Shipping customers are on board to pay a premium for carbon-neutral shipping, a willingness to pay that is growing fast, but still the amount of the premium they will accept is “insufficient to move the needle toward achieving net zero by 2050”, a new research reveals of Boston Consulting Group
In search of answers and insights into shipping customers’ thinking, the BCG surveyed 125 companies across industries and geographies that ship their cargo, first in 2021, and again in 2022.
The BCG’s recent 2022 survey showed that 82% of shipping customers are willing to pay a premium for zero carbon shipping, an 11 percentage-point increase over 2021. Additionally, the willingness to pay (WtP) premium rose by more than 30% to about 3% in 2022, which would correspond to between $10 billion and $20 billion in extra revenue for the shipping sector. A partial conversion of hesitant customers also seems to be taking place, according to the research, with the low WtP segment (WtP 2%) shrinking from roughly 40% in 2021 to about 30% in 2022.
Looking ahead, the trajectory of the WtP premium is positive, expected to surpass well over 3%, as roughly 65% of surveyed customers in 2022 stated a willingness to pay an even higher premium in the future. As it is highlighted in the research, the WtP premium of 3% per year “is not sufficient if cargo owners are to fund decarbonization alone, which would require them to pay a 10% to 15% premium per year until 2050”.
In addition to increased WtP year on year, more shipping customers are responding that they would be more loyal to a zero-carbon shipper.
This higher level of commitment poses a clear opportunity for shipping companies and their customers to forge closer partnerships to share both the costs and benefits of a decarbonized value chain.
Furthermore, a growing proportion of survey participants believe that competitive advantage driven by carbon neutrality can deliver financial benefits. Such responses indicate that decarbonization is being increasingly seen as a competitive asset, not just a compliance obligation.
“Push for a green-positive culture”, is the key factor as the research highlights.
Source: Boston Consulting Group partners
