Baseline & ambitions
The sustainable and smart port of the future
The sustainable and smart port of the future serves as a crucial hub to markedly reduce emissions from the maritime and transport sectors, while enhancing the efficiency of freight transport. This transformation contributes to rendering international trade more sustainable and efficient.
The objective of a sustainable and smart port of the future is:
- The ships operate using sustainable maritime fuels.
- The vessels employ an optimized route planning system to arrive at the berth in a well-planned and just-in-time manner, thereby minimizing energy consumption.
- The service vessels in the port are either fully or partially electrified or operate using hydrogen as fuel.
- While at berth, the vessels are connected to onshore power supply.
- In the port terminals, cargo handling is emissions-free. Handling equipment is either electrified or operates on hydrogen as fuel.
- The terminal yard is optimized to maximize efficiency and minimize energy consumption from the operations. The terminal is partly or fully automated.
- For land transport, there exists an effective intermodal connection between the port terminal and the railway and/or inland waterway infrastructure. The internal transport is facilitated by electric and self-driving vehicles. Trains arrive and depart from the port in a meticulously planned manner. The loading and unloading of trains are conducted using electrified equipment, ensuring an environmentally sustainable approach.
- Truck transports are carried out by electric trucks or trucks powered by hydrogen.
- The trucks employ an optimized route planning to arrive and leave the port terminal in a well-planned and just-in-time manner, to minimize energy consumption.
- The flow of goods to, from, and through the port is smooth and well-planned. There is extensive data-sharing throughout the logistics chain to ensure that every stakeholder has access to all relevant information needed to optimize their respective operations.
- The energy used for electrification of terminal equipment, trucks and trains is derived from renewable and fossil free energy sources.
- Carbon capture from ships and utilizing of the CO2 in operations for other industries or storage.
All in all, the target for the sustainable and smart port of the future, ought to be zero emissions of GHG and NOx- and SOx-particles from vessels, terminal operations and land transport and highly efficient operations securing smooth flows without congestion, waiting times or unnecessary freight handling activities.
Emissions from port operations and maritime sector today
In 2022, international shipping accounted for about 2 percent of global energy-related CO2 emissions. At the EU level, maritime transport represents 3-4% of the EU’s total CO2 emissions. As of today, the transition to becoming a sustainable and smart port has begun, with several pioneering examples around the globe. However, additional initiatives need to be implemented in the ports to have a substantial impact. There is still a long way to go to achieve a zero-emissions status and to fully exploit the benefits of digitalization for facilitating more efficient transport flows.
Port of Gothenburg GHG emissions
Using the Port of Gothenburg as an example of a multi-port to illustrate which are the sources of GHG emissions, it is clear that sea transport constitutes the majority of emissions. Even if significant reductions can be achieved by energy efficiency measures, a rapid uptake of renewable fuels will be key. See figure representation below:
Figure 1 - Distribution of GHG emissions (ton CO2e) WTW per mode of transport and port terminals in the Port of Gothenburg 2022. Source: IVL Svenska Miljöinstitutet.
For the Port of Gothenburg, the total GHG emissions for 2022 are estimated to be around 200,000 tons CO2e. Sea transport constitutes the largest share, accounting for approximately 84% of the total emissions. Sea transport includes emissions from vessel activities while at berth, maneuvering, at anchorage, and during the fairway approach to the port, which, for Gothenburg, refers to the distance from the port terminals to the Vinga lighthouse (around 1.5 hours sailing time). Of the total vessel-related emissions, approximately 50% are linked to emissions from time at berth and 25% to emissions from the fairway approach.
On the land side, emissions from truck and railway transport are reported for activities within the geographical area that corresponds to the city boundaries of Gothenburg. Truck transport represents about 15% of the total GHG emissions, while railway transport constitutes to less than 1%.
Emissions from the port terminals (including the container terminal, RoRo terminal, RoPax terminals, and automotive terminal) include Scope 3 emissions and account for about 1% of the total emissions reported for the Port of Gothenburg. For further information on Scope 3 emissions, please see: https://ghgprotocol.org/scope-3-calculation-guidance-2.
Emission outlook globally
Sea
The IMO reports that over 99 percent of the global fleet, totaling more than 29,000 ships, relies on fossil-based fuels. However, DNV's Alternative Fuels Insight (AFI) platform reveals a substantial increase in orders for alternative fuel vessels. In 2023, around 800 vessels worldwide operate on alternative fuels, compared to 100 in 2016 and 200 in 2020. Projections suggest that by 2028, approximately 1,200 vessels globally will run on alternative fuels, with the introduction of the ETS expected to further accelerate this transition.
Port terminals
A second crucial step in reducing GHG emissions from vessels is for ports to provide onshore power supply at berth, with ships ready to utilize it. Currently, the majority of ports and vessels do not offer or use onshore power supply. However, several ports globally have invested in onshore power supply equipment, and the introduction of AFIR regulations is anticipated to markedly expedite this progress. In port terminals around the world, most of the terminal equipment operates on fossil-based fuels. However, equipment suppliers have developed equipment using electricity or hydrogen as fuel and these vehicles are being introduced in progressive port terminals.
Hinterland transport
In land transport, the majority of trucks rely on fossil-based fuels. According to the International Energy Agency (IEA) Global EV Outlook for 2022, zero-emission trucks are gaining market share. Global sales of electric medium- and heavy-duty trucks more than doubled in 2021 compared to 2020, surpassing 14,200 units. However, this represents less than 0.3% of total registrations. Notably, China accounted for almost 90% of electric truck registrations in 2021.
Digitalization
Digitalization of logistics activities enhances efficiencies and supports the transition to achieve reduced emissions in port call, terminal operation, and intermodal transport solutions. Currently, the level of digitalization is generally low, but several ports have made digitalization a strategic pillar. For instance, in June 2021, the Port of Tanger Med achieved the world’s first digitally controlled port arrival, ensuring the safe and on-time docking of the container vessel Kobe Express at the Moroccan port.
In conclusion, the demand for vessels, terminal equipment and trucks on alternative fuels are on the rise, albeit from very low levels. Consequently, there is a substantial gap between the current status and the vision of the sustainable and smart port of the future.
The attached PDFs contain tables outlining sustainability ambitions and targets for global ports, Swedish ports, and international shipping lines. These tables offer valuable insights for understanding, benchmarking, and identifying sustainability efforts within the global maritime sector. The information was collected during the second quarter 2023, from webpages and sustainability reports published by the various ports and shipping lines.
Ambitions & Targets - Ports around the globe
Ambitions & Targets - Ports around Sweden
Ambitions & Targets - International shipping lines
A global outlook – Who’s taking the lead?
Forerunners – Ports
The level of ambition and environmental initiatives vary among ports worldwide, with most aligning with their respective nations' carbon neutrality targets. Overall trends and patterns demonstrate the ports' commitment to environmental sustainability. However, the emission targets of multiple ports remain unclear and unspecified, potentially leading to ambiguity in the steps they should take. Some ports aim to compensate for their emissions, while others strive for no absolute emissions. There is also an apparent lack of clarity on how different ports define "carbon neutral" or "net-zero emissions."
The Port of Oslo has the most ambitious mission, aligning with its nation’s target to achieve zero emissions by 2030. The Port of Hamburg is targeting climate neutrality by 2030. Additionally, the Port of Valencia and the Port of Los Angeles and Long Beach can be considered as front runners, as both these ports have zero emission targets ahead of their respective nation’s goals. By 2020, the Port of Los Angeles and Long Beach had already achieved its goal of reducing emissions to 40% below 1990 levels, well ahead of its 2023 target.
Swedish and Nordic ports are close behind. The Port of Gothenburg and Stena Line targets a 70% reduction in CO2 emissions for vessels calling the port, port activities, and land transport within the city boundaries (from 2010 levels). Also, the Port of Helsingborg aims for net zero by 2035, and the Port of Trelleborg by 2040.
Finally, it may also be observed that Port of Shanghai, the largest container port in the world, is the only international port studied with no concrete emission reduction target before 2060.
Forerunners – Shipping lines
There is an overall trend of increased environmental awareness among all shipping companies. However, the level of ambition and environmental initiatives differs across the industry and home countries. In general, European companies have a stronger focus on environmental sustainability, with more detailed plans and initiatives.
For the goal of achieving net-zero emissions, Danish Maersk and German Hapag-Lloyd are the most ambitious, setting targets for 2040 and 2045, respectively. MSC, CMA CGM, Evergreen, and ONE all have their targets set for 2050.
Danish DFDS aims to reduce CO2 emissions by 45% by 2030, while Swedish Stena Line aims to decrease CO2 emissions from their vessels by 30% until 2030 and plans to launch their first vessel without CO2 emissions.
Chinese COSCO is the least ambitious, setting a target for 2060, aligning with China’s national target.
The potential – Emissions from a logistics chain before and after
To realise the potential of reducing emissions, it is relevant to study an entire transport chain before and after the implementation of emission reducing investments. To understand the potential effects of such improvements, it is important to understand how emissions are distributed among the different modes of transport used in the specific transport chain. Also, it is important to understand that how the electricity and the alternative maritime fuels are produced, have substantial impact on the potential of reducing emissions.
IVL Swedish Environmental Research Institute has – specifically for this project – conducted calculations of emissions for four different illustrative transport chains, of which one is described below and three more are available here.
In this transport chain, Case 1, rolls of steel press plate (7 tons cargo weight per steel roll) are transported from Borlänge in Sweden to a car manufacturing production plant in Bremen, Germany. From Borlänge to Gothenburg, electrified railway transport is used. In Gothenburg a short semi-trailer truck transport is used from the intermodal railway terminal to the port terminal. The next step in the transport chain is a RoPax vessel from Gothenburg to Kiel and onwards using semi-trailer truck transport from Kiel to the final destination in Bremen.
Total distance of this transport chain is 1 150 km. Of this distance, railway transport covers 40 % and sea transport 42 %. The truck transport between terminals in Gothenburg is less than 1 %, whereas the truck transport between Kiel and Bremen corresponds to 17 % of the total transport distance.
In scenario A, a Business as Usual (BAU) case, conventional diesel trucks are used for the road transport, using diesel from the Swedish and German or Belgian markets respectively. The RoPax-vessel is not connected to shore-power and the vessel operates on conventional fossil maritime fuel (Marine Gas Oil, MGO).
In scenario B1, electric trucks are used operating on residual(i) electricity mix according to the 2022 conditions in Sweden and Germany or Belgium respectively. The RoPax-vessel is connected to shore-power using electricity residual mix of Sweden. The vessel still operates on conventional fossil maritime fuel, MGO.
In scenario B2, the electric trucks and the shore-power equipment are soured by electricity produced by hydro power.
In scenario C1-4, the fuel of the RoPax-vessel is changed from conventional fossil maritime fuel (MGO) to two versions of e-methanol and liquified biogas (LBG) respectively, with alternative ways of production.
In C1, the e-methanol is produced using electricity residual mix of Sweden. Also, the electric trucks operate on the electricity residual mix of Sweden and Germany or Belgium respectively.
In C2, the e-methanol is produced using hydroelectricity. Also, the electric trucks operate on electricity produced by hydro power.
In C3, the biogas is of Swedish methane gas mix. The electric trucks operate on the electricity residual mix of Sweden and Germany respectively.
In C4, the biogas is produced from locally sourced manure. The electric trucks operate on hydroelectricity.
(i) – Residual electricity mix is the mix of electricity production remaining after removing the electricity production volumes sold with guarantees of origin.
Results
Conclusions
As a general conclusion, there is a significant potential to reduce GHG emissions from freight transport!
From scenario A, it is clear that electrified railway transport – given that the electricity generation is fossil free – generates very low emissions. Railway transport covers 40 % of the distance but cause only 0,01 % of the total emissions. Also, it is clear that sea transport makes up the largest share of emissions (77 %), of which 5 % stems from fuel consumption while at berth and 72 % from fuel consumption at sea. Therefore, the uptake of alternative maritime fuel is key to reduce GHG emissions in the entire transport chain. Emissions from terminal handling only represents about 0,25 %.
Scenario B1 and B2 illustrates that the source of electricity is decisive to gain benefits from investments in electric trucks and onshore power supply installations. Using electricity residual mix (B1) gives only 1 % emission reduction, whereas with electricity produced by hydro power (B2) the emission reduction is 28 %. Also note that with the electricity residual mix of Germany, with relatively high shares of fossil hard coal and fossil natural gas, it is a worse case using electric rather than diesel trucks.
Scenario C1-C4 clearly show that the shift from MGO to alternative maritime fuels gives substantial emission reductions. However, the result will vary significantly depending on how the fuel is produced.
Using e-methanol produced using Swedish electricity residual mix 2022 (C1) gives a 56 % reduction, whereas e-methanol produced using hydroelectricity (C2) gives a 99,9 % reduction of GHG emissions!
Using liquified biogas according to the biogas mix in Sweden (C3) gives a 71 % reduction. Using locally sourced biogas from manure (C4) involves negative emissions of GHG and gives a 106 % reduction of emission from the transport chain.
What has to happen?
The challenge - Why don’t we move faster toward sustainability?
The challenge to accelerate the development towards more sustainable and smarter ports is multifaceted and complex. Ports serve as hubs connecting multiple stakeholders along the logistics value chain - cargo owners, freight forwarders, shipping lines, port terminal operators, train operators, and haulage companies. These stakeholders, operate under different types of ownership (public and private), with their own business agendas, models, and targets. Since no single stakeholders holds full authority over the logistics value chain, integrated and committed collaboration will be crucial to drive change and improvement. Given that ports connect international trading routes, these stakeholders are likely to be dispersed across countries and continents, adding an extra layer of complexion to establish collaboration, and driving change.
Furthermore, the maritime and transport industries are traditionally low-margin sectors offering a product often regarded as commodity. Therefore, competition is typically centers around price and the transport buyers’ willingness to pay a premium, especially for sustainable transport, is considered limited. Given the global nature of the shipping industry is global and the international regulations set by the IMO, the national governments have limited power to drive change in the maritime industry by their own national regulations. Therefore, the FIT for 55 regulations, introduced by the EU in 2023, represents a noteworthy milestone, in driving change through regulatory demands.
As of today, the production and supply of new fuels, terminal equipment, and electric trucks remain at a relatively small scale, contributing to high prices compared to conventional alternatives. For instance, the upfront investment cost for an electric truck is approximately 300% higher than for a modern diesel truck. Scaling up the usage of alternative maritime fuels, the electrification of port terminals, or the truck fleet involves both technical and economic considerations with technical solutions already existing today for fuels, onshore power supply, and terminal equipment.
However, scaling up requires significant investments. This could involve a fuel producer establishing production plants and storage facilities for alternative fuels, a port authority implementing onshore power supply for all terminals, shipping lines retrofitting or building new vessels for alternative fuels or onshore power supply, a port terminal operator replacing the fleet of terminal equipment, or a haulage company investing in electric trucks.
Beyond the listed capital expenditures (CAPEX), there's the challenge of higher operational costs (OPEX), particularly for alternative maritime fuels. Studies indicate a price gap between conventional and alternative maritime fuels of up to 300–400 percent. As of 2023, the supply of alternative maritime fuels is limited, and price levels are uncertain.
A major challenge for companies in the international logistics value chain is making these heavy investments in a context of uncertain demand and low willingness from customers to pay a premium for sustainable transport solutions.
What will it take to accelerate the transition?
To accelerate the shift toward more sustainable and smart ports, collaboration among partners along the logistics value chain is imperative. Overcoming the challenges requires a collective effort, as no single port or partner can achieve this transition alone. While individual companies taking the lead is essential, their efforts can be magnified through dedicated collaboration with like-minded partners.
Initiating such collaboration involves moving away from siloed work and adopting a holistic approach that encompasses the entire logistics value chain. This includes ports, shipping companies, port terminal operators, haulage companies, train operators, and stakeholders like transport buyers and cargo owners.
Strategic collaboration is pivotal for establishing sustainable transport corridors, acting as a catalyst for the transition in specific transport relations. In these collaborations, partners, guided by a shared level of ambition, collaboratively address challenges to create sustainable transport corridors. The development of these corridors should follow a clear roadmap to which all partners commit. As observed in other industries, the frontrunners and pioneers are expected to lead the way.
Digitalization and data sharing can enhance the efficiency of the logistics chain, leading to reduced costs and lower energy demand. However, for a complete transition, the shift to renewable and fossil-free energies and fuels is essential.
A critical aspect is to identify viable partner interfaces and business models that facilitate necessary investments and ensure a balanced sharing of risks and profits. Achieving this requires partners to maintain full transparency and make long-term commitments. While these investments address the transition's infrastructure aspects, there will be ongoing challenges in operational costs. Particularly in the case of alternative maritime fuels, where costs can be 3-4 times higher than conventional fuels.
The financial challenges associated with the transition are expected to increase transportation costs. Incentives and support from governmental and EU levels will play a crucial role, both in terms of capital expenditures (CAPEX) and operational expenditures (OPEX), especially during the initial stages of the transition. Additionally, transport buyers, cargo owners, and end-consumers are likely to be willing to pay a premium for goods transported through a sustainable logistics chain.
Photo in header: Port of Gothenburg
