DocksTheFuture’s 3rd ICC meeting was held on the EU Green Deal and the challenges and drivers for European Ports

The 3rd International Consultative Committee (ICC) meeting

Date: 29th July 2020, Time: 11 a.m. -12 p.m.

Place: Online meeting

The Third International Consultative Committee meeting of DocksTheFuture project took place on 29 July 2020 between 11.00-12.15. The Objective of the conf.call  was to discuss how to implement the European Green Deal objectives in European ports , the drivers and challenges. For this purpose, two officials from the ESPO were invited to present.

The participants of this meeting were from three below groups:

• The ICC extinguished members:   Michele Acciaro, Paul Brewster, Angela Carpenter, Drik’t Hooft, Alessandro.Panaro
• ESPO: Isabelle Ryckbost -Secretary General, & Valter Selén – Senior Policy Advisor Sustainable Development, Cruise and Ferry Network, EcoPorts Coordinator
• Docks The Future (DTF) project’s partners: Circle s.p.a: Mr.Karimpour, Alexio Picco, PortExpertise group: Joris Claeys, Peter Bresseleers, Magellan Association: Andrea Hrzic, ISL Group, and Circle Group.

Mr.Karimpour from Circle s.p.a organised this  Docks The Future conf.call and welcomed the participants. Mr.Alexio Picco from Circle s.p.a that leads the project welcomed the participants of the meeting and explained about the project and its progress. He gave a brief introduction to the project. He mentioned that the project is coordinated by Circle S.p.A (Italy) as the leader of the project working group including ISL – Institut für Seeverkehrswirtschaft und Logistik  (Germany) ,Magellan (Portugal), PortExpertise (Belgium) , University of Genoa (Italy).

After welcoming, Mr. Alexio Picco left the floor to  Ms. Isabelle Ryckbost -Secretary General to present the “ESPO’s Roadmap to implement the European Green Deal objectives in ports”. She started with mentioning the overall view of the EU Green Deal with a focus on three elements of: More than lowering emissions = New Growth strategy, Transforming the economy, “transforming the way we produce and consume”, and Sustainable product policy “Will frame everything what is happening”.

In continuation, she added that Green deal goals are:

• Net-zero by 2050
• 50 to 55% by 2030
• 90% CO2 emission reduction by 2050 for transport
• New Climate Law: enshrining carbon neutrality by 2050 into law

It was stated that ESPO welcomes Europe’s ambition to be the world’s first net zero emission area by 2050. However, this ambition must be delivered in the most effective way while the competitiveness of Europe’s economy must be safeguarded. In addition, it should be noted that achieving this objective will require an unprecedented level of cooperation across all policy departments and stakeholders.

M.s Isabelle at this stage highlighted the importance of the EU Ports as key strategic partners at the crossroads of supply chains, clusters of energy, and clusters of industry clusters of blue economy. They can be a key strategic partner in making the European Green Deal happen.

She added that the greening of the shipping sector is a priority for European ports and ESPO support the IMO target 2018. However, the IMO Target might not be ambitious enough in light of EU Green Deal. The greening of the shipping sector is a priority for European ports. Responsibility lies primarily with the shipping sector.  Europe’s ports are committed to playing their part in helping the shipping sector to make this transition. Close cooperation between ports and shipping lines is required and this cooperation is also largely dependent on decisions of energy producers, energy providers and cargo owners. European Ports are committed to green their own fleet and operations under their own remit.

“European ports must develop a roadmap to prepare for the energy transition of shipping and it should be taken into consideration that European ports are diverse and there is no one approach which can be mandated for all ports. Each port should develop a detailed plan of pathways for facilitating the greening of the shipping sector, taking into account: the markets they serve, type of vessels, geographical location, tasks and responsibilities “. She continued that the EU Ports should assess the need for investments in clean fuel infrastructure on the basis of concrete criteria including:

• The complete life cycle of the fuel including production and transportation up to the point of consumption;
• Emissions of NO_x, SO_x , and PM in addition to GHG emissions;
• Safety of bunkering operations, the infrastructure and the product;
• Technical maturity of fuel (beyond showcase applications);
• The financial resources required to realise the necessary investments.

As she highlighted, a goal-based and technology neutral approach is needed to ensure the uptake of clean fuels for shipping. This goal-based and technology neutral approach is needed to ensure the uptake of clean fuels for shipping, support innovation and avoid stranded assets.  The current level of flexibility as foreseen in the AFID directive should be maintained.

In this respect, a gradual emission reduction standard for ships at berth should be part of a goal-based approach. Reducing the emissions at berth is not in itself sufficient for reducing the overall emission from shipping. Even so, European ports are in favour of a developing a gradual approach to reduce emissions at berths with an initial focus on berths close to urban areas and a focus on particular segments such as cruise ships and ferries. Over time, the objective of zero emissions at berths is achievable. By 2030, CO2 emissions from ships at berth and in ports should be reduced by 50% on average and across all segments of shipping.

She also bolded the On Shore Power supply (OPS) as one of the promising technologies, should be encouraged as an important part of the solution. Onshore Power Supply (OPS) should be encouraged as an important part of the solution and barriers should be taken away.  However, Onshore Power Supply (OPS) to large extent depends segment of shipping. Alternative solutions which achieve the same objectives should be encourages and allowed. Important to consider:

• High cost of OPS solutions
• Electricity shortage (green grids)
• OPS is only addressing emissions at berth
• Price and taxation is a barrier
• OPS can only work if the vessels have the technology
• Case-by-case assessment is needed and must be seen in the context of the rapidly evolving zero-emission propulsion technologies

M.s Isabelle also added the LNG’s role as a transition fuel that should be recognised as one of the compliant fuels for shipping which meets the 0.1% Sulphur cap in SECA areas (since 2015) and also the overall 0.5% sulphur cap which is in place since 1 January 2020. Furthermore, current LNG infrastructure can also be used for bio-LNG in future. It is predicted that LNG will remain a transitional fuel at least for the near future. ESPO’s 2019 environmental report shows that 32% of surveyed ports already have LNG bunkering facilities

 available. Most are mobile installations. In addition, one in four ports have ongoing LNG bunkering projects. EU support for LNG investments must continue at least during the period 2021-2027. (legal certainty to planned investments + not to punish first movers).

In achieving the EU Green Deal in ports, Market-based measures and incentives have an important role. Given the international nature of the shipping sector, a global approach is essential if market-based measures are to succeed. The EU should increase the pressure on the IMO to roll out meaningful measures by 2023. ESPO believes that any European proposals such as an Emission Trading Scheme (ETS), a levy or an innovation fund must be thoroughly examined in view of safeguarding the competitiveness of the EU port sector. Environmentally differentiated port fees:

• To be encouraged,
• Must remain a Port decision,
• Useful instrument to reward frontrunners, but financial impact will not change investment decisions.

She continued the discussion with explaining the Permanent tax exemption for all clean shipping fuels.  The review of the Energy Taxation Directive (2003/96/EC) should support the uptake of all sustainable clean fuels, including OPS, by introducing a permanent tax exemption for all of them. Currently: temporary exemption OPS taxation for Germany, Sweden, Denmark and Spain. (Netherlands in the pipeline). And for Long run: fair and just taxation, level playing field between all modes of transport.

According the ESPO secretary general, Short sea shipping and pipelines are important modal shift options. ESPO fully recognises and supports the role of rail and inland waterway transport as sustainable hinterland modes for freight. Motorways of the Sea and Short Sea Shipping can however be just as effective as rail and inland waterways in providing an alternative to road transport. The further greening of the EU short sea shipping segment will make SSS even more attractive as sustainable modal shift option. In addition, pipelines can play a crucial role in the transport of certain commodities (such as chemicals and fuels) and the implementation of certain decarbonisation technologies (such as CCS). Pipelines are accepted by many as a sustainable mode of transport. 

At this point Ms. Isabelle Ryckbost presented the slide on the importance of the port energy clusters and port industry clusters. She continued that Many European ports are important clusters of energy and industry.  These ports are players and partners in achieving the energy transition. Greening “the port” means much more than greening the transport side. All industry players in the port should have their agendas, goals and plans and the port managing body must support the industries in the port in their pathways to a more sustainable future.  Ports are an ideal location to develop circular economy projects. In some cases, the governance or business models of ports will have to be reviewed.

“Ports and waterborne transport are a priority in ensuring resilience to climate change. Seaports and waterborne transport should be seen as a priority in ensuring resilience to climate change.  In that respect, European ports welcome the European Green Deal’s commitment to adopt a new and more ambitious strategy on adaptation to climate change.

Later on Ms. Isabelle Ryckbost put an emphasis on the digitalisation of the supply chain is an additional instrument in achieving the Green Deal ambition. Digitalisation will increase the transparency in the supply chain and can help create awareness of the carbon and environmental footprint of the whole supply chain.  She added that by improving the communication, gathering and exchanging real-time information among different parties, logistics processes can be optimised and transport infrastructure and means (avoiding empty trucks, trains and ships, containers) can be used in a better way. Digitalisation must be seen as an additional instrument to meet the Green Deal objectives.

She added at the end that a strong Multiannual Financial Framework of the European Union (MFF) is needed for achieving the Green Deal objectives. A strong MFF is essential for Europe to invest in a sustainable future. Getting an agreement on a strong MFF must show that both European and national policy makers walk the talk. Extensive support from the Connecting Europe Facility (CEF) is an absolute prerequisite for investments in clean fuel infrastructure in ports, especially if there are mandatory provisions on the installation of certain technologies. Both core and comprehensive TEN-T ports should be eligible. Support will also be important for turning port areas into clean energy hubs and for ensuring connectivity to clean energy grids (TEN-T and TEN-E).

A page also was presented by Ms. Isabelle Ryckbost on Green Deal after COVID-19 with a focus on Green Deal + COVID 19: “Green Recovery”. President von der Leyen at the European Parliament Plenary on the EU Recovery package – 27 May 2020. “We can now lay the cornerstone for a Union which is climate neutral, digital and more resilient than ever before.”Vice PSD Frans Timmermans: “the European Green Deal is not a luxury, but a lifeline to get out of the corona virus crisis”. The EU Recovery plan: is for 750 billion EUR.  Supporting the green transition to a climate-neutral economy via funds from Next Generation EU.  

EU Taxonomy for sustainable finance

ESPO Statement on taxonomy  – 2 July

European ports endorse the idea to help private investors to prioritise green    and sustainable investments by providing them a clear manual with common definitions. 

ask the Commission and relevant policy makers to respect the sustainability requirements and funding priorities put forward in sectoral legislation when using the EU taxonomy framework as a basis for public funding and financing instruments.

the EU taxonomy should not create another layer nor overrule the established funding requirements and eligibility criteria for EU funded projects. 

Where no sectoral requirements are in place, ESPO pleads for technology neutral definitions of sustainable economic activities and investments and asks to include transitional and enabling activities, which provide short- and medium-term solutions on the path towards climate-neutrality. 

Moreover, when setting any technical requirements ports should be considered in a holistic way. Ports are more than a component of maritime transport. They are clusters of transport, energy and industry.

At this stage Mr. Alexio Picco, the project manager, thanked the Ms. Isabelle and mentioned that she has addressed all different aspects of the EU Green Deal relevant to the ports in the presentation.  He also said that he likes the last sentences of the presentation emphasizing that port are clusters of different industries not only transport hubs. He said he ask the participants if anyone has a question on the ESPO presentation. Mr.Hooft complimented the Roadmap of the ESPO , while also he hoped to have a common roadmap for the ports, not each port on itself. In this way let say some ports may go together in making that Roadmap for the future. From the side of Alliance for Logistics Innovation through Collaboration in Europe, ALICE (ALICE) speaking, ALICE already made the Roadmap of zero-emission for

logistics in Europe by 2050, which is in line with ESPO’s Roadmap to implement the European Green Deal objectives in ports. He also commented on the Motorways of the sea, short sea shipping, and they should not be overlooked. Alexio added a point to the last comment of the Mr.Hooft that clearly shipping is a part of the logistic chain, and must be more integrated. If we one really to make the maritime transport integrated, we should simplify the short-sea-shipping projects, and it is at the centre of focus of the Coordinator of the on the MosWays of the Sea.

At this point Ms. Angela Carpenter made a point about the Port-wise Reception Facilities. It is a Directive along with the requirements of the IMO regulation on it. She continued that in this case for the shipping industry 2018 standards, an issue arises it is to get national cooperation. All the national governments agreed to comply with it at national legislation, so it is not only to get everyone on board but also making sure very well that governments are doing it properly and the governments are not preventing the ships to discharge the wastes at their ports. Mr.Alexio Picco acknowledged that it is true and probably it in not the only example, and also mentioned about the digitalisation and Directive 65. He suggested that we have avoid to do it. He named the Ealing project in the field of Cold Ironing with 17 ports engaged with all their feasibility relevant studies in place. But what is important is that Motorway of the Sea is more than a study for each, and sometimes the solutions like cold ironing is expensive and we have to look at other solutions available.

The discussion went on at this stage by the comment of Prof.Micchele Acciaro. First, he thanked the extensive presentation of ESPO, then he continued by asking for the clarification of a part of the presentation on “ the ambition already to reduce the emissions at berth by 50%”,  that it was not very clear whether it was intended as the total emissions of the port or

it was intended in terms of the efficiency that each individual vessel can produce at port which could effectively result in increase of emissions at port?  Secondly he would like to ask a couple of questions specifically on the way to move forward some of the limitations that at the moment the port industry facing. Ms.Isabelle replied to this question , that it is the emission total from both port side and also berthed-ship side. Mr.Acciario continued with the other question: would ESPO consider the development of the approaches that the European level indeed respecting the autonomy of the ports but also set some certain standards at European levels. For example, would there will be any that ESPO will support the policy at EU level where Onshore Power Supply (OPS) is mandatory for all those all vessels that are not meeting the emissions requirement? , or would ESPO consider supporting the European Environmental Tax where every port is allowed to actually get a white tax at European level?  We talk about the incentives, but we are coming at a level in necessities of the things that we need to do to reduce the environmental impacts in ports and outside the ports where unfortunately the carrot is not enough anymore! And although he is very supportive of the carrots, but we have seen for example in short sea shipping with 20 years of incentives still road transport is increasing with respect to short-sea shipping. So would you consider among your members any appetite for rules which are of course negotiated but they are also binding and they go beyond incentives, examples could be European tax on polluting ships, or European requirements on OPS (cold ironing), of course well-argued and well-structured we can see in the future?  Ms.Isabelle ,the secretary general of the ESPO, answered that if we talk about to have on obligation to have OPS on the ships ,  the answer is what we (ESPO) have been saying in  the past is that we cannot oblige the ports first to invest and then nothing for the ships’ side. We see more and more putting all eggs in one basket and that is probably not the way to go. It means if we have to say that everyone should have OPS, and it is not right. But we have to admit is that the OPS is very expensive solution, the installation is very complex, and it is not something that to be installed over a night, so we cannot say it is very promising. For sure installing OPS will take a certain time, even if there are some agreements already made, it takes at least 6 months. We need to keep an eye on other solutions as well, as for example if you have already Hydrogen in place, the whole OPS infrastructure will be redundant. So we should be very careful and cautious on these topics and technologies, as we had in past similar experiences with Scrubber, and LNG. Regarding the environmental tax, we are having the present discussion on the market-based measures, in particular for shipping side,  however, it should be cleared that ports are not tax offices. Not our purpose is to collect the taxes, with the role of tax collector. As we see some of our ports are going deeply into it to see what will be most effective to address in this respect. At this point Mr.Acciaro left a comment that soon the OPS, as it has already been discussed  by the Commission, will be mandatory. The question in this regard is that: who going to pay for it? Prof.Acciaro said that he believes that ship owners should pay for it, and it means on the other word that we need to harmonize our taxation scheme that allows every port to impose the cost of recovering OPS in a homogeneous way.

At this stage, the German partner of the DocksTheFuture project thanked me for the very comprehensive presentation. He mentioned that the digitalisation has been for many years a hot topic, and he is not sure if regarding the digitalization as a support to the climate change & zero-emission on top or in another way approached the digitalisation itself. Mr.Alexio replied there are things that digitalization can do even sometimes more than other environmental tools.