SFA Research Corner: Moving Towards Decarbonization—A Look at Freight ABS

Shipping is the leading transportation mode for U.S.-international trade moving $1.1 trillion (43% of total trade value), two-thirds of which is containerized thanks to greater efficiencies and growing demand. New regulations from the International Maritime Organization (IMO) aimed at decarbonizing sea freight could reduce ships’ CO2 emissions by 37% in 2030 and 96% by 2040. If adopted and successfully implemented by member countries, the impact would be meaningful: shipping contributes 3% of the world’s greenhouse gas emissions – or put another way – “if shipping were a country, it would be the world’s sixth biggest greenhouse gas emitter.  Container leasing companies have been relying on the securitization market for funding since the 1990s —there is approximately $13.5 billion of container ABS currently outstanding. To the extent that decarbonization proposals are executed, container ABS could join railcar ABS to facilitate the decarbonization transition. Read More.