OPINION: Ports, ships and the path to a cleaner future

WE HAVE recently seen several Australian ports celebrating achieving a perfect score in the GRESB Infrastructure Assessment.

But what does this all mean?

The GRESB is an organisation that provides a globally recognised benchmark for assessing the environmental, social and governance (ESG) performance of real assets. It is an industry-led organisation that empowers the financial industry to advance environmental, operational, and financial sustainability across real assets in climate-critical industries.

Members self-report data which is validated by a third party and scored to generate a relevant benchmark for the industry. The benchmarks align with global sustainability priorities, such as the Sustainable Development Goals, the Paris Climate Agreement and major international reporting frameworks.

Participants are being scored on their organisation's ESG policies, management systems, stakeholder engagement practices and ESG reporting, as well as their actual environmental performance of the real estate assets, including energy use, GHG emissions, water consumption, waste management, and building certifications. It also examines the social aspects, such as tenant engagement and community impact.

As most Australian ports are mainly landlord ports it is easy for them to minimise GHG emissions of assets under their direct control; a few buildings, some vehicles and mainly small craft. These are called Scope 1 and 2 emissions. But what about Scope 3 emissions? Scope 3 emissions, according to Ports Australia’s Greenhouse Gas Emissions Inventory Guidance for Ports, are all indirect emissions (not included in Scope 1 or Scope 2) that occur in the value chain, such as emissions of equipment operated by a third-party stevedore, towage operator, etc and other tenants on port land.

Reducing Scope 3 emissions will be much harder to achieve and while some tenants are undertaking steps to minimise their GHG emissions, such as electric dock trucks, hybrid straddle carriers, electric forklifts and rail mounted gantries, electric tugs etc., there is still a long way to go.

Another Scope 3 emission is exhaust fumes from ships while in port. One measure to counteract this is to provide shore power, but who pays for this installation as it is expensive to retrofit? At the recent International Ports and Harbours conference, Ports Australia’s Mike Gallacher stated that: “We’re not averse to it, but the question is, how do you fund it? How do you make it work?” According to Mr Gallacher, there is not one example in the world of an onshore power plant being put into a port that was not funded by government. The Port of Rotterdam aims to make shore power the norm for most ships by 2030, funded through a combination of public and private sources, including the Municipality of Rotterdam, the Dutch Government, the European Union, and private companies. As most ports in Australia are privately owned they will most likely have to fund this themselves.

The path for ships

What about ships and their path towards Net Zero by 2050 which is a mere 25 years away? As we are painfully aware, the last Marine Environment Protection Committee (MEPC) meeting opted to postpone a decision to adopt the Net-Zero Framework (NZF) for the international shipping industry. This was due in part to heavy opposition from the US, with the Trump regime describing the NZF as a “global green new scam tax on shipping”. This delay makes meeting shipping’s climate goals all the more difficult.

What are some shipping lines doing to minimise their GHG emissions? Some are turning to wind power. For example, the Neoliner Origin, a 136m long sail-powered ro-ro cargo ship recently completed its first trans-Atlantic crossing, saving 80-90% in emissions. Other lines are installing sails on ships to help with propulsion and reduce fuel consumption. This usually only delivers a 10-20% reduction in emissions. Many shipping lines are switching to LNG-powered vessels, not really a non-fossil fuel but much less polluting than heavy marine fuel.

Dual fuel propulsion

Several newly ordered vessels are designed for dual fuel propulsion, with the option to switch to fossil-free fuel, such as biofuel methanol, ammonia and hydrogen, at a later stage when it’s more readily available and economically viable. Shortsea shipping is already switching to battery-powered ships. There are currently large container ships on the drawing board that will be powered by thorium-based molten salt reactors or similar small modular nuclear reactors. It remains to be seen if this is a viable solution.

We have seen a rapid evolution of electric vehicles, but will we see a similar development for ships, which require vast amounts of energy to transport millions of tonnes of cargo across the globe? It will require a massive effort from governments and shipping lines to achieve this goal by 2050.