Leading the way to sustainable ports through energy transition

Expert panel discusses ports' pivotal role in maritime decarbonisation and sustainable energy transition

An expert panel, including Ines Nastali of S&P Global, Antonis Michail of the International Association of Ports and Harbors (IAPH), Gordon Wilmsmeier of Universitat de los Andes, Mikael Lind of Chalmers and Research Institute of Sweden, and Sam Cho of the Port of Seattle, convened to discuss the role of ports in advancing decarbonisation and sustainable energy in maritime operations.

Ines Nastali initiated the conversation by sharing data on the propulsion systems of future ships, indicating a gradual shift towards cleaner energy sources, with most ships continuing to use very low sulphur fuel and a significant number adopting LNG. A smaller percentage is expected to turn to alternative fuels like methanol, ammonia, and batteries.

Antonis Michail outlined the IAPH's initiatives aimed at decarbonising shipping, including incentivising cleaner vessels, establishing safety frameworks for new fuels, and developing port readiness assessment tools. These efforts are designed to prepare ports for handling various fuels and ensuring safe bunkering operations.

Mikael Lind emphasised the importance of collaboration and digitalisation in the maritime sector, sharing experiences of promoting port collaborative decision-making. He highlighted the need for ports to become intermodal hubs that integrate energy and digital capabilities and discussed the development of a sustainable port concept in Sweden.

Gordon Wilmsmeier presented his work on measuring energy consumption and emissions in ports, advocating for the electrification of terminals by 2035 as a key step towards reducing scope one and two emissions. He stressed the economic and competitive benefits of sustainability and the necessity for ports to understand their energy demand for better negotiations with the energy sector.

Sam Cho shared the Port of Seattle's regional approach to decarbonisation, which includes collaborating with other ports to maintain consistent emission reduction standards. He highlighted the port's role as an aggregator of demand for alternative fuels and discussed international collaborations in green corridors.

The panellists agreed on the need for immediate action and cooperation among stakeholders to accelerate decarbonisation efforts. They called for concrete policy measures, such as the adoption of economic instruments by the IMO, to incentivise the shift towards cleaner fuels.

The discussion acknowledged the maritime sector's slow movement towards decarbonisation, hindered by a chain of dependency on decisions across the industry. The challenges of collecting emissions data were noted, given the nature of ports as landlord-tenant operations and the lack of regulatory authority. Embedding emission standards and reporting requirements into lease agreements was suggested as a potential solution.

In conclusion, the panel highlighted the critical role of ports in facilitating the energy transition and the need for collaboration, innovation, data collection, and concrete policy measures to achieve sustainability goals in maritime operations. The urgency of implementing decarbonisation measures within the next five years was underscored, along with the potential for developed ports to support smaller ports in their sustainability efforts.

Ines Nastali:
Just a quick word of introduction. My name is Ines Nastali. I work for S&P Global as a maritime data analyst. And I'm here with Antonis Michail, who's the technical director of the International Association of Ports and Harbors World Port Sustainability Program.Gordon Wilmsmeier, who works for CUNA Professional, who's the CUNA Professional Chair in Logistics at the Universitat de los Andes and the School of Management in Colombia.Mikael Lind, who's a professor of maritime informatics at Chalmers and Research Institute of Sweden, but who asked me to be introduced as innovator. So we're looking forward to your innovative input. And lastly, we have Sam Cho, the commissioner at the Port of Seattle in the States. So welcome, gentlemen, and thank you for joining me. And to kind of give you an overview of what we're going to be talking about, we want to talk about how ports can add to decarbonization, to make port operations more sustainable, and to contribute to the energy transition, basically. And we're going to hear from the gentlemen how they think that can be achieved. Before that, I thought to just give you a bit of context, obviously, because we're going to talk about ports being energy hubs as well, ports being the facilitator to distribute alternative fuels. So I've kind of gone into our work. In my day job, I work within S&P in the ships and services team, which is responsible for handing out IMO numbers. There's a mandate we have by the IMO, which means that we have an overview of new builds coming into place as well, because you come to us and register your ship, so you get an IMO number. So I've just kind of looked into our database, and I'm just going to get, as I said, through a few numbers. numbers at you, in terms of what propulsion future ships will run on. Most of them, the majority, will still run on very low sulphur fuel, two-thirds, basically. 14% on LNG, but you kind of have to see that most, half of them actually, they are LNG carriers. They obviously then also run on their own fuel, so they kind of take that with a pinch of salt. But there's also a nice mix of tankers, container ships, bulkers, and car carriers that will run on LNG. Then we have quite a big gap, and then we've got 2%, or around 140 vessels that will run on methanol, where container ships leave the table. Then we have 11 on ammonia, and 23 on batteries, but those are, of course, ferries running on a schedule, basically, where they know they can recharge. Then, I think an interesting fact, in maritime we often talk about money, of course. Our S&P Global Commodity Insights team assessed that the bunker price for methanol in February was $18 compared to $15 for 0.5 sulphur marine fuel, which obviously is the prevalent bunker. We can see how that develops in future, that might add to how the demand is shaping up. Then, another caveat, obviously, when we talk about LNG, a lot of those ships obviously will have hybrid capability, so also, again, take that into consideration. These numbers I've given you are in the context of, currently we have 140,000 vessels in service, so when I say we have 11 who run on ammonia, that is obviously quite a small number. But we are getting a clearer picture of what the choices of the future are in terms of fuel, with methanol for containers, and then ammonia and hydrogen probably more for transport and shorter journey. So yeah, that was just my kind of short introduction. So you've gone through the numbers, well done. Now we're going to go get to the presentations, and then we're also going to have a discussion afterwards. So hopefully you'll be rewarded. Antonis, you're going to go first. You're ready to go?

Antonis Michail:
So hello, and a very good afternoon from my side as well. It's really a great pleasure to be here to address you on behalf of the International Association of Ports and Harbors, the global alliance of ports worldwide. We do represent 180 ports globally, and our main role, of course, is representing their interests vis-a-vis all the United Nations agencies and the International Maritime Organization, very relevant to the discussion we're going to be having today, of course. And it's a great pleasure, of course, to talk to you about our efforts and our initiatives as World Ports Community on the decarbonization. I'm going to touch base a bit, first of all, what we do as ports to facilitate the decarbonization of shipping. We've heard some numbers from INES now. It is clear that the future will be a multi-fuel environment in ports, where we'll have to be providing those fuels for shipping, but also overall, ports have a role to play in the whole supply chain of those fuels, from sites of production to sites of consumption of those fuels as well. So without further delay, first of all, when it comes to the role of ports in the decarbonization of maritime transport, this is pretty well defined by the so-called IMO Ports Resolution that was adopted and updated then by MEPC 74, I think it was adopted first time, and then updated by MEPC 79 a couple of years back. And that resolution, it's all about the voluntary cooperation between ports and shipping on assisting the decarbonization of shipping. And it identifies some key areas where ports can have a positive contribution. future, including the provision of onshore power supply from renewable sources, of course, the provision of incentives to best-performing vessels, port call optimization and just-in-time arrival-related initiatives, what's the role of port on enabling port call optimization and just-in-time arrivals, and also, of course, and most important, arguably, to enable the whole decarbonization by 2050 that we're envisaging, what is the role of ports in ensuring the safe and efficient bunkering of those new forthcoming fuels in ports? In the last edition of the Port Resolution, two extra key areas of potential interventions were included, and that is, on the one hand, route-based actions, which was made reference to it at large green corridors, and the second one, how ports can function as clean energy hubs, and I'll come into that. What I'm—it's a pleasure for me to report is that at the level of IAPH and the global port community overall, we have concrete initiatives that address all these areas, and in fact, we go back to IMO and we pioneered the adoption of the Port Resolution together with the governance of Canada back in 2019-2020, and then we go back to present progress reports on all those initiatives and how do we deal with those areas and how ports are advancing in tackling those areas and to facilitate in the decarbonization of shipping. I'm not going to go together today in this short amount of time now through every single one of those initiatives, but still, I think it's worth noticing some of the big developments of there. When it comes, for instance, to the provision of port incentives, our environmental ship index, it's really since 2011, the standard index globally that evaluates the performance of vessels, the attributes as core to vessels, and then 74 ports around the world come back and provide incentives in the form of reduced port fees, for instance, to vessels that demonstrate outstanding performance. 6,500 commercial vessels are enrolled to the system, clearly a success. storing clearly the standard port incentive scheme applied worldwide. Currently, we are building a new ESI to be launched fully in 2026. We are adjusting our baselines, we are becoming more ambitious, and also we are introducing a new comprehensive greenhouse gas emission module and an innovation module that will be able to reward vessels that invest on innovative technologies on board to improve their performance overall. Then when it comes to debunkering of the new fuels in ports, one very important work stream in IPH is the work of our Clean Marine Fuels Working Group that has developed over time and again it's active for 10 years, a safety framework and a safety tool kit for ports to use. We started this work 10 years ago, as I said, with liquefied natural gas, and over the years and especially in the last four or five years, we are now using the previous work as a blueprint to produce this whole safety framework and safety tool kit for methanol, for hydrogen, for ammonia, and also for electrification. As you can see in the slide as well, we're looking at safety in a holistic way, including both the operational safety when we develop bunkering checklists for the new fuels that ports are using around the world, to system safety, how we can audit, for instance, bunker fuel operators that are taking bunkering operations in our ports, and spatial allocation as well. Where would an ammonia bunkering take place in a port? What are the risk perimeters to be taken into account? What type of safety considerations? So a very important piece of work as well. Moving away, not away, moving further, not only to safety, but also taking considerations of infrastructure, of fuel availability, of governance into account, and together with our colleagues in the World Ports Climate Action Program, we are developing, and we have developed, and we're bringing it to the next level, the Port Readiness Level for Marine Fuels Assessment Tool. This is an identification of nine port readiness levels that has been done by the port community itself, and it is already there. The idea is that ports can assess their port readiness level using a common methodology and standard that we developed together. They can assess the current readiness level against each of the fuels. They can assess their future level, if you like, or their level of ambitions for the years to come and visualize that. We are talking of PRL levels here in three areas as well, in three scopes. The one is how ready ports are to do bunkering operators. The second level is how ready ports are to accommodate vessels that are visiting and are propelled by those new fuels. And the third level, what is also the readiness level of ports to accommodate vessels that are carrying those fuels as cargo. Together with our colleagues at WhoopiCup and InMission Innovation with their kind assistance, we are developing the first digital version of the PRL-MF tool that will be launched during our World Ports Conference in Hamburg coming October. Last but definitely not least of the initiatives I wanted to highlight to you is the Clean Energy Ministerial CEMHAB initiative that was done together, and we started it together with our colleagues in the International Chamber of Shipping and with the full support of IEPH, of course. And that goes beyond the use of the new fuels in the maritime transport. It goes beyond. It goes really to the role of ports and ships into transporting those fuels from places of production, largely in the global south, to global places of consumption of those fuels, and how we can work together, governments, industry in an unprecedented getting together and creating those clean energy marine hubs around the globe of ports that will be also playing that crucial role there. On behalf of the Clean Energy Ministerial, there are seven countries that are leading currently the CEMHAB initiative. You can see them on the screen. Brazil, Canada, Greece, Norway, Panama, UAE, and Uruguay. and there are more that are expressing an interest as we speak and will be joining the initiative. So, again, we're looking forward to see that developing, it's a very ambitious one, in the year to come. With that, Ines, I think I'm going to stop it there, as an introductory, and thank you very much, and very much looking forward to our debate afterwards. Thank you.

Ines Nastali:
Perfect, thank you, Antonis. Michael, do you want to go straight in and tell us a bit more about your research and your innovation making?

Mikael Lind:
It's totally dangerous to say something before the session. So, my name is Mikael Lind, and I have a T-shirt at home. It says, I love ports. And I got it from my colleagues when we were trying to introduce port collaborative decision making into the maritime sector. It was inspired from the aviation sector, where we already, back in 2013, thought that we cannot do digitalization without collaboration, and collaboration cannot be pursued without digitalization. I remember the time when I was in Porto Valencia, together with our team from RISE, and we said that, as the Port Authority, how about introducing this standard? That sounds like a great idea, but you need to check with our clients. Okay, so we went to MERSK. We thought that that was a good client. How about introducing this standard for port call messaging? And they said, oh, it's a great idea, but you need to check with our client. So, I'm a Swede, so I thought, who is a good client? So I went to IKEA. I asked IKEA, what do you think about enhancing the predictability of port calls, so that you know what's going on? And they answered, that would be a fantastic idea. Please do that. So I went back to MERSK, and MERSK said, it's a great idea, but Michael, we do not really have the resources at the moment, but please, I would really love to have your contact name to IKEA. That's how we drive innovation in this sector. It takes a little bit of time, and when trying to introduce these type of things in the port environment, I am often challenged in different ways. So I think that we should give a lot of credits to ports in two different ways. I mean, it's right that IMO has a strong say when it comes to ports, at least 40 centimetres into the key. There are so many legislations that ports need to consider in different ways and for us a port is an intermodal hub, meaning that you are catering for actually the transshipment within the same and between different modes of transport. Also ports are in the middle of the whole decommunisation effort where different value chains need to meet each other, such as a marine fuel value chain, the ship building value chain and also the maritime operational value chain, and they are in the middle. So what we did was that we developed a concept in Sweden. We gathered 52 ports in a community-driven approach to settle a concept for sustainable ports as transport nodes with energy node capabilities and digital node capabilities. Just to set the scene a little bit, I got this image developed for me and that is covering the crude oil and LNG vessels at the moment that has been moved from late 2023 and up to March, April 24, and the green dots are LNG vessels and the black dots are the crude oil vessels, and the maritime sector stands for 43 per cent of all the transport made by maritime is related to transporting energy around the world. Interestingly, after the rocket festival in Suez, we do have a situation where the CO2 emission is actually booming again. It's never been so high as it is now, and that's very unfortunate. And also, if you look into the order stock of the vessels, you see that we do not have, or we do not really have the plans yet for how we should handle this situation. So, but interestingly, you saw here that there are certain regions in the world, apparently, that is more LNG-intense than other regions. So what we did in this concept of, as a result of a four-year endeavor, we co-crafted this vision of a sustainable port and a concept of a sustainable port. First of all, as a transport and logistic node, we should never forget that. And I think it's very important also in this debate that ports are there for managing goods and passengers somewhat. Of course, they have a role in the energy systems as well. We want things to happen in the port with as much predictability as possible. And I'm still traveling around and meeting port or harbor masters and the CEOs of ports, and I wonder, can I book a seat in your port? And normally the answer is, we serve you as you come, which is not really satisfying for the clients of the whole ecosystem. And we are running now an initiative where we went out and asked shippers, it's called the Virtual Watchtower Initiative, and said, what do you want from the transport ecosystem? And they just said, we want more transparency, we want somebody that can handle all the disruptions that occur during the transport. And the thing is that the port is the place where the items that are being transported are handled on a single unit basis. You cannot tell a big MSC or merch vessel to go to another port because there are so many shippers on board and so many interests on board these 24, 25, 26,000 TU ships. They are energy and digital information nodes, meaning that they would supply energy and also, of course, cater for... distribution of the energy to other parts of the ecosystem. It needs to acknowledge not just the window to the sea, it needs to acknowledge the window to different means of transport. They are consumers and suppliers of sustainable energy for the sustainable transport system and also an enabler of the transitions, why we are also being on stage here today. When it comes to ports as energy nodes, the Swedish ports developed a maturity model saying that, okay, we need to distinguish between what we are in control over, meaning that we are most often in control over whether we should have that machine or that machine or that machine being operating inside the port, and that was what we coined here as level two, so we need to do that sustainably. Level three was about catering for the needs of the visitors and not just then the ships. I mean, we have the same thing about trucks coming into the port and they may actually need to charge the trucks. And then the trains is of course very sustainable, at least if you run on electricity trains. And then the fourth level is to be part of the ecosystem. And everything in this is driven from the fact that you need to be taking a strategic stance on where you want to go, which we coined on level one, and encouraging ports to actually develop an energy strategy. So concludingly, I say that ports play an essential role for the production, storage and provision of sustainable alternative fuels to visitors. That's a key aspect. Ports would benefit from moving to the forefront of decarbonisation. I think that if you go and ask whichever major port, Hamburg, Singapore, Rotterdam, etc., you would hear that they would supply any type of fuel that the shipping industry wants. But that is a problem, of course, when you are talking about smaller ports. And I mean, now when we are rounding Africa, there must be a great opportunity for many different African ports to also provide that energy. But I doubt that they will have the infrastructure to invest in all means of all fuel carriers. The group of actors that are engaged in port operations is and has always been a conglomerate of actors that are grouped in the port ecosystem. And what is happening now when we are bringing the energy node capabilities into the equation as well, that cluster of actors is expanded, which requires new collaborative models. And also, at the last point, is that we need to have more cross-value chain collaboration. Some people investigate how much does the maritime sector need in terms of sustainable energy and how much is that in relation to other sectors. And we cannot cater for, for example, if a big cruise vessel comes into Malmö port, southern Sweden, there will be a challenge when we connect that to the shore power for the citizens in the city. So by saying that, one, I love ports. Two, I believe very much in collaborative innovation and we need to put research into action. Thanks.

Ines Nastali:
Thank you, Mikael. That was a very good overview, I think, that leaves us a good room to then continue the discussion basically. Before that, Gordon, if you want to come and talk a bit about your work that you're doing in Central and South America.

Gordon Wilmsmeier:
Okay. Good afternoon. Hello. Okay. All right. So, yeah. Pleasure to be here. Thanks a lot for the invitation. I'm going to talk a little bit about what our work is on working with ports and preparing them and bringing the action to the ground in order to reach what our goal is. And we, the big question that we have is, in theory, ah, this one. Why are we here? Why are we here? Because we have a goal, right, 2050, zero emissions. And it's a challenge, and somehow I've been participating in this type of meetings for the last two decades, and we talk about models, plans, and where are the numbers? Can anybody show me numbers, what we have done or what we have not done? Where is the gap? So one of the issues is that we are facing a Minsky moment. We still believe it's going to go back to the times that we had in the 90s and in the 2000s, and it's going to be growth, continuous growth, and steady development. Unfortunately, the bad news is it's probably not going to be that way. And so the question is, how do we really change our behavior in order to deal different with things? And we also have to change our behavior in order to reach this goal that we have, because we cannot continue like we did before. So why do we then want to measure energy consumption and emissions? And I focus here on energy consumption and emissions. For first, it's about competitiveness. Every liter of fuel you spend in your port that is not spent efficiently is a cost for your operation. It is not only about being sustainable. This is about being competitiveness. And also by choosing the type of fuel you use in your port for your port operation, it's about competitiveness, because there's a cost involved to this. This also means if I don't sell the right fuel to operate with the right vehicles or equipment on these fuels, I'm also increasing my risk, because my risk is going to increase in that port, because I'm going to be more exposed to climate change. So I mentioned the economic impact, but also about the image, because my customers might want to have a clean product. And as a port, I'm part of that supply chain or that value chain, and I need to provide a clean product. And that might be zero emissions. Or at least close to it, or very low emissions. And my client in Sweden, even Michael, when he drinks his cup of coffee from Columbia, he might want to know what was the carbon footprint of this product. And I as a port would have to inform that. So in this sense, we have to differentiate. It's about what is happening in the port operations. How can we decarbonize our port operations? That is one part. This is what I'm going to talk about primarily here. And it's about how can we facilitate the decarbonization in the shipping industry? And Michael and Tony mentioned that. And the third part is, how can the port act in the energy transition in importing and exporting fuels, and creating these multi-fuel hubs in a sustainable way? Which is a huge transition of the infrastructure, but also of the transport model. And the industry related to that. Now the question here is, we work with the World Bank on the new port reform toolkit, which is going to be published later this year, and we said, okay, if we develop an effort matrix about the impact of mitigation measures in ports, what are quick wins, what are priority projects, what are high cost projects, what are hidden traps? And we found three dimensions. One is cost and effort that we need to bring this project forward. The other one is about emission reduction impact. And the third one is the time to impact. And what I marked here in green, these are all measures we can implement that have to do with energy consumption and thus with emissions in our ports. So there's a huge set of opportunities that we can actually develop, some in a short time, some in the medium term and long term. But even the long term measures we have to start now if we want to really reach the targets. Now I'm going to give you some more examples, concrete examples of what we do. So first of all, we have some measures available in order to measure energy consumption and emission. We started work with, when I was an ECLEC in Chile in 2014, okay, what was the energy consumption in ports in Latin America? And we, with this, contributed also to the Global Logistics Emissions Counter Framework, which was now published in its third version in 2023. And since March last year, we have an ISO standard, 14,083, which gives us a clear structure how to calculate the emissions and under which principles we can do that. So we do not have to reinvent the wheel. There's an idea how to do it, and we can drive it forward. So there's no secret about it. So I'm going to come back, where are the numbers? If I'm going to ask the Port Authority of Barbados, what is the energy consumption in your port? Maybe I get an answer, maybe not. If I ask the Swedish port, I probably get an answer, but I probably don't get a benchmark with how good they really are. So we have to then extend what we measure within the ports in terms of these other indicators, water, social, waste, energy, emissions, and we started to do that. We developed a methodology and worked together with the Chilean and the Colombian government in order to analyze at the terminal level what are the energy consumptions with this we estimate emissions, considering the ISO 14,083. Now to give you some examples, we can now benchmark terminates in Colombia and in Chile, what type of energy they use, how much they use, what is the energy share, and also we understand what is the dynamics of it. You can see Chile very nicely. Chile has an export season of fruit. It will put stress on my energy system. And why is this important? That's important because the energy sector should know when these things are happening. They should be prepared for that. They need to provide the capacity. It's not only about the port. It's connecting with the other stakeholders, and here the energy stakeholders, that they actually have that electricity, hopefully renewable, available at that moment when they need it in the port. And so I will have my seasons or will not have seasons, but I need to understand what is this demand. Michael mentioned in Sweden, the lights turn off in a small village if you plug in a ship. Well, that's going to happen in Catarina as well, that's going to happen in Panama as well if we do that, if we plug in a ship. So once we understand the energy demand in the port, I can speak with the energy sector and say, look, we are going to have peaks in demand and we need to do peak shaving or we need to provide different capacities on the grid, but we need to first understand what is the demand of this. The other thing is the economic part of it. Here's an example of Colombian ports and what they pay per energy unit in different terminals. Now, this is very interesting because it's about economy and we can find there is a 257% difference what one port pays or the other for the same hour of kilowatt. So this is interesting. So this is about economics. So if I can make better procurement, I can be cleaner. If I can switch from diesel to electricity, I know what the economic impact is. So it's really about understanding the dynamics and getting the numbers on the ground and implementing that. We can also see that over time. We can say, okay, how was my price development? Have prices increased or not for my energy? I can start to negotiate as a sector. And I can also understand that for my container because I might have very good prices, but I'm very inefficient in my work. So I can relate my productivity to energy consumption. And I can differentiate because it's not the same moving a reefer container or dry container in my port. So what happens if the new hypergloid vessels come into my port? They move more than 2,000 reefer boxes on board. And maybe my port needs to handle 500 of them. This will, again, generate this energy peak. And I might want to differentiate for my client what is the energy consumption and emissions for this individual container in my port because that final client might want to know that. So we need the data to have that. All right. So just to finish, here it's about... transparency of information, it's about accountability, what is happening and responsibility. And with this we can really focus on improvement, on the energy consumption, on the emissions and we very much invite you with our team to join us. We have a question online, you can provide your data and we'll work with you. Thank you very much.

Ines Nastali:
Thank you, Gordon. So, obviously we got a bit of an overview from kind of the research kind of side, but now we actually have Sam who actually works in the port and can tell us a bit more about what the Port of Seattle is actually doing concretely to reduce emissions.

Sam Cho:
Excellent. Thank you so much. Good afternoon, everyone. It's good to see you all. I'm going to roam a little bit because I'm a walker. I want to thank my colleagues for their very comprehensive presentations and I certainly hope that this one will be a nice bow on top by providing some perspectives on a port that's doing this work on the ground. I want to level set our conversation and presentation by first making sure you all understand the nature of the Port of Seattle. And the reason I want to do this is because one of the things that I talk a lot about the Port of Seattle is that we are arguably the most diversified port in North America. And what I mean by that is when you look at our facilities here, you see much of the maritime facilities here that contain our four main lines of businesses, the cargo business, the cruise business, the commercial fishing business, and the recreational marina business. But what I wanted to highlight in this is this teal area here down here in the south end. And this is actually the airport. And I realize that this is a maritime-focused supply chain conference. But you'll understand why later in this presentation I'm highlighting the fact that we also run the airport. When it comes to the maritime sector, you can see here that maritime cargo actually accounts for more than 50% of our greenhouse emissions. If you add the cruise industry, we are far beyond 50% of our greenhouse gas emissions. The way that we have tackled this as a port is a regional approach. And so we have something called the Northwest Clean Air Strategy. What is this? The Northwest Clean Air Strategy is actually a cohort of ports in the northwest region of the United States and Canada that have all agreed on the same standards of greenhouse gas emission reductions. That includes the Port of Seattle, the Port of Tacoma, the Northwest Seaport Lines, and the Port of Vancouver, B.C. Now, why is this important? We all know in this room that decarbonization costs money. At the end of the day, it's a very, very expensive endeavor. And that money ultimately gets passed on to end consumers, whether it's the beneficial cargo owners or the importers. And if we were to be truly honest with ourselves, ports compete with one another for business. And because our pursuit of decarbonization makes it more expensive to do business at the Port of Seattle, we took a regional approach. If the Port of Tacoma, Seattle, and Vancouver, all the major ports in the northwest region of North America, agree to the same standards, decarbonized by 2050 and half emissions by 2030, then it doesn't matter what port you go to. At the end of the day, every port is pursuing the same decarbonization standards. Now, every port will pursue them in their own ways, but we all know that we're headed towards the same direction. This creates a level playing field between the three major ports of the Pacific Northwest. And for that reason, we don't enter into this race to the bottom amongst the ports. I know Mikhail earlier talked about ports as a hub, and I couldn't agree more. But the perspective that I have as a port commissioner and as a port is we're actually an aggregator of demand for these alternative fuels, right? And you think about it from the fact that if you go back to the slide, you have marine cargo, heavy-duty vehicles as a huge chunk of greenhouse gas emissions, in addition to cruise ships, rail, and other light vehicles. Well, at the end of the day, when you go back to the argument about cost. How do you get fuel cost down? You need scale. How do you get scale? You aggregate demand. And that is why I highlighted then our airport, because the work that we're doing on sustainable aviation fuels, in conjunction with cargo vessels, heavy-duty vehicles, cruise vessels, and all the cargo handling equipment and rail within the supply chain, is crucial to aggregating demand in the decarbonization of ports. And so yes, we are a hub, we are a node, but ports are ultimately also, and can be, aggregators of demand for these alternative fuels. And that is where I think ports play a special role when it comes to these efforts in decarbonization. Lastly, it's really important to note that there are a lot of international collaborations that we need to be looking at and focusing. At the end of the day, I think the point we need to make is that no ports work in isolation of each other. We are a supply chain, a chain, which is why the Port of Seattle and Northwest Seaport Alliance is involved in two main corridors. One is the Pacific Northwest Green Corridor with Busan, which was announced at COP 27 two years ago in Sharm El Sheikh, Egypt. And then the second one, which is our Green Corridor between the Pacific Northwest and Alaska, one of the biggest and the most frequented cruise corridors in North America. And the reason we do this is because we understand that the vessels that go between these ports are not isolated, right? We are more like bus stops than airplanes. And so for that reason, we're looking at, through the collaboration and the help of the Maersk McKinney Molar Center, on how we can work between these different ports and different trade lanes to decarbonize the shipping lanes and the cruise lanes between these ports. So that's it for me. Thank you for your attention, and I look forward to the discussion.

Ines Nastali:
Lovely. Thank you, Sam. I think obviously, you know, as Sam said, we work in a chain. There are a lot of people and different kind of sectors involved when we talk about maritime. So I think I want to talk a bit more about that. So how do you work with the different stakeholders that are involved? And I think, Antonis, I might want to start with you, because just looking at the port readiness tool that you developed, and I think that might be something that we can kind of expand on. So how do you get the support from the different people? And having worked with the IAPH, or have followed the work of the IAPH, IAPH's work over the past few years in a previous job, I know that kind of focuses also on getting to your customers' customers, and that I think might be something that we can talk about a bit more.

Antonis Michail:
No, absolutely. I mean, you know, collaboration, right? A very beautiful word, something that we all agree that it's needed at all levels, and it's vital in the debate. The thing is how we really put it in practice, right? Because I think there are also type of mentalities and ways of doing business for so many years, and now it's time, I think, we all mentioned it, it's time for a real change here. So we need to re-evaluate a bit how we do things overall, I would say. Now at the level of IAPH, of course, I think that lately, in the last years, the association itself, you know, apart from the port authorities, we do have our associate members, which are companies providing services to ports at large. But that community is expanding quite a lot with big shippers and big companies like Cargill, like IKEA lately, and in fact, by also working very closely with ship owners, and especially on decarbonisation, this is very, very important. At the end, yeah, it is going to come from BCOs, the demand towards cleaner transport as well, and that demand will come to the port as such and everything, and that's how it will work up to a big extent. So to that level, yes. Then you mentioned, of course, yeah, you know, and the port readiness level and the work that we do there. But also, obviously, also what I mentioned, the Clean Energy Marine Hubs initiative. That's where it is indispensable also to bring the silos between, even at the government level, between transport and energy ministries, right? I mean, we're talking about decarbonizing, we're talking about the role as hubs overall. It's not only that transport and energy people and governments and ministries need to talk each other. They need to be in the same room and they need to break out those silos. And of course, within the ports, ports, ship owners, energy manufacturers and so on, all of them need to be together if we want to really make a change there. And I think the challenge, as I said, change a bit of mentality and realize that it cannot be done otherwise.

Ines Nastali:
Yeah. I think that is, I would hope that is, you know, clear to everyone by it's a difference between kind of thinking about it and then putting it into practice. But definitely. And I think, Sam, that's probably something you kind of look at as well. Like keyword, like scope three emissions as well. That's something that you deal with as well, right? Where you say, you know, what is a port basically? How far in terms of emissions, how far are we responsible for that and what kind of feedback can we give?

Sam Cho:
Yeah. So obviously for any organization or business, scope three is the biggest challenge. But I think because the port is a hub with many spokes within the value chain and the supply chain, it's natural for us to convene all the different parties within the supply chain. And at the end of the day, one party's scope three emissions could be our scope one emissions, right? It's all a matter of perspective. And that's what really gets people to the table. And if you have corporate partners who are serious about reducing their scope three emissions, they're willing to go to the table. And so that's what we capitalize on as a port, is convening the Amazons of this world, the Costcos of this world, who are truly serious about reducing their scope three. And they come to us to see how they could do that. And so we have a very distinct advantage in the Northwest, given the presence of those different spokes.

Ines Nastali:
It seems like you want to add something to this. Reaching for the microphone? Please go. Tell us.

Gordon Wilmsmeier:
But I think you ask about the stakeholder collaboration, I think the key is to generate trust between the actors. Because we talk about having information about others, if it's a port or along the supply chain, and you need to establish the trust that that information is treated accordingly and that the result, and this is where we've been working directly with the government and the ports as well, say, look, we can maybe bring this objective vision or perspective to the table, help you to benchmark, it's not important who it is, it's not about finger pointing, it's about finding a starting point and setting serious targets. And I think to first have this health check about where am I into, I know, like, Seattle is very advanced, Hamburg is very advanced, but we have so many ports in Latin America and Africa and Asia that are just starting to understand. So it's about creating the numbers, creating the data about it, and also creating then the capacity within the port authorities, the terminals, in order that they realize that this information is relevant. We should not forget the major work of a port is moving cargo, and these are all things that are coming on top of them, and they have a cost involved. So we need to also help them to see there's a positive economic impact in being more sustainable and a competitive advantage.

Ines Nastali:
Yeah, absolutely, and I want to come back to that and talk a bit more about the data side as well. I think, Mikael, you wanted to add something as well.

Mikael Lind:
I think that everybody in this room and in the world agree upon that collaboration is a key ingredient in moving this forward. What I also think is that we are pretty weak in talking about the how. How do we do good collaboration? I think it's a very strong need for knowledge here. The way that I think is super important is that we need to reflect that the physical ecosystem of ports and shipping companies and clients, et cetera, is highly distributed. It's not like we have a boss that is sitting on top of this whole system, it's that everybody acts on behalf of themselves. So what we need to do, I think, is that we need to find the selection of stakeholders that needs to be engaged and that they define a common object of interest, and that common object of interest would then serve as a foundation for adding KPIs, et cetera, to what we want to achieve together. That would then also be a foundation for acknowledging the different stakeholders' own perspectives. How can I gain most value out of this? Because that is what is going to happen at the end of the day. Everybody is caring for their own sake. But we can contribute together, and my challenge here is when I talk with ports, it is sometimes I almost feel that the ports is the lowest party in the value chain, which I think Antonis maybe you also feel sometimes that, okay, there's a shipper on top and they contract a freight forwarder or go directly to the shipping company, and the shipping company pays a visit, and the ports are super nervous if the ship or if the captain actually takes the wheel and turns it and goes to another port. So having said that, I think that digitalization and collaboration actually offers new opportunities for ports to be directly involved in relation to the shipper. One example would be the connected container. or the smart container. There's a lot of information about the goods that they are transporting that can go directly to the shipper. Now they report to the shipping company and hopefully the shipping company goes back to the shipper, but you never know. So by saying that, I think that a high degree of transparency is enormously important and that we collaborate on fairgrounds. Thanks.

Ines Nastali:
Yeah, agreed. I think that kind of brings me back to that point about gathering like data, gathering baseline data. And I want to go back to Gordon about that because listening to your presentation made me wonder maybe you have some input on that. What's been the feedback from ports in terms of, you know, the effort and also their capacity to collect data, you know, on emissions? Because as Mikaell said, this is in addition to what, you know, what your daily work is.

Gordon Wilmsmeier:
I mean, the thing is where we start is asking the port if they know about it. And most of the ports actually don't know how much money they spent on energy per container. And once you ask them, and you ask them, why don't you get your energy bills and let's sit down at the table and look how much did you pay for energy last year? So it's like, oh, so much. It's like, yeah, so how is that related in terms of productivity? What strategy do you have? And then what's happened? Oh, yes, being more sustainable is expensive. And they say, well, let's have a look at this. If you electrify, this machinery is much more efficient. And if you take the total cost of ownership, maybe in a few years you'll recover that investment actually. And this is where you start to have a conversation because it's in the second tier. It's about the emissions and being more sustainable. So here's what's worrying the port. I need to be more pushy. And when we talk about the port, he's a terminal operator, not the necessary authority. And a lot of the global terminal operators obviously have that clear, but they also need to work together with the government. So it's also pushing the government and I. asking for this type of information. And then the next question is, oh, but if I electrify my machinery, what is the energy sector going to tell me? And this is what Michael was talking about, and that is very common. Oh, we are worried that the lights will turn out in the city next door. And this is where we come back to the collaboration aspect. We say, look, if we can model your energy demand in the future, you want to electrify over the next five years, we tell you how you should develop the electricity grid going to that port, and the whole value chain will benefit. And so it's really about not only getting the data out of them, it's okay, trying to interpret the data and asking the whys. Because you find a port and then say, oh, we have that much energy coming out. But for your refit cargoes, you use diesel generators. I'm not surprised. Oh, could we change this? And so it's about having that conversation. And again, I'm not talking about the Hamburgs, the Rotterdams, the Singaporeans in this world. It's really about getting the small ports on board, because for them it's even more important to do that change. And I'm convinced that they can leapfrog some of the development, the bigger ports have done.

Ines Nastali:
Yeah. Absolutely. I think that global participation is very, very important. I want to go back to that as well, but Sam, do you want to interject as well?

Sam Cho:
Yeah, real quickly. I think when you think about it from the perspective of ports, there's really two main challenges when it comes to data and collecting data. One is that most ports, if not all ports, are not regulatory agencies. We do not have the ability to enforce a 2030 goal. It's aspirational, and we do everything we can from within our first scope one emissions to get there, but we cannot enforce certain emission standards. And then the second one is, and Michael touched upon it, is most ports are not vertically integrated. We are a landlord-tenant port, which means that we do not directly operate the terminals. We have terminal operators, we have carriers. Asking us to report your emissions data to us is like your apartment owner asking you to report how many times you flush your toilet every day. It's a weird thing to ask, right? One mechanism that we have used, however, because we are a landlord-tenant point, we're looking at how we can use our lease agreements to embed the emission standards and reporting. How many times are you plugging into shore power, right? How many, you know, what kind of fuels are you using, scrubbers, you know, there are things you can bake into a lease agreement at the port level where you say, if you want to operate in our harbor, part of the agreement is that you report things to us. And I think that is gonna be one of the models that becomes much more prevalent going forward as a mechanism for us to gather the data that I think that we're all trying to get out.

Gordon Wilmsmeier:
I mean, maybe as a direction to that, and we have a very interesting example in Chile because we always focus on the port. In Chile, they actually have an energy efficiency law that comes from the energy ministry, and it's for all sectors and all industry. So, and everybody has to report now about a program of energy efficiency. It doesn't matter if I'm a port or another company or another industry. And I think that's really interesting because suddenly you get the pressure from somebody else, and what you say, what we could not do in the past, is actually being implemented from somebody else. Because the energy ministry doesn't care if it's a lease agreement or not. You are operating an industry in my country, so I want to see a report. And I think this is also important for the collaboration with the energy sector.

Mikael Lind:
I tend to agree now very much. We are working with 52 small ports in Sweden, and nothing bad about that. I mean, they have been originally developed as being serving as a point of transshipment for municipalities. And now the focus is on ports very much more as a business community type of thing. And that also means that suddenly the shippers. are starting to pay a lot of attention to the emissions in the corridors, but a very important ingredient in the corridor, as we are now handling all the single units, is what is happening in the port. And if I go to any port in the world and ask, what is the emissions that are related to my units, it's very hard to get an answer. So here I think it's a very good and important work that the ports need to do, and maybe this is for internationalization of ports and harbors, really.

Antonis Michail:
And absolutely, let's take that, but I mean, at the same time, I want to kind of, not only echo, I mean, when you need to work with stakeholders, that's where collaboration is key. I mean, if you want to do a comprehensive, indeed, carbon footprint, and of course you need to include Scope 1, 2, and 3 for that, then you need to involve everybody. Everybody needs to be on board from the same time, but that requires collaboration, indeed, because we cannot enforce this data provision and everything. And then you nailed it, of course, Sam, with lease agreements, clauses as part of concession and lease agreements. That's a powerful tool that ports have in their disposition to enforce, because that's a bit of an enforcing element, if you do it, but we can do a lot for enabling and for encouraging stuff as well. I mentioned before the environmental CP index, the whole thing about incentives as well, how you can influence behavior as well, or better behavior, and that's another way of saying things as well. So yeah, plenty to do, plenty to think about it, and again, it comes back to collaboration, but also hearing you, Gordon, Michael, it is, of course, that we need to acknowledge what is a port authority, which is at large the landlord port authority, which through collaboration and some other type of smart interventions, also enforcing, but mostly enabling and encouraging needs to work with other partners to enable change in a way.

Mikael Lind:
Just to add another comment here, what I think and what I realize, and I think that maybe Gordon and myself play that role sometimes, and that is to be the, and maybe you also do as an interlocutor. international organization is that these type of collaborative efforts requires an orchestrator. And for us, our experience is that if a port of Seattle walks in and says, let's do something together, then you better come to a table where everybody is equal, and that is sometimes very challenging when you come to the maritime industry. But my experience now, if I come with the body of a research institute, as an example, could be an academic institution as well, that we have a role to play this objective if we just know what we are talking about.

Ines Nastali:
I think in future, we will obviously, as you say, see much more cooperation, I think, be better connected, and that hopefully will contribute also to connect lesser developed parts and other developed parts. But I think that also means, you know, does the more developed port have a responsibility to kind of support the smaller port? But then we're kind of talking about like kind of social responsibility, and at the same time, you could think this might be a good way to like expand, but is that something that we will see?

Sam Cho:
I think, you know, when I was at MEPC last year at the IMO, we were pitched about on this program the IMO is initiating where the larger developed ports would mentor the SIDS or developing ports, and I think there's value in that, because we are, we have what you might call the first mover advantage, right? We're doing it first, onshore power, we'll be the first port on the west coast to have three onshore power capable terminals. But there were a lot of lessons learned there, and it could have been a lot cheaper had we known those lessons beforehand. And so those lessons learned can be transferred to the developing ports so that they can avoid some of those pit traps. If we knew a lot of the know-how that we have now, we could have saved over 40 plus million dollars in cost. Right, and so I think from that perspective there is tremendous value in the Ambergs and the Rotterdams and the Seattles of this world, mentoring and helping the SIDS and the smaller ports avoid some of the pit traps of decarbonization, for sure.

Mikael Lind:
I think this is super interesting, Sam. I come from a situation where the largest port in the Nordic region is Port of Gothenburg, and that is not a big port in an international sense. The rest of the 51 ports, they are super small. So in Port of Gothenburg you would have an IT department with several people. In Port of Karlshamn or Port of whatever, of these other ones, you would have maybe 20% of a position would cater for the IT questions. That means that they are so concerned about collaborating with other ports and actually to join forces and to overcome this effort that it means on the digitalization of ports and on the decarbonization of ports, et cetera, et cetera. And here I think the big ports need to help, of course, but we need to be extremely careful also. I used to say that, okay, Singapore is doing this and this and this, and then I bring it to the small port that is a super small fraction of what Singapore is doing, and that translation is really complicated. I must say that.

Antonis Michail:
No, absolutely. But that's where I see a clear role for IPAs as well, and that's what we do, actually. We have those working streams where indeed, I mean, front-runner ports will get there because they have the capacity to offer, they face these problems in an urgent way, and they develop tools and methodologies. But then it is our role as an association to commit to capacity building and to bring or to try to bring or adapt those tools so that everybody can use them and bring everybody at the same level. And we do that, of course, intra-then-port competition and sharing of knowledge and experiences and practices. But also we are active in committing with our colleagues at the International Maritime Organization as well, the Green Voyage 2050 program, to draw capacity building programs with other partners as well, and make sure we can help the global port community to Not only to catch up and just one last thing of course on decarbonization is like that But we are managing a sustainability project database and over there all parts of the world are submitting sustainability initiatives And it's true that when it comes to decarbonization The the big ports the more developed ports are fantastic when it comes to social initiatives And that's also an aspect of sustainability We can learn a lot from ports in developing countries and the actual initiatives that are undertaken and that's clear from our Sustainability database as well, but I'll stop it here because it's not decarbonization.

Ines Nastali:
Yes. Yeah, No, that's very true. And obviously you're welcome to like continue the discussion like afterwards But I think as a kind of final point we want to look at some concrete Measures that we can that we can take because obviously we've I think we all agree ports can definitely play You know a big big role in facilitating decarbonization But as you know, if you look at the numbers I've given you at the beginning I think you can see there's like slow movement because I think there's this again this chain of like kind of waiting We're like an engine manufacturer waits for the ship Or not to make a decision what fuel they would want so that they can then you know They then develop the the engines for that And then the ports are waiting for the for the ship owners to say this is the fuel that we want Provided to us while I think the ship owner waits for the port to say this is the fuel we will provide so what Which obviously then that phrase creates kind of delays and I kind of just waiting what's going on So what I think if each of you can just Briefly kind of give me like a concrete measure you'd like to see Like done in the next five years that could get us out of that That's kind of waiting situation and get like concrete measures on or if there's something that you Have that want to commit to as well, then obviously you put it on record here

Antonis Michail:
Can I start? well for me, I have to look again at the direction of IMO and MEPC on that because I think that the most important measure to be taken and it has to be taken not in the Next five years probably in the next one or two years It's the adoption of an economic instrument by by IMO that will give really a third sense to all those new fuels, and I think that this was accelerate developments and maybe We'll filter out a bit that debate on which fuels we're going to, or what exactly the mix will contain. But we need an economic measure, and we need it for two ways. We need it to give a fair chance to the new fuels, and we need it also to support a just and equitable transition by the redistribution of these revenues, and by developing that infrastructure that is needed using part of these revenues as well, imports in developing countries in particular.

Mikael Lind:
So I think that I have two messages. One is that we need to take a holistic approach. I talked about digitalization and collaboration, but do not forget that we cannot separate the societal concerns from the economic concerns or incentives. That's one thing. The other one I would also say is that we cannot just rely on policy. I think policy is fantastic. I think that provides a good security for investments, etc., but we also need to listen to the industry and how they are moving forward. Thanks.

Gordon Wilmsmeier:
Okay. Very good. I think, first of all, the important thing is that we have a framework with an ISO standard available to measure it, and that's key for the whole transport chain, not only terminals. And the other message is you really have to focus on what your role is. It's a port of search as a terminal operator. And if everybody really starts to reduce their scope one and two emissions, the scope three emissions of the other one will also be better. So I think sometimes we are lost in talking about scope three emissions that's so difficult because that needs to be done by collaboration, but we forget acting on the scope one and two emissions. So I would really like to see by 2035 all the terminals electrified, then we would have a major step in scope one and two emissions, right?

Ines Nastali:
Okay. Yeah. Sam, will we see that?

Sam Cho:
I would love to see that. I think for me, I would love to see a study that really breaks down the energy demands based on the sectors. You have to remember, maritime only accounts for maybe 3% of global greenhouse gas emissions. let's be honest with ourselves, maritime is not gonna be at the forefront of driving what sustainable fuel we use in the future. But if you add the heavy-duty trucks and everything else within the port ecosystem, you can actually converge on something where we know which fuels are gonna be the most used, whether it's ammonia, hydrogen, methanol, et cetera. And so what we need to do is really break down the study that goes beyond just the cargo carriers, but also looks at every layer of a port and you may end up in a situation where you say, well, actually, this is gonna create too much demand for one fuel and we need to diversify a little bit. I don't know how that study would follow, or what it would conclude, but I do think we need that broken down study of how much demand we have for each sector of the value chain.

Ines Nastali:
Yeah, absolutely, more baseline data. Thank you very much, gentlemen, for spending the past hour with us. Thank you to you as well. And I think we're going straight into the next panel from here on.