At TOC Europe, which was held in Rotterdam in June, the conference sessions at the event’s Sustainability Theatre were some of the best attended, illustrating just how important environmental issues have become in the liner shipping, logistics and port/terminal sectors of the industry.

Delegates, it seems, were keen to gain insight into the most efficient and cost-effective ways of cutting emissions, of the choices available, for instance, on future fuels for ships, and on the advantages and disadvantages of using fully electric or hybrid machines in their ports, terminals and distribution centres.

In most sessions, the overriding themes were the same – that cooperation between all stakeholders is critical, that planning is crucial and decisions should never be rushed and that, in the longer term, costs, particularly operating costs, can be trimmed.

Addressing the session entitled ‘Energy Transition across the Supply Chain’, Professor Lynn Loo, CEO of the Global Centre for Maritime Decarbonisation  (GCMD), said: “Decarbonisation is important, decarbonisation is necessary, but decarbonisation is also hard, especially at the pace and at the scale we are talking about.”  She added: “Moving to a green fuels supply chain is complex and it involves many stakeholders, the interdependency between them of which is not always linear. Therefore, a holistic approach must be adopted, with all parties working together closely as it is important that the whole chain works.”

Loo stressed the significance of planning. “It took more than a century to build our current oil infrastructure and bunkering systems, and here we are, talking  about leaving oil and gas in less than 30 years. This is a big challenge and it’s not going to be a step change that we see but a transition. It’s a question of coming up with near-term and mid-term solutions so that the transition becomes easier and that the net-zero emissions target is achieved in the long term.”

Headquartered in Singapore, GCMD’s main role is to help the maritime industry eliminate greenhouse gas (GHG) emissions by shaping standards, developing solutions, financing projects, and fostering collaboration across the sectors. It is a public/private partnership (backed by the government of Singapore).

“Our aim is to help the industry accelerate its decarbonisation journey by conducting pilot studies and trials,” Loo told delegates. “We put various solutions on our partners’ ships and on land, and what we learn can then be used to help lower the adoption barriers.”

Testing ammonia

GCMD, which was established in August 2021, has undertaken several studies and trials so far, including what Loo described  as “a big initiative looking at the safety of ammonia bunkering”. She explained: “Ammonia has never been used as a marine fuel and ammonia is a toxic chemical so the safety is really, really important.”

GCMD coordinated the study by gathering together 22 partners with experience in handling ammonia, consulted eight regulatory agencies, and processed feedback  from 130 so-called industry consultation and alignment panel members. The actual study was undertaken by DNV, Surbana Jurong and the Singapore Maritime Academy (SMA). Its findings are being used in a variety of ways. These include:

● Elements of it being incorporated into the SMA curriculum, where it is being used in special workshops for competency training.
● The drawing up of draft safety guidelines, which GCMD has submitted to standard development organisations. 

“Last but not least, this study forms the basis of continuing our discussions with the regulators and port authorities because we  would like to do a pilot – a shipto-ship ammonia cargo transfer in port limits – to ready the ecosystem, to build competence and confidence in ammonia bunkering once those ships become available,” said Loo.

GCMD has also conducted a study on ‘green’ fuels (biofuel). This was initiated on the back of an apparent lack of interest from  its partners, which include the container ship operators HapagLloyd and Ocean Network Express, in using biofuel as a drop-in replacement fuel. She explained that there were two main reasons for this – the higher price of biofuel and the lack of transparency  across the supply chain, with several lines concerned about the quality of such fuel being supplied.

“We have developed a pilot to trace the transparency of the fuel by tracking the biofuel, from its origin all of the way down the  supply chain to when it is combusted, in order that we can provide an assurance framework on the quality, quantity and carbon abatement potential of the biofuels being purchased,” said Loo. In this pilot, GCMD worked with 14 shipowners and/or charterers who nominated fuel suppliers. The vessel used plied commercial routes.

Loo would not be drawn on what type of fuel was likely to prove the most important in the future, stressing that multi-fuel choice would still prevail and  that there was nothing unusual in this. “We will transition from one portfolio of mixed fuels, where heavy fuel oil, low sulphur fuel oil, marine diesel and gas have been the main choices, to one  where biofuels, LNG, ammonia and methanol will feature,” she said.

LNG to methanol

Despite several shipowners ordering dual-fuel LNG-compliant and LNG-ready ships in recent years, this type of fuel choice appears to be losing out in the long term to methanol and ammonia. Partly this is because authorities and environmentalists are becoming increasingly concerned about the level of emissions of methane from the burning of both LNG and compressed natural gas. This is certainly the case in southern California where interest is switching to ‘green’ methanol as the future fuel for ships.

At least some of the Maersk Line ships (18 x 16,000 TEU) on order at Hyundai Heavy Industries in South Korea will be fuelled by methanol, while all 24 ships recently contracted by Evergreen – and split between Samsung Heavy Industries in South Korea and the Nihon Shipyard in Japan – will be delivered methanol-ready. CMA CGM is also investing in dualfuel methanol tonnage, with 6 x 15,000 TEU ships on order at China State Shipbuilding Corp. This is despite the carrier’s huge investments in LNG vessels.

“From a pure cost perspective and assuming the supply of green hydrogen is not a huge bottleneck, ammonia will be cheaper than methanol, as the latter requires either a direct biogenic carbon source or air-captured carbon in order for it to be a zero-carbon fuel,” explained Loo.

“However, from a supply chain and logistics perspective, methanol is better as some infrastructure is in place and some bunkering, including in the Port of Rotterdam, has taken place,” she said. “Ammonia has a much steeper hill to climb on this front, while the toxicity of the product means that it is likely to be available in only a few ports.”

Whatever the nature of any transition, significant upfront costs will be involved and collaboration between all stakeholders will be critical. Indeed, this was the overriding message to come out of all sessions relating to sustainability at the conference.

Ready to contribute

Elisabeth Munck, global sustainability manager of IKEA’s supply chain operations, is keen to work with service providers and even provide financial support in the initial period. “We know the transition will cost a lot of money and take time and we are willing to collaborate with our partners, co-create solutions and, initially at least, share in the investments that will be needed,” she said.  “We have our own targets to decarbonise our supply chain but we know this cannot be achieved without the support of our service providers. They need to be fully on board and they need to share their journey with us. Collaboration is key.”

Bonnie Nixon, director of sustainability at Long Beach Container Terminal (LBCT), also cited the importance of collaboration. She told delegates: “It’s important as a container terminal that we collaborate with everybody in our supply chain, especially the beneficial cargo owners and retailers because we are partly responsible for their Scope 3 emissions.”

IKEA’s supply chain emits about 1.3 Mt of GHG a year, which is approximately 5% of the group’s total carbon footprint. Over 50% is produced by land transport services, principally trucks, followed by ocean transport, and then logistics, which Munck said “accounted for only a small fraction”.

IKEA is determined to cut emissions in all of its supply chain sectors and has set itself aggressive timeframes in which to do this.  “We want a clean and fair goods flow. By this, we mean having 100% zero-emissions transportation across our supply chain and also utilising 100% renewable energy,” she said.

IKEA has committed to only using vessels with zero emissions and fully-electric or hydrogen fuel cell heavy-duty trucks for moving its  freight by 2040. IKEA is a member of the Zero Emission Maritime Buyers Alliance (ZEMBA), which recently announced that it was preparing its first Request for Proposals (RfP) for zero-emissions shipping services that it wants to  be delivered by 2025. ZEMBA defines zero-emissions service providers as those that achieve at least a 90% reduction in emissions on a life cycle basis for GHG as compared with traditional petroleum products.

Kick-start

“Through this RfP, ZEMBA is kick-starting the transition to zero-emissions fuels in an industry that is responsible for 90% of all  global trade,” said Ingrid Irigoyen, president and CEO of ZEMBA. “Ahead of the RfP launch, we encourage additional cargo owners to join us and receive early access to zero-emissions shipping services, which are not yet available today. This groundbreaking effort  to decarbonise a hard-to-abate sector will put the ocean shipping industry – with policymaker support – on a path forwards that supports the goals outlined in the Paris Agreement and makes good business sense in a world where consumer values are evolving.”

Through the RfP, members of ZEMBA will commit a portion of their demand for maritime shipping to zero-emissions services, a volume that the association expects to total at least 200,000 TEU in 2025.

In her presentation, Munck outlined the practical aspects of IKEA’s decarbonisation programme, saying that the company’s decarbonisation agenda was based  on the three ‘Rs’ – reduce, replace and rethink. “Reduce is about improving efficiencies in everything the company does and working on continuous improvement policies, including driving fuel efficiencies,  energy efficiencies, equipment utilisation rates, network optimisation and digitalisation.”

She continued: “Replace is about replacing fossil fuels with alternatives such as biofuels in the shorter term and then driving to  zero-emissions fuels longer term. Rethink is about integrating innovations into our supply chain, but importantly, it is also about innovation in collaborations, how we collaborate with each other’s supply chains to drive transformation.”

Operationally, IKEA is focused on shifting from pure trucking services to intermodal solutions. “We now have more than 50%  of our tonne/km land traffic movements using intermodal solutions,” said Munck. “This not only cuts emissions by 50% compared with a diesel truck but also reduces the number of trucks on the road, meaning less highway congestion, better life balances for drivers, shorter on-carriage and pre-carriage distances which increases the possibilities for the trucks to be electrified.”

Emissions/efficiency

At LBCT, considerable efforts have also been made to boost productivity levels, increase operating efficiencies and invest in  infrastructure, as this can have an immediate impact on fuel  consumption and emissions. All ships calling at LBCT are turned around quickly, and when in port, are plugged into shoreside electricity. “In 2021, no vessel bound for LBCT was anchored and waited for a berth,” said Nixon.  “Indeed, we handled an additional 37 ships and played a part in decongesting the port.”

Similarly, when it comes to landside operations, trucks enter and leave LBCT very quickly. In the last four months of 2022, average turn times per month at LBCT were in the range of 33 to 35 minutes, compared with 76 to 78 minutes at other container handling facilities in Long Beach. “Less idling and queuing means  more trips and fewer emissions,” said Nixon.

The director also said dwell times in LBCT’s intermodal rail yard were much shorter than elsewhere in the San Pedro Bay port complex. “Our average dwell time for containers in the intermodal rail terminal is three and a half days and that compares with between four and seven days at most of our competing facilities,” she said. Currently, 30% of containers handled at LBCT are moved by rail and the plan is for this to increase to 40% by 2030.

In her presentation, Nixon stressed, though, that more needed to be done on making rail more environmentally friendly and alluded to discussions taking  place on electrification. “This is a real challenge as our trains are double-stack and the distances most containers are moved are large,” she said. 

These operational initiatives, along with the use of various pieces of new cargo handling equipment, have reduced the terminal’s cargo footprint substantially.  “We’ve seen nitrous oxide and sulphur oxide emissions cut by 90% and 42%, respectively, and diesel consumption cut by 52% since 2015,” she said. “In contrast, our throughput is up 224%,” she said. 

The port has made considerable progress on cutting its emissions and decarbonising its activities as it strives to be the greenest terminal in the US but more needs to be done. Nixon wants the port’s Scope 1 emissions to be net-zero by 2030. LBCT is also actively addressing Scope 2 emissions. “Southern California Edison, which supplies our electricity, generates just under 50% from renewables and this will increase to 80% by 2030. But we will look for other partners so we are 100% clean energy from 2030,” she said. LBCT also earns renewable energy credits from a series of bio-gas ventures in central California.

But Nixon believes the port could become self-sufficient in energy. She explained: “We have three large solar arrays and five LEED-certified buildings, plus two of the largest battery exchange buildings in the world. It is our goal over the next few years to transition the type of battery we use and to conduct energy storage in these buildings. Ultimately, we could become self-sufficient when it comes to our energy needs.”

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This complete item is approximately 2355 words in length, and appeared in the July/August 2023 issue of WorldCargo News, on page 13. To access this issue download the PDF here