To meet the Paris Agreement climate targets there needs to be a significant reduction in emissions from part of the global economy and its underlying supply chain. Currently, the shipping industry contributes between 3 - 4.5% of worldwide emissions – approximately 1.1 billion tonnes of CO2 per year. By comparison, the aviation industry, (which is under a huge amount of pressure to reduce emissions) is responsible for approximately 650 million tonnes of CO2 emissions per year- just over half that of the maritime industry. Alongside these CO2 emissions, the UN’s IPCC report showed that other pollutants from shipping, including sulphur compounds and soot, are rising even faster than CO2 emissions.
The International Maritime Organization have set the goal of reducing the shipping industry’s emissions by at least 50% by 2050 (which equates to approximately 85% CO2 reduction per vessel), evolving to zero carbon emissions as soon as possible after this within the century. These targets have meant that many shipping companies are actively considering switching to low/zero carbon fuels.
The industry is currently almost entirely based around fossil fuels as the energy source, which means that it will be a tough sector to decarbonise. In addition, port operations consume energy, which is mainly diesel fuelled today.
This is the first article of a two-part series that sets out some of the possible approaches to:
1. decarbonise port operations, and
2. enable the switch to low/zero carbon shipping fuels
to reduce the total emissions arising from the industry.
Figure 1: Typical Port Operations showing vessel loading, unloading, container storage and warehousing, container inbound/outbound logistics
Port Operations:
The shipping industry accounts for around 80% of the volume of global trade. Ports provide a place for the loading and unloading of cargo, off all kinds, shipped from all over the world. The map below shows global shipping movements and gives a clear sense of the massive scale of this industry. The colours are:
· Container (manufactured goods): yellow
· Dry bulk (coal, aggregates): blue
· Tanker (oil, chemicals): red
· Gas bulk (liquefied natural gas): green
· Vehicles (cars): purple
Figure 2: Global shipping movements [Shipmap.org]
The management of this massive number of movements is a huge logistical challenge - a mix of cranes and forklifts are operating 24/7/365 to get the goods on and off the ships in the ports. Currently, the cranes (“straddlers”) are powered by electricity (fossil-fuel derived in many locations) and the forklift trucks are run off a mix of electricity and diesel, depending on the distances and the specific service they are used for.
There is a huge market opportunity for ports to decarbonise their operations to grow market share by attracting new customers who are increasingly seeking a low or zero carbon supply chain. As an example, Unilever, the Dutch chemicals to consumer products company, is one company that has a firm vision to become a global leader in sustainable business. Their climate action goals are to achieve net zero emissions from all their products from sourcing to point-of-sale by 2039, to halve the greenhouse gas impact of their products across the lifecycle by 2030 and to have zero emissions from their operations by 2030. This also implies a complete decarbonisation of their supply chain, including the logistical elements.
Other logistics-heavy companies such as Amazon or Proctor and Gamble have similar goals and are examples of how fast-moving consumer goods (FMCG) companies are driving down the carbon emissions from their complete supply chain. These provide great customer targets to attract and grow market share (versus other regional or international ports) as part of a port decarbonisation strategy.
The accessibility of ports to a local distribution network also offers the opportunity for ports to become a zero-carbon energy centre - such as being able to provide a green hydrogen fuelling station for municipal vehicles. The exact feasibility of this would need to be examined on a case-by-case basis.
It is also possible to consider going one step further by integrating port energy supply with the wider distribution within the country - for example, supplying green hydrogen fuel for trucks and trains moving containers and products from the port to the main distribution centres across the country. This provides some perspective of the attractive opportunity that is becoming available for port operating companies to become a major energy hub supplying all of these (and more) vectors.
TAQA and Abu Dhabi Ports recently announced a joint initiative to produce green hydrogen and green ammonia within the port operations to exploit exactly this type of opportunity.
One possible approach to decarbonise ports would be to generate green hydrogen. The hydrogen would be produced on site using an electrolyser, powered by renewables. This hydrogen could then run hydrogen fuel cell vehicles (HFCVs), trains, the cranes and ships all operating at the port. The flow diagram below shows how this approach could work.
Figure 3: Overall concept of zero-carbon port operations
Figure 4: Detailed concept of zero-carbon port operations
To conclude, there is an emerging, and significant market opportunity and growing commercial incentive for ports to closely examine the business potential of decarbonisation of operations. The concept outlined above could provide benefits to the local area and the regional energy network.