In the drive to decarbonise shipping much of the focus centres on reducing carbon emissions created on board vessels, reinforcing a perception that shipping only happens at sea and overlooking the critically important role of ports in supply chains and their associated responsibilities in relation to decarbonisation.
Ports are vital in the shipping chain and, as major consumers of energy, significant sources of pollution and regulatory scrutiny. Ports also have a vested interest in the climate; physical infrastructure and port activities are vulnerable to changes in the level or patterns of shipping, increased flooding affects movements within ports and causes damage to goods and reduced navigability of access channels all contribute to business interruption.
There are also, increasingly, strong commercial incentives for ports to implement policies that lessen the impact on the environment, both through meeting regulatory requirements and voluntarily helping shipping decarbonise.
The applicable regulatory framework will differ from country to country. In the UK ports need to observe several EC directives and recommendations which survive Brexit, as well as domestic legislation and policies, including meeting the aims of Maritime 2050 and the Clean Maritime Plan 2019.
Additionally, ESG (Environmental, Social and Governance) considerations feed into a commercial and increasingly competitive imperative for ports to provide a more environmentally friendly service. Such a focus can drive revenue by enhancing their selection by customers through the innovative facilitation of carbon credits within the supply-chain, for example.
It is, after all, important to remember that ports do not operate in a vacuum, but rather are an effective interface between shipping and inland logistics. Clearly an essential part of the wider decarbonisation solution within the supply chain, ports, importantly, also have the potential to act as a catalyst.
Incentives:
It is therefore important to understand the port-specific incentives for decarbonisation as well as the opportunities, which we will explore here.
– Global warming
Physical infrastructure and port activities are particularly vulnerable to sea level rises and extreme weather events caused by global warming. Such events risk increased flooding (affecting movements within ports and causing damage to goods and infrastructure), reduced navigability of access channels, and interruption of business.
– Regulatory compliance
In the UK, ports still need to observe both domestic legislation along with some EC directives and recommendations that survive Brexit. Translation of policies such as Maritime 2050 and the Clean Maritime Plan 2019 into legislation, means ports will be increasingly regulated.
– Environmental, Social and Governance (ESG) criteria
ESG criteria are increasingly leading commercial decisions in ports, often being a prerequisite to the acquisition of finance or key contracts. As environmental impact reduction throughout the supply chain becomes increasingly important, those ports that can demonstrate greener credentials and are supporting port users to improve their own impact profile are gaining a commercial advantage over those ports that do not.
Opportunities:
Clearly, for ports to remain relevant and be well placed to compete, they will need to make the most of the opportunities available to them, be it geographical, sectoral or practical and not limited to a focus on their own business interests but also those of their port users. While still developing, some considerations include:
– Green Ports:
The concept of green ports draws together several factors where shipping and ports can work together toward a zero-carbon economy.
Broadly, this is a holistic approach that takes account of port physical infrastructure on land (waste management, built environment, electricity usage), at anchorage or berth (reduction in greenhouse gas (GHG) emissions), air quality improvement, water contamination / enhancing biodiversity) as well as providing vessel services (access to arrival / berthing data and alternative fuels) which support vessel CO2 reduction strategies. We review some of the available options below.
– Renewable Energy / alternative fuels:
Coastal ports are very well-suited for the production and deployment of renewable energy, which can include the use of on- or offshore wind energy, installation of solar panels on warehouses and port buildings, the use of tidal power, carbon capture and storage technologies or the provision of low / zero carbon fuels to vessels calling at the port, such as hydrogen or advanced biofuels.
Port initiatives in this area include the Port of Cromarty Firth where the port is developing a green hydrogen hub that produces hydrogen from offshore and onshore wind farms for the heating processes of local distilleries, replacing fossil fuels. Spreading this initiative across several stakeholders means the project also benefits from an associated de-risking (notwithstanding the requisite level of investment) while also reducing greenhouse gas emissions.
Further afield, the Ports of Antwerp and Zeebrugge are looking to establish a fully renewable hydrogen import value chain by 2030 and the Port of Hamburg is developing a 100MW electrolyser to produce green hydrogen. This sort of development can assist in the formation of ‘green corridors’ via traditional shipping routes.
While reducing carbon emissions, this sort of innovation can also help drive sustainable economic growth and help to differentiate ports from the competition, meaning a win-win for ports.
– Cold ironing / Shore-to-ship power:
Commonly, ships at berth have no option but to use their auxiliary generators to provide power for crucial systems such as lighting, ventilation and fire prevention. It is partially for this reason that in 2015 the European Commission advised, ‘If nothing is done, by 2020 shipping will be the biggest single emitter of air pollution in Europe, even surpassing the emissions from all land-based sources together.’
While it is likely that there will be a mix of emission reduction solutions for ships at berth, one way to improve vessels emissions is to provide access to shore power.
While this can mean expensive infrastructure upgrades and compatibility issues, the provision of shoreside power via a direct connection to the port’s electrical network, without interrupting the onboard services, can immediately eliminate not only emissions (NOX, SOX, CO2 & other particulates), but also vibrations and noise.
In the UK where energy generation consists of around 40% renewable energy, a move to shore power would likely also offer a significant reduction of greenhouse gas emissions. Where ports are already investing in renewable sources of energy to service the port estate, extending that offer to vessels would be of even greater benefit, both to the vessel operators and the port.
However, and despite the compelling arguments for shore power, there remain significant barriers to its implementation in the UK, with uncertainty and risks borne by shipping and ports. These barriers include:
– capital costs
To date, all shore power projects in the world have required public finance, leading to calls in the UK for a green maritime fund to support implementation of shore power in the UK. In addition, there are commonly also capacity challenges for the National Grid to cater for the increased demand, which can contribute to wider capital cost expenditure;
– price of electricity
Energy costs in the UK are much higher than in countries where shore power is more commonly provided. Most ports with shore power have support to help make electricity more competitive than tax-free marine fuel;
– compatibility / lack of consistent demand
Compatibility with, and consistent demand, from vessels calling in the UK for shore power can be a challenge – the ABP port of Southampton recently installed shore power connections for calling cruise ships in conjunction with Carnival UK. Accordingly, some sectors within the industry are calling for a zero-emission berth standard in order to drive up demand for emissions abatement technology.
– Transport – Modal Shift
Managing the way in which goods on land are transported to and from ports is also a key consideration for decarbonisation. Moving to electrified rail or waterborne freight (where available), for instance, is a major means by which a port’s GHG emissions and wider air pollution can be reduced.
While it is difficult to eliminate the use of road freight in its entirety, investment in rail infrastructure to facilitate this can have a significant impact on mitigating both GHG emissions and other forms of harmful air pollution.
Like shore power, investment in rail infrastructure can be costly and is very likely to require government support. However, and given the advantages, some form of modal shift is likely to form part of a long-term decarbonisation strategy supported by government.
As well as considering GHG emissions, consideration should also be given to the large quantity of harmful pollutants resulting from vessel and vehicle activities associated with port traffic, terminal operations and hinterland and employee transport. Initiatives include the use of electric vehicles and vessels within port estates and effective utilisation of public transport.
– Waste Management
Waste management (both aboard vessels and ashore) is also an important aspect that is dealt with at ports. The handling of waste should be configured to allow for as much recycling and reuse of materials as possible.
Implementation of complementary systems, appointment of appropriate contractors and training of staff as to best practice for handling waste are important means of improving the associated management of port and shipping waste that can be driven by both parties.
– Water Contamination
Ship-borne and shore-based water pollution is also an important consideration within this context and takes many forms, including maritime debris, leakage of fuel and other chemical pollutants, discharge of sewage (port or vessels) and contaminated sediment from dredging. All of these sources should be managed so that they are minimised wherever possible, resulting in lower costs and regulatory overheads for both ship and port operators.
– Digital Infrastructure
Investment in the digital infrastructure to facilitate ‘just in time’ port calls by vessels is another way to facilitate sustainable economic growth and meet ESG objectives. GHG emissions and the discharge of other pollutants can be reduced by ensuring that vessel calls are as brief and efficient as possible, so reducing the environmental impact of the port and vessel.
Investment in technologies such as 5G within the port estate may also facilitate the use of autonomous electric vehicles and optimisation of transportation, improving efficiency and driving a reduction in the port’s carbon emissions.
Improved collection of data throughout the port is both beneficial from an operational perspective as well as in identifying and reducing the main sources of energy consumption within the port.
– Biodiversity
Finally, the impact of any expansion of the port upon biodiversity is an increasingly important consideration. Given the waterways upon which ports are situated are important habitats for wildlife, showing that due care has been given to the impact of the port’s footprint upon local flora and fauna (and in turn the built environment) demonstrates the port’s ESG credentials and commitment to the wider environment.
As well as taking steps to reduce the destruction of wildlife habitat, consideration should also be given to the impact of both noise and light pollution. Taking a leaf from other industries, the established practice within the construction sector of demonstrating ‘net gains’ for biodiversity and the creation of new green spaces for wildlife and people could be employed.
Conclusion
In conclusion, the role of shipping and ports today is influenced from many sides and innovation can be drawn from other sectors. In an increasingly consumer-led and environmentally aware society, our duty to protect the environment has been brought into sharp focus and needs to be embraced if the commercial opportunities are to be realised.
While some ports will already have well-developed infrastructure to offer during port calls and / or other shoreside initiatives in hand, this is an area where much further development is needed if ports are to help contribute to the increasingly stringent environmental regulation that is fast becoming the norm.
A continuous dialogue between ports and shipowners to ensure co-operation and wider compatibility is therefore essential in order to navigate such challenges and minimise the associated environmental impact. In this way, cutting edge facilities and infrastructure can be drawn upon and developed to ensure best environmental practice within a commercially sustainable narrative, driving further growth.
For further information, please contact:
Colin Lavelle, Partner, Hill Dickinson
colin.lavelle@hilldickinson.com
