Ports are on the frontline of maritime decarbonisation. How are they adapting?

Introduction

The transformation of port infrastructure is critical to enabling the industry to transition to net-zero. Ports are like mini-cities, they are hubs of all global trade, meaning they are at the first frontier to ensuring that IMO emissions targets and the targets set out by the Paris agreement are met. Ports must be ready to fulfil the requirements for future shipping by being able to supply alternative fuel sources in a relatively short window of time. With a clear need for change, several technological developments have come to light to enable new ways of working, but serious questions remain regarding whether our ports are financially prepared to undergo the necessary infrastructure changes. This report shall examine the necessary changes to our ports’ infrastructure and the challenges facing the adoption of alternative fuels.

The importance of decarbonising the maritime industry

Maritime transportation is crucial to the world economy, with 90% of trade transported using ships. With the world’s most significant means of transportation, the industry produces 940 million tonnes of CO2, equivalent to 3% of the world’s overall CO2 emissions. The International Maritime Organisation aims to make the industry zero-emission by the year 2050, with ships worldwide needing to take a proactive role in driving the transition to net zero. This impacts the industry’s overall economic, environmental, and health. 

The race to reduce greenhouse gas emissions to limit global warming is on. The energy transition needed to work towards a cleaner future is essential. DNV’s outlook on the energy transition shows that even though the process of creating alternative, eco-friendly fuel sources is gaining pace, it will still not meet the Paris Agreement’s requirements to limit global temperature by 2°C. However, several changes must be made to change the maritime sector’s climate crisis.

Given the harmful effects of global warming, the industry needs to act urgently, collaboratively, and comprehensively across all sectors to ensure that the industry is on the path to zero emissions. Many significant stakeholders have recognised the need for change; with this, alternatives for cleaner energy are becoming more readily available. Technologies such as alternative fuel sources and energy efficiency technology, regulatory and financial measures such as carbon pricing, and integrated solutions are the first steps required to ensure that the maritime industry will reach its net zero ambitions.

Are ports on the front line for decarbonisation?

Ports are the backbone of the shipping industry; without them, ships would be unable to fuel, load, and unload goods and complete the basic functions required by the industry, making it essential for the maritime sector to function correctly. Furthermore, as the source of fuel for visiting ships, ports are critical for decarbonisation. There are several options for decarbonising maritime transport, whether direct electrification or using carbon-free fuels. Embracing these technologies will enable ports to offer a more diverse service and bunkering infrastructure.

However, at the port level, the future demand for alternative fuel sources can be seen as an extraordinarily complex and uncertain topic. The cost of infrastructure to provide alternative fuel sources will cost billions worldwide. To achieve the goal of reaching zero carbon, it is estimated that more than $1 trillion of transport infrastructure investments are needed to transition to net zero fuels. Around 85% of these costs would need to go towards landside infrastructure and the production capacity required to facilitate future fuels.

The infrastructure that is key to unlocking the challenges of a carbon-neutral industry requires significant funding to allow ports to develop energy systems, industrial hubs, and refuelling facilities.

How are ports adapting to net zero?

For ports to remain relevant to the current standards of the maritime industry, they will need to make the most of any opportunities that present themselves. With the industry making rapid changes in the upcoming years, ports must be in a state of readiness to ensure they can facilitate all vessels’ needs, but there is a wide array of potential technology options for reducing port emissions.

Electrification of docks and port vehicles

Electrification is undoubtedly one of the most prominent components of decarbonisation in the maritime industry. Regarding ports, introducing more electrical energy from renewable sources would ultimately reduce greenhouse gas emissions and increase the credibility of port operations. This effect will also reduce any maintenance costs, amongst other advantages. 

It has been noted that this is the most effective solution to reducing emissions from ports when a ship is alongside and needs to be powered. This is especially true with cruise ships, which have huge power requirements, even when alongside. Incorporating shore power using renewable energy would reduce the port’s carbon emissions and ensure that no fossil fuels are required when the vessel is alongside. 

However, electrification does not end at the quayside, it also can provide energy to other modes of transport required in the port, machinery such as cranes and port vehicles can be powered this way too. Nexigen is the Port of Barcelona’s dock electrification plan. It aims to contribute to a 22% reduction in greenhouse gas emissions from its operations and is expected to be completed by 2030.

Enabling the introduction of new bunker fuels and propulsion types

Another key way to ensure the reduction of greenhouse gas emissions related to maritime transport is for the industry to adopt and adapt to new fuel sources which are less polluting.

Liquified Natural Gas

The industry is looking at alternative fuel sources with a keen interest in liquefied natural gas (LNG). Although LNG gas is a fossil fuel, it has proven to be safe and offers higher energy content and lower operational and maintenance costs than other alternative fuels. In the future LNG could allow for the introduction of net-zero alternatives such as bio-LNG or synthetic natural gas.

Methanol and biomethane

Methanol and Biomethane are other alternative fuel sources, and although there are no specific regulations governing methanol as a marine fuel, it will follow equivalency assessments as a novel use. Methanol is produced using natural gas, coal, and renewable feedstock, depending on the grade and is a liquid at ambient pressure. Its temperature makes storage and handling much more manageable than when compared to other fuel sources. However, it may not be a net-zero option due to the methane emissions during production and combustion and may only provide a limited reduction in carbon dioxide emissions when compared to traditional fuels. That said, it has been suggested that methanol derived from biomass can bring up to a 50% reduction.

There are currently 52 methanol-powered ships in use, with ports implementing the infrastructure needed to supply vessels with the alternative fuel source. The Gothenburg Port Authority is making arrangements to set up a value chain with the ambition to become the primary bunkering hub for renewable methanol in Northern Europe. The port received acceptance from the Swedish Transport Agency in 2022 for general methanol operating regulations for ship-to-ship bunkering and has set a target to reduce shipping emissions by 70% by 2030 by using a variety of shipping fuels to achieve this goal. However, the port has handled methanol since 2015, when Stena Line started to bunker their ship Stena Germanica, but they are now looking to expand their customer base.

Ammonia

Ammonia is a zero-carbon fuel, most of which is currently made using natural gases. It can be used as the energy source for fuel cells or as part of the fuel source for an internal combustion engine, and green ammonia offers the dual potential for zero-emission shipping. However, obstacles are in place concerning the use of ammonia, such as production scalability and fuel availability, as novel engine technology designs, safety considerations and difficulties with the supply chain.

Whilst there are many competing fuel operations available, it is predicted that ammonia is one of the most promising fuel options for the future. Pilbara Ports Authority, based in Western Australia, recently signed a collaboration agreement to jointly facilitate the uptake of clean ammonia as a marine fuel. The agreement’s purpose is to jointly assess the potential of ammonia and the required bunker infrastructure, leveraging the existing world-scale ammonia production facility.

Battery and Electric

Electric and hybrid systems which use battery or fuel cells are another alternative fuel source with zero-emission options. Currently, the electrification options remain in the early development stages and the current technology has serious limitations. However, battery-powered vessels have proven to be suitable for short-sea routes or domestic passenger ferries. Furthermore, hybrid ships are currently being explored, where ships would be fitted with lithium-ion battery electric propulsion motors that can be charged from onboard diesel-driven generators or when plugged into a shore power supply. 

The Associated British Ports (ABP) Port of Southampton has recently commissioned and utilised a shore power facility designed for cruise ships. The new power facility will enable certain cruise ships to plug in for zero emissions when at berth. 

Hydrogen and fuel cells

Hydrogen is an excellent alternative fuel source to be used on board vessels, with evidence suggesting it could lead to the pathway toward decarbonisation within the industry. Compressed or liquefied hydrogen burns with zero carbon or greenhouse gas emissions and is non-toxic, colourless and odourless. However, as with most alternative fuel sources, hydrogen has its limitations, one of which is that it has a high flammability range and low ignition energy. Hydrogen is not a fuel that is produced naturally therefore, it must be produced from coal, natural gases, or a renewable energy source. There are several ways in which hydrogen can be produced;

1. Grey or brown hydrogen: this is inexpensive and is derived from natural gas. It uses fossil fuels as the energy source and is produced from coal gasification.
2. Blue hydrogen is also produced from fossil fuels such as natural gas and coal, but most of the carbon emitted during its production is captured and not released into the atmosphere.
3. Green hydrogen: Is produced through renewable energy, where hydrogen is derived from a clean source. For example, hydrogen is produced by water electrolysis, which is considered clean but expensive.

As with LNG, no regulations specifically cover the design and operation of hydrogen-powered vessels or hydro bunkering. However, hydrogen is currently designated as a cargo that is too hazardous for bulk carriage and may only be transported in containers. Therefore, more work must be completed to ensure it is a safe option for alternative fuel sources. In 2022, the first hydrogen bunkering license in the Netherlands was granted within the port of IJmuiden, allowing WindCat Workboats to bunker with hydrogen. 

The use of offshore wind energy

The use of offshore wind energy to the grid is something that may have a significant impact on the ports’ energy system, particularly in regions such as the North Sea, where strong and consistent winds blow. However, energy storage from wind power is a known issue. Combining wind power with the production of green hydrogen for energy storage could be highly beneficial.

Eradication of fossil fuel-based power plants

Lage ports around the world are often associated with fossil fuel-fired power plants, but their massive contribution to greenhouse gas emissions makes it necessary to phase them out and replace them with a more sustainable solution. This would impact ports in many ways, from instability in energy procurement to the opportunity to take advantage of the space currently occupied for other purposes. 

Carbon Capture and Storage in Ports

Ports are similar to small cities; therefore, they can take advantage of their closed and controlled enclosures to capture, store and use carbon in a controlled manner. The Port of Antwerp has created a project to capture half their CO2 emissions by 2030. The long term goal for this is to use carbon as a raw material for various industrial processes or exports to other countries.

The Development of New Maritime Regulations

The EU and the IMO are just some examples of regulatory bodies that are in the process of creating frameworks for enforcing the decarbonisation of the maritime sector and ports. Currently, the EU is committed to promoting decarbonisation issues and is working towards creating a framework for more regulations to help reduce the maritime industries’ carbon footprint. 

FuelEU Maritime Regulation

The FuelEU Maritime Regulation can potentially improve the use of sustainable fuel. This regulation limits the amount of greenhouse gas emissions that ships can generate in European ports and outlines that carbon intensity must be decreased by 2% by 2025 and 6% by 2030. This would mean carbon intensity should be 75% lower than in 2020. However, there is a problem with these regulations; technical design and overall ambition as it allows ships to use zero-emission fuels and LNG to meet their emission reduction targets. Although zero-emission fuels are more expensive, shipping companies may opt for LNG fuels emitting CO2. Even though it is less than conventional fossil fuels, relying on LNG is incompatible with achieving the objectives of the EU Green Deal. 

The Alternative Fuel Infrastructure Regulation (AFIR)

Another regulation proposed to EU state members is AFIR, which aims to increase LNG availability by 2025 to improve onshore eclectic power supply in EU ports by 2030. The regulation requires all member states to enhance the supply of hydrogen and onshore electricity for vessels at ports. However, it does not directly affect the demands of shipping companies. It does, however, ensure that the infrastructure is in place to facilitate the transition to alternative sustainable fuels and provisions of shore power during port stays as required by FuelEU.

Although AFIR sets sustainable regulations for the decarbonisation of the maritime industry, it tends to focus on enhancing the supply of LNG, which is still a fossil fuel producing GHG emissions. Moreover, with Russia’s current crisis in Ukraine, LNG is becoming an even risker and unaffordable energy source as gas and oil companies have raised their LNG prices, making the gas less appealing to ship owners.

What does the future hold?

Are changes in ports happening fast enough?

The IMO adopted the first CO2 emissions target in this sector, aiming to reduce emissions by at least 50% by 2050 and agreeing to reduce the carbon intensity of international shipping by 40% by 2030. Ports have emerged as strategic policy actors in the global effort to reduce greenhouse gas emissions. They are at the front line, and without enforcing change, it is unlikely that change will occur in the maritime sector.

The target set by the IMO is considered to fall short of what is required by the Paris accord as shipping sector emissions are set to continue to rise beyond 2030. Because of this, it poses the question of whether enough is being done at our ports to enforce and ensure the readiness to use alternative fuel sources. In addition, ports from all classes worldwide must embrace more sustainable trajectories. For example, China’s ports emit high levels of CO2 emissions, with Shanghai and Tianhun having some of the highest emission rates in the world. China has the funds and resources to keep up with the demands of a forever changing environment and will be capable of changing its infrastructure to ensure it can provide bunkers for ships for any fuel source type. 

However, some of the busiest ports are from countries that do not have the funding, resources and capabilities that China does. For example, Malaysia’s Port Klang handles more volume than the Port of Antwerp and the ports of Laem Chabang, Thailand and Tanjung Priok, Indonesia, are busier than the Port of New York and New Jersey. Ports are beginning to group in transnational networks to share experiences, practices, strategies, and policies to act on climate change to work towards net zero carbon systems, but cause for concern is still at the forefront to ensure that all ports can keep up with the demand for changes. Referring back to “the challenge”, it is estimated to cost more than $1 trillion to ensure the adaptation of ports development for new fueling systems. It is difficult to imagine where the funding will come from over the next ten years, especially with the current economic crisis.

How developed is port infrastructure for future fuels?

In order to ensure the demands of stakeholders, governments and technology providers are being met, the industry must ensure the scale-up of storage, bunkering and fuel transfer infrastructure. This will require targeted investments worldwide to ensure the industry is kept up to standards. Furthermore, with masses of alternative fuel options available, it poses the question which new fuel sources to prioritise. Certain biofuels can use the same infrastructure and transfer systems as LNG, and most ports have accessible waste facilities from the north sea to the black sea, meaning ports can safely provide biofuels. On the other hand, methanol and ethanol have little port infrastructure in place, and no bunkering vessels have the facilities to transfer the fuel across as they are supplied to ships using trucks.

Hydrogen production and storage facilities are in the process of being developed but face technical and safety concerns, solution providers are working on improving storage technology, and there is currently one hydrogen storage bunkering vessel being tested. Ammonia is already a fuel source which is regularly transported as cargo. Therefore, some transfer systems are well developed, and storage facilities exist in specific ports, but there are no ammonia bunkering vessels. 

The current challenges faced for scaling up port infrastructure are the investment opportunities needed to outfit the world ports with the necessary infrastructure for a range of alternative fuels. It is expected to cost around $1 trillion to change the infrastructure of ports, but the question is, who will provide the funding for this? It is expected that governments may be expected to underwrite the development and public funds for infrastructure and incentives to ship owners who are using alternative fuels. Funding may come from marine stakeholders and energy providers eager to accelerate the energy transition and comply with increasing regulations. But there is no set answer as to where the funding will come from to ensure funding is made available for the change of infrastructure of ports worldwide.  

Changing world port infrastructure is also a time-intensive process that will require collaboration and organisation amongst all parties involved. Ship owners would be required to request a port delivery from an alternative fuel provider, who would then require authorisation from the local port authority to build facilities to provide fuel. The port authority would need to assess the relevant infrastructure to ensure it complies with the safety, technical and environmental regulations before issuing a license to operate. The port would then need to ensure that surveyors perform regular audits on the facility to ensure ongoing compliance.

Lastly, hydrogen storage is a technical and safety challenge which limits its useability in onshore facilities and onboard bunkering vessels. Certain technologies are still under development and will not be commercially viable for certain fuels, such as ammonia and hydrogen, which will need to be produced or burned with carbon capture and storage technology. 

Green Corridors

With the maritime industry being on a mission to establish net zero by 2050, one method of enabling this is to implement green corridors, which are specific trade routes between port hubs where zero-emission solutions are supported. In addition, green corridors would allow policymakers to create an ecosystem with targeted regulatory measures, financial incentives and safety regulations. Finally, green corridors may create secondary effects that reduce shipping emissions on other routes. For example, once the infrastructure to provide zero-emission fuel for one green corridor is in place, it can be used for shipping on other adjacent routes. Essentially green corridors will enable ports to work together by providing green fuels to ships. 

Under the Clydebank Declaration, six green corridors will be established by 2025 and scaled up over the following years. So far, six countries have signed the declaration, including Australia, Canada, France, Japan, New Zealand, the UK and the US, which together shall create a value chain to decarbonise a specific shared route. The coalition will also work to potentially include green corridors in national climate action plans, which are required under the Paris Agreement. Furthermore, several ports are working together to create green corridors between themselves. For example, The Port of Rotterdam is working with the Port of Gothenburg to establish a green corridor route between the two ports. In addition, they are currently working to produce the framework for cooperation to stimulate the use of new alternative fuels needed to reach full maritime decarbonisation. 

Conclusion

The changes needed to decarbonise the maritime industry are enormous. There must be improvements and changes to the infrastructure to accommodate vessels with alternative fuel sources. It is expected to cost billions to update ports. However, this funding source is still unknown, and ports in less affluent counties may halt the development, thus creating problems within the supply chain. 

The introduction of green corridors will enable ports to work together to provide alternative fuel sources to vessels. They will be a means of spurring the early adoption of zero-emission fuels and technologies that will help place the sector on a credible pathway to achieving zero emissions. In addition, it will encourage the growing movement to establish green shipping corridors and call on countries and value-chain actors worldwide to adopt ambitious actions to implement green shipping corridors and create a clean future for maritime transportation.

With so many alternative fuel sources available, it can be challenging to depict the industry’s future and the route it shall take. All ports must have the facilities available to provide several alternative fuel sources. However, changing port infrastructure to support the shipping industry’s transition to a carbon-neutral and net-zero will take time, as governments, stakeholders and international bodies need to make informed decisions. However, the shipping industry is developing extensive LNG infrastructure. This is a cause for concern. As mentioned above, LNG still produces GHG emissions and does not lead the industry to net zero. The industry is spending time and money on something that, in the long run, is not feasible and will only need changing again within 20-30 years to keep up with industry requirements. Although it is a short-term fix, it will not reach the long term goal, therefore there is a need for ports to look beyond short term solutions.