frameworks.

Key Takeaways

• EU ETS carbon price ~ $65‑$110 per tonne
• Ship fires can release millions of tonnes CO₂ quickly
• Conflict emissions are largely omitted from climate reporting frameworks
• Decarbonisation may raise freight costs $10‑$40 per tonne
• Unpriced war emissions add hidden inflation to consumer goods

Pulse Analysis

Maritime carbon accounting has become a high‑precision exercise, with shipowners tracking differences as small as 0.1 tCO₂ to satisfy EU ETS reporting deadlines. This rigor, however, contrasts sharply with the treatment of emissions generated by wartime incidents. Fires on handysize vessels or bombed fuel depots can emit millions of tonnes of CO₂ in a matter of hours—orders of magnitude larger than the incremental savings achieved through hull coatings or engine optimisations. The discrepancy reveals a regulatory blind spot: while routine emissions are meticulously logged, conflict‑related releases escape the same scrutiny, leaving a substantial carbon source unaccounted for.

The geopolitical landscape has amplified this issue. Since the Red Sea and Strait of Hormuz attacks, over 25 merchant ships have been damaged, and combined with the Ukraine war, the total number of affected vessels approaches 100. Estimates suggest the Ukraine conflict alone has generated roughly 230 million tonnes of CO₂‑equivalent emissions, comparable to the annual output of several European nations. Military activity worldwide now accounts for about 5.5% of global emissions, yet these figures rarely appear in national inventories or market‑based mechanisms like the EU ETS. The omission hampers accurate climate modelling and dilutes the perceived effectiveness of decarbonisation initiatives.

Financially, the gap translates into hidden costs for the global economy. With EU carbon prices hovering between $65 and $110 per tonne, the additional burden of green fuels could increase freight charges by $10‑$40 per tonne, nudging retail prices up by 1‑3%. While these increments seem modest, they compound across supply chains, disproportionately affecting developing markets and price‑sensitive consumers. Addressing the accounting void for conflict‑driven emissions would not only tighten climate data integrity but also ensure that the true societal cost of war‑related pollution is reflected in policy and pricing mechanisms, fostering a more equitable transition to net‑zero shipping.