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The development of port infrastructure to meet the needs of expanding, sustainability-focused global trade will be a critical facilitator in optimising both the movement of goods and the efficacy of their wider supply chains.
As supply chains recalibrate with the energy transition, ports will need to not only have the capacity to handle increasing trade volumes and the growing sizes of cargo ships, but also the tools and ability to effectively drive maritime decarbonisation through the production and supply of alternative fuels.
Future-proofing ports for new energy systems will require broadening the definition of port infrastructure’s ‘value’ beyond conventional financial and economic benefits.
This will enable planners to identify and capture the wider benefits relating to natural and societal factors, which are typically difficult to identify and monetise yet critical to making informed decisions.
In its Making the Total Value Case for Investment report, engineering consultancy Arup explained that the existing “infrastructure-as-usual” methodologies did not consider broader impacts and were often blind to significant opportunities to create social and environmental benefits, creating a value gap where investments did not represent best total value.
Not only were opportunities for value creation being lost under the status quo, but sub-optimal investment in infrastructure development was leading to ‘poor’ decision making that did not adequately address global challenges.
However, by embracing an innovative ‘total value’ approach to infrastructure investment, according to Arup, the wider benefits from infrastructure could be robustly measured, captured, and monetised, increasing their visibility and enabling their communication in a powerful way.
A collaborative study Arup conducted with maritime classification organisation Lloyd’s Register, and net zero-focused non-profit The Resilience Shift, detailed the critical role ports will play in driving and supporting future investment in energy infrastructure.
This was articulated through the risks and opportunities of developing infrastructure for alternative fuels, as well as how ports can unlock investment for low carbon fuel production and supply.
As a case study, the researchers modelled an Atlantic Ocean-based green shipping triangle and evaluated land-side infrastructure for fuels derived from both blue and green hydrogen, using a whole-of-system method that accounted for associated technologies such as carbon capture in blue hydrogen production and hydrolysis for green hydrogen.
The study demonstrated the need to carefully integrate new technologies with port and energy systems using a sustainability and resilience-focused framework, as well as how demand for alternative fuels was intrinsically linked with the concept of green shipping corridors.
Filippo Gaddo, Head of Economics at Arup, said the scale of infrastructure for low carbon fuel supply was large and there was a need for significant investment in initial path-finders projects.
He said: “Our study shows that an integrated approach that addresses the total value of the projects can unlock significant co-benefits, strengthening their case for investment.
“Delivering such projects, while demonstrating their whole system benefits, will reduce risk of future uncertainty in the sector – helping to futureproof it both in terms of investment and sustainability.”
Research undertaken by energy consultancy UMAS and the Global Maritime Forum’s Energy Transitions Commission revealed that the biggest share of investment needed to decarbonise shipping was land-based infrastructure and production facilities for low carbon fuels, comprising 87 per cent of the total.
The analysis included investments in the production of low carbon fuels, as well as the land-based storage and bunkering infrastructure needed for their supply.
Ship-related investments made up the remaining 13 per cent and mainly consisted of the machinery and onboard storage to run the vessel on low carbon fuels.
It also included investments in improving energy efficiency, costs which are estimated to grow due to the higher cost of low carbon fuels compared to traditional maritime fuels.
UMAS calculated that, depending on the production method, the cumulative investment needed between 2030 and 2050 to halve shipping’s emissions were more than US$1 trillion, or an average of US$50 billion to US$70 billion annually for 20 years.
To fully decarbonise shipping by 2050, further investments of about US$400 billion over the 20-year-period would be required, increasing the total to between US$1.4 to US$1.9 trillion.
Port access linked to costs and supply security
Another essential factor in port infrastructure development is the relationship between greater capacity and port access, with reduced costs and increased security across supply chains.
Research published in Sustainability investigated this relationship, looking at a real-world fairway deepening as a case study and detailing its importance to cargo shippers’ decision-making.
Noting the consistent increase in average ship size across global shipping, the authors explained that adapting port and port access infrastructure to the changes observed was a prerequisite for maintaining competitiveness for supply chains, both in part and wholly across entire networks.
Global maritime transport volume rose from 3.7 billion tonnes in 1980 to 10.6 billion tonnes in 2020, creating the tendency for cargo fleets to periodically increase the capacity of newbuilds compared with older vessels.
The current mean capacity for the newest vessels (between zero and four years of operation) of the global cargo fleet is more than 43,000 deadweight tonnes.
The authors underscored how adequate hydrological conditions that ensured safe access to ports for increasingly larger ships were necessary for the stable functioning and development of the port, as well as the wider region.
They added: “For shippers, the certainty that the handling of larger vessels is assured regardless of any fluctuating hydrometeorological conditions and temporary vessel entry permits is a guarantee of security of supply.”
To demonstrate the tangible impacts of higher-volume port infrastructure, the researchers studied the deepening of the fairway to 12.5 metres at the deep-water Port of Szczecin in Poland, and modelled the transport costs of five transport chains served by the port.
The results showed that a 2.5-metre increase in the permissible draught of ships led to a decrease of up to 25 per cent in transport costs, mainly from the reduction in specific fuel consumption throughout the chain, as well as positive changes to the structure of the port’s foreland, or the part which projects into the sea.
Moreover, the researchers highlighted that the implementation of port infrastructure investments had not yet been sufficiently examined in terms of attractiveness for shippers, who are presumed to consider typical business aspects but may also consider psychological issues in tandem.
As part of their case study, the researchers completed interviews with cargo shippers to validate their quantitative studies, finding that most respondents reported increased transshipment volumes after Szczecin’s fairway was deepened, as well as increases in the share of cargoes originating from or destined to the extra-European foreland.
Importantly, the interviewed shippers said the fairway deepening had contributed to improving the security of the cargoes’ supply chains, as well as navigational safety, and shed light on other factors in addition to fairway deepening that also contributed to port competitiveness.
These included upgrading quays to new fairway depths; investments in port handling equipment and storage facilities; and publicising the port’s new capability of handling higher capacity vessels, by running promotional campaigns during shippers’ trade events.