Transforming the role of ports through decarbonisation

From an article by UNCTAD

Europe’s drive to decarbonise is picking up pace with the latest news that the second plank of the Fit For 55 package, the FuelEU package to increase carbon charges from 2025, was agreed by the European Parliament and Council of Europe this week.

Included in the FuelEU legislation is a stipulation that containerships could be obliged to operate with zero emissions while docked in port; that will require shore power from the ports.

It is critical that ports perform their essential role in the energy transition, which will benefit the ports as well as allowing the operator to anticipate decarbonisation pressures and green fuels/energy demand.

To achieve this transformation into an energy provider, port and terminal facilities require the engagement of new stakeholders, including port users such as shippers and forwarders, giving a critical cross-value-chain collaboration.

Effectively in achieving the above, ports become a transport, digital and energy node. On average, 40% of goods going through ports are energy related. Ports are central nodes for sector coupling and energy system integration as they host and serve multiple industries, including energy, shipping, trucking, railways, cruise-tourism and manufacturing.

Decarbonisation of transport requires collaboration across cargo owners, freight forwarders, ports, carriers, vehicle and engine manufacturers, energy producers, policy makers and so on. Ports can capture the opportunity and play an important model role at the intersection of marine fuel, shipbuilding (including ship supplies) and operational value chains, providing enablers of transport decarbonisation.

This contribution, based on a larger Swedish study, provides a framework (see illustration below) for guiding ports on building energy node capabilities. This framework’s foundation is a port’s energy strategy (Level 1) factoring in, a port’s own energy needs (Level 2), green energy to port visitors (Level 3), and its role as part of the transport and energy ecosystem (Level 4).

Maturity framework for the port as energy node               (Illustration: Sandra Haraldson)

The role of ports in decarbonisation
The ports of Antwerp-Bruges, Hamburg, Rotterdam and Singapore aim to position themselves as multi-fuel bunkering hubs. The signing of the memorandum of understanding (MOU) for the Singapore-Rotterdam Green Corridor on 2 August 2022 is indicative of the trend.

As landlord and investor, ports can optimise spatial planning (as, for example, in Hamburg and Antwerp-Bruges) to ensure that land and infrastructure are available to facilitate low/no-carbon energy projects, while (co-)investing in sustainable energy solutions.

As “regulators”, port authorities can leverage tariffs and incentives to support low/no-carbon measures and upgrade environmental and safety standards to support the alternative fuels value chain.

Ports can create (digitally supported) processes that help other stakeholders to become more (energy) efficient, while not necessarily changing to low/zero-carbon energy sources. Ports as “enablers” can initiate collaboration, partnerships and consortia to align climate goals, predict energy demand and co-run low/no-carbon fuel projects. Energy-empowered ports can expand the port community by inviting “energy” actors and tracking/tracing energy flows through big data intelligence and blockchain technologies, etc.

Ports can drive new revenue streams through climbing the four-step maturity framework. The framework is not to be seen as a one-directional framework, but as a self-improving circular system, where ports take actions that move back and forth between the levels.

Level 1: the need for an energy strategy
Port authorities should start by devising an energy strategy for their own energy needs and for their energy supply capacity. Such an energy strategy should encompass all port operations, guiding the entire port community in driving investment decisions. This implies that this strategy is not only a compass for port authorities, but also influences actors in ports or visiting ports.

Level 2: sustainable operations within the port
One focus area for ports is to improve energy efficiency; this can be achieved through electricity from low/no-carbon sources powering, for example, cranes, reach-stackers, prime-movers, tugboats, forklifts and the port’s vehicle fleet, and the use of LED and smart lighting at port premises.

Some ports produce energy themselves, for example, through solar and wind. Port authorities need to create collaborative platforms, regulative incentives and partnerships to achieve effective emissions reductions through multi-stakeholder roadmaps, investments in grid capacity and shared port processes for efficient traffic management between terminals.

Level 3: provision of sustainable energy to port visitors
Increasingly, ports are expected to supply and facilitate sustainable energy consumption by carriers serving different modes of transport. Ports can facilitate bunkering of low/no-carbon fuels and offer shore-side electricity to vessels while berthed and charging, and alternative fuel stations for heavy vehicles and trains. Just-in-time arrivals and slot management programmes in Rotterdam and Singapore resulted in bunker and emissions saving in the range of 4% to 7%.

Level 4: broader industry role in the energy transition
The EU Green Deal, EU energy efficiency improvement target of at least 32.5% for 2030 and the REPowerEU plan open opportunities for ports. Ports can support the development of productions facilities by providing land and (co-)investing in newbuilds. Ports can also influence the type of cargo handled by entering partnerships and strategically plan terminals that support regional transitions to net zero. Ports can also be testbeds for new technologies such as carbon capture and storage (CCS).

Ports can be a catalyst of the energy transition while generating new lease earnings or incomes through the sale of energy. There are several complementary decarbonisation enablers that come with myriad opportunities.

The port can play a model role in aligning supply and demand of low/no-carbon energy sources by engaging actors along the energy value chain. With this comes the need for different behaviours supporting collaboration but also broader knowledge and new skills and, most importantly, a mindset that goes beyond their own turf.

Read the full UNCTAD article here.

Authors: Mikael Lind, Research Institutes of Sweden (RISE); Sandra Haraldson, RISE; Wolfgang Lehmacher, Anchor Group; Zeeshan Raza RISE; Ellinor Forsström, RISE; Linda Astner, Port of Gävle; Sweden, Jeremy Bentham, World Energy Council; Xiuju Fu, Institute of High-Performance Computing; Jimmy Suroto, PSA International; Phanthian Zuesongdham Hamburg Port Authority.