West Coast port leaders are becoming more and more concerned about the immediacy of climate change. As global temperatures increase, sea level rise, fire, drought, flooding, extreme weather events and heatwaves follow. All of these factors have both subtle and severe long-term effects on systems of all kinds, both human and environmental.
The problem is urgent, but it is solvable—if smart actions are taken now. There are a range of potential solutions, including new policies, new and improved technologies, and redesigned market and financial instruments. While each port, each community, and each company will choose their own path, a comprehensive approach requires rethinking all elements of the equation: mobility systems; infrastructure; operational processes; investment priorities; how energy is moved and consumed; and new types of fuels.
Most of the West Coast port administrations appear to be increasingly aware of their climate change vulnerability, ecologically and economically, and have made commitments to sustainable development strategies. Like all of the world’s ports—and like all of their associated coastal transport infrastructures—the West Coast ports are exposed to the risk of climate change-related impacts. Warming climate impacts in North America will be felt severely in coastal zones, low-lying areas and deltas, data show. This will have broader implications for international trade and for the development prospects of the communities that depend upon such ports.
Whenever ports are hurting from climate-related damage, disruption and delay, the pain is felt all across supply chains, with significant associated costs and economic and trade-related losses. Therefore, enhancing the climate resilience of ports is a matter of strategic economic importance. Ports are now seen by the Biden Administration as an integral part of local economies, and as a linchpin of the global trading system. For this reason, the federal government is moving quickly to focus on the strategic role of ports in achieving the climate numbers within the Paris Agreement, the international climate change treaty adopted in 2015.
Rising sea levels. Increased frequency and intensity of extreme storm surges and waves. Other weather extremes, like intensifying droughts and/or river flooding. Increased average temperatures and wild temperature variabilities. These are some of the changes that pose serious threats to ports and other coastal transport infrastructure. The day-to-day operational impacts are already being felt on the West Coast. For larger ports, which are tightly integrated within coastal regions extending well beyond one single city, the impacts affect large populations and the broader economy.
Port of Oakland’s Response
Like many other organizations, West Coast ports have been searching for a path forward. Consider the approach which Oakland is taking. The executive team holds the view that, in order to mitigate the worst effects of climate change and adapt to these unsettling conditions, the port needs to develop and deploy climate solutions, with speed and efficiency. The alternative is to risk increasingly destructive outcomes. Importantly, the port thinks that it needs the public to also embrace these ideas.
Early in the process, Oakland’s city government and the port decided to partner up, jointly implementing best practices to lower greenhouse gas emissions from port operations. They are also focused on implementing policies which aim to dramatically improve the climate resiliency of port activities and of the buildings located on port lands.
The partners are focused on piloting new low-carbon technologies, securing grant funding for building out clean energy infrastructure, and better strategies for protecting the communities that have the greatest exposure to port activities. Collaborative investments are being made in green infrastructure and adaptation strategies. This is being done by enhancing their community partnerships, while ensuring the ongoing economic viability of port operations.
Direct local emissions at the port come from onsite sources: container-handling equipment, trucks, rail and vessels at berth. There are also direct emissions generated from private businesses operating in port areas, including trucks, rail service and industrial operations. Diesel vehicles concentrated along routes serving the port account for almost a tenth of the City of Oakland’s total greenhouse gas emissions. Although both diesel and gasoline engines create emissions, diesel emissions cause more serious health impacts like asthma and cancer risk. These impacts are disproportionately felt by the primarily low-income communities of color living along the Interstate 880 corridor and in West Oakland near the port.
The seminal move was made on June 17, 2019, when the port approved the 259-page “Seaport Air Quality 2020 and Beyond Plan.” It details the port’s pathway to zero emissions, and it emphasizes new infrastructure as well as alternative power sources, including an Air Quality Plan that drastically cuts diesel and GHG emissions resulting from the port’s maritime operations. The plan is focused on achieving a zero-emissions operation in the future and provides a framework for maritime development for the next 30 years. The plan also calls for changes in equipment, operations, fuels and infrastructure at the seaport.
A few examples of the port’s projects, as outlined in the plan, include:
- Converting port fleet vehicles and equipment to zero-emissions.
- Installing electric infrastructure at container terminals.
- Tracking yard equipment for fuel consumption, operability and performance.
- Identifying cleaner fuels and alternative, renewable power sources.
An Industry-Wide Reckoning
There seems to be an emerging consensus among executives in the maritime shipping and ports industry that the time to act on climate change is now. Global leaders and citizens are calling for ambitious climate action to avoid the worst impacts of climate change. As attention to all parts of the world’s economy ramps up ahead of the international climate negotiations at COP26 (the United Nations Climate Change Conference) in November, the maritime sector could take the lead and set its own path.
Decarbonization is among the defining issues of our time. The maritime sector has made its first steps towards a low-carbon future, emerging as a leader among harder-to-abate sectors. However, transformative action may be needed due to the urgency of the climate crisis. To meet climate targets and to decarbonize the shipping sector, vessels using zero-emission fuels should be the dominant and competitive choice by 2030.
Full value chain pilots and demonstration projects are needed to demonstrate the viability of zero-emission solutions. While first movers face additional costs and risks, they can become zero-emission front runners and gain the business and investment opportunities that follow.
To make shipping’s decarbonization investable and zero-emission solutions scalable, a supporting policy framework is needed, either in the form of a global market-based measure to guarantee a level playing field, or regional or domestic policy to kickstart the transition. The maritime sector also needs to ensure that its transition to zero-emission fuels is equitable. This is why policy measures must include investments and technology transfers to developing countries.
For those with large renewable energy potential, shipping’s decarbonization represents an opportunity to become exporters of the zero-emission fuels of the future, which will contribute towards job creation, public health and the decarbonization of other sectors.
For the consumer, it is estimated that the extra costs of operating zero-emission vessels would translate into a cost increase of 0.5-1% for a pair of high-end athletic shoes.
“No individual organization can decarbonize international shipping,” Maritime and Port Authority of Singapore Chief Executive Quah Ley Hoon said. “We need to come together to share experiences, work on solutions through value chain collaboration and scale up.”
UN Secretary-General António Guterres is convinced that “zero-emissions ships must become the competitive choice by 2030, and we need credible market-based measures to get there.”
To enable shipping’s decarbonization in line with the Paris Accords, climate experts are in full agreement that by 2030, zero-emission fuels should make up at least 5% of the international shipping fuel mix, by 2036, 27%; and by 2046, 93%. Countries representing more than 70% of global GHG emissions have committed to achieving net-zero emissions by mid-century. To decarbonize shipping by 2050, investments amounting to $1.2-1.6 trillion are needed; 87% of these investments will be required for land-based fuel production and bunkering infrastructure.
What do industry leaders think about this? Søren Skou, CEO of A.P. Møller-Mærsk, recently said that “we are beyond the chicken-and-egg situation between the supply and demand for zero-emission fuels. We have ordered our first ship that will run on a green fuel and every ship we order from now on will be capable of running on a green fuel.”
According to Lois Zabrocky, President and CEO of International Seaways, “business opportunities will arise from shipping’s decarbonization all along the value chain. From developing renewable energies, producing zero-emission fuels, to transporting new fuels, and building new ships and retrofits. What is needed to dive into these opportunities fully is an ambitious and stable regulatory framework.”
In October, Robert Courts, the UK’s Maritime Minister, said that “with COP26 around the corner, I’m keen to see a clear message from industry that they are ready to work in partnership with governments to achieve the targets set out in the Paris Agreement.”
Inaction brings its own risks. As a driving force of the global economy, the maritime sector plays an important role in the lives of the vast majority of people on the planet. This crucial role brings with it a responsibility to provide its services in a way that is sustainable and fair, and meets expectations of governments, investors, customers and citizens.
A group of 42 institutional investors representing $6.6 trillion in assets have joined the UN-convened Net-Zero Asset Owner Alliance aiming at aligning portfolios with the 1.5°C temperature goal of the Paris Agreement. Reflecting this new awareness, 54% of respondents in a BlackRock Inc. investor survey stated that sustainable investing—also known as ESG—is fundamental to investment processes and outcomes. Kristin Holth, a non-executive board member for Maersk Drilling, said that “over time, you will not get access to the best resources, either capital or human, if you do not have a sustainable business model. ESG can be seen either as an opportunity or a burden. We should embrace this as an opportunity, lift our eyes and be pioneering.”
The Bigger Picture: Ports of the Future
By Gordon Feller
To meet carbon emission reduction targets, many ports are now working to become carbon-neutral by redesigning their logistical operations (flow management) and means of production (value creation), as part of an industrial reconversion approach. They’re banking on new environmental technologies to generate a double dividend: environmental and economic.
The word “climate” refers to long-term weather patterns. As the blanket of gases that surround the planet changes, the climate changes. Human activity is releasing more gases that heat the Earth at a faster rate than ever before, and the pace makes it difficult to adapt.
To avoid catastrophic effects on society in the future, humans not only have to stop the build-up, but also reverse what’s been going on since the industrial revolution.
The Earth’s oceans are also absorbing large amounts of gases and excess heat, triggering yet more impacts on the systems upon which life depends.
The impact of the climate crisis is already visible. The 20 warmest years on record all occurred in the past 22 years, according to the World Meteorological Organization. Oceans have absorbed some of the additional carbon dioxide and the excess heat, changing the conditions that sustain our marine life and raising sea levels.
If every nation was meeting the Paris Agreement commitments on climate change, the Earth would still be heading for a 3-plus degree rise. But humans are collectively far behind in meeting these commitments. There are feedback mechanisms, which means a change triggers yet more change— for example, loss of ice in the Arctic stops heat being reflected back away from the ocean, which warms even faster. What we do know is that every day we add more gases to the blanket, and this increases the risk of things getting worse.
West Coast ports are mindful of the latest research, which shows that sea levels are expected to rise on average from 1.1 to 2 meters (3.6 to 6.5 feet) by the year 2100, putting about 14% of the world’s major maritime ports at risk of coastal flooding and erosion.
Maritime transport accounts for about 80% of global merchandise trade by volume. Shipping is responsible for 3% of global CO2 emissions, which have increased 32% over the past 20 years. If nothing is done, shipping emissions could climb to 17% of global emissions by 2050.
Enter the ports of the future. Ports govern globalized economic activity as well as bring all kinds of transport—maritime, land-based, waterway and aeronautic—together. Now, they’re aiming to cut back on real estate, be more respectful of the environment and better integrated into cities.
At least $1 trillion will have to be invested between 2030 and 2050 to reduce shipping’s carbon footprint by 50% by 2050, according to data. As of last year, oil-derived fuels accounted for 95% of the energy consumption in transportation. Meanwhile, maritime traffic is predicted to increase by 35% to 40% over the same period, statistics show.
Due to new environmental standards, the dependence on hydrocarbons represents an economic vulnerability for the maritime shipping sector. As hydrocarbon and coal consumption drops, we could see a steady decrease in fuel shipping.