The ferry prices in Crete and Greece will begin soaring next year.
The quest to transition European and Greek ferry services into an era of low carbon emissions is evolving into a challenging mission. Balancing environmental goals without drastically increasing ticket prices that could dampen demand is proving tough.
Financial Challenges and Estimates
Adapting Greece’s ferry fleet to achieve the European Union’s and Greece’s 2030 carbon targets requires significant investment:
- Greek Passenger Shipping Business Association estimates costs at €2.5-3 billion
- Hellenic Chamber of Shipping suggests up to €6 billion is needed
This reality demands substantial private or public funding. Additionally, lower fuel prices and operational savings, which the industry cannot control, are vital.
Implications of Financial Sources
Private financing can elevate operating costs, threatening existing operations’ slim 6% profit margins. Increased fuel prices from 2025 and rising emission rights costs from 2030 could potentially lead to a 32% hike in ticket prices, warns a recent IOBE study. Such a surge could strain business finances and affect Greece’s island economies.
Government subsidies and financial tools, championed by Minister Christos Stylianidis, attempt to bridge funding gaps. Despite mobilizing €1 billion from EU and national funds, addressing the €3-6 billion need remains a challenge.
Urgency and Industry Trials
The need for new vessels or retrofitting older ones to meet emissions standards is already pressing. Most companies face difficulties, and the preferred technologies and fuels are unclear. The ambition is to reduce carbon emissions by 40% by 2030.
Recent business warnings reflect this urgency. Stena Line has launched a program to secure future investments, including voluntary layoffs. Meanwhile, Danish firm DFDS canceled a major acquisition and revised its forecasts.
Economic Impact on Passenger Shipping and Ferry Prices
According to IOBE, passenger shipping plays a crucial role in Greece’s economy:
- Contributed €11.8 billion to GDP in 2023, representing 5.4% of the total
- Supported 318,000 jobs, accounting for 6.9% of total employment
In regions like the South Aegean, Zakynthos, and Kefalonia, over a third of the economy leans on ferry activities. “Incorporating the cost of emissions has serious economic implications,” says the IOBE study. Expanding the EU Emissions Trading System and new fuel legislation may increase costs by €320 million by 2031. Ticket prices could rise 32% on Crete and 33% on Adriatic lines, cutting passenger numbers by 2 million and vehicle counts by 483,000.
- Lost revenue from fewer passengers could hit €179 million
- Tourism business income in islands may drop by €433 million
- Overall economic impacts expected by 2031 include a GDP dip of €658 million, state revenue loss of €216 million, and 15,900 fewer jobs
Investing in Green Technologies
There’s an essential need to invest in green technologies. IOBE stresses that this transition requires strong support through tax and financial incentives. Reduced VAT, accelerated application of green maritime funding mechanisms, and allocation of emissions trading revenues are recommended.
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