Sustainable smart ports to create prosperity for all in times of disruption and uncertainty

19 September 2022

Written by: Luisa Rodriguez, Article No. 94 [UNCTAD Transport and Trade Facilitation Newsletter N°95 - Third Quarter 2022]

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In January 2022, UNCTAD started the implementation of a 3-year project aimed at supporting 3 African countries in assessing the progress of one port on the path to transition into a Sustainable and Smart Port (SSP). The project also envisages accompanying these 3 ports in the formulation of action plans to promote this shift

This article seeks to deepen understanding on what constitutes an SSP, why the energy axis is key to configure a vision of a port sustainability that enables articulating resilience strategies in times of disruption and uncertainty, needs identified and key actors that should be involved in the design of collaborative mechanisms to respond to those needs.
 

What is a “Sustainable Smart Port” and how does it differ from other types of ports?

There are many studies on SSP which define and emphasize different foundational elements. Combining elements from Chen et al. 2019, and the UNCTAD Sustainable Transport Framework, a port that is both sustainable and smart could be defined as follows:

Port that capitalizes on (or maximises) the use of technology (or of “technology-enhanced intelligence” to improve its performance, simultaneously, in the three pillars of sustainability[i].

From this perspective, technology is a tool enabling improved sustainability performance, and not an end. The table below illustrates an example of how a technological application can contribute to port sustainability (in its 3 characteristic dimensions)

Area of maritime logistics:

Port automation and coordination of port services

Example of technology or solution based on technology and ports that implement them:

  • Automated electric vehicles within the port
  • Port of Los Angeles and Port of Long Beach

Environmental benefits:

Shift to non-motorized transport using alternative energy source enables reducing emissions in the port vicinity

Other sustainability benefits:

  • Economic: Reduced traffic congestion at the port
  • Social: Improved workers safety

Source: UNCTAD-ESCAP-UNEP (2021)

 

Mikael Lind et. al 2021 and Othman et al, 2022 highlight some of the advantages of an SSP over a port that is not an SSP. In a nutshell, an SSP is more competitive and more effective in considering the needs of port stakeholders and local residents. This is because an SSP articulates 3 systems: transport, energy and information, capitalizing on this to:

  1. Generate opportunities for new productive activities and higher value-added services;
  2. Greater security and improved management of resources (thanks to collaborative platforms) and
  3. Real-time monitoring of sustainability performance indicators to improve strategies.
     

Why emphasize the energy transition in ports’ future strategies?

Emphasize the energy transition axis in this project made sense in view of the changing competitive environment for ports and energy security.

In recent years, increasingly stringent environmental regulation has emerged, configuring a changing competitive environment for different operators in the maritime transport value chain, including shipowners, shipping companies and ports.

In this “carbon-constrained” future, port revenue streams related to storage and distribution of fossil fuels are expected to decline. This trend can already by appreciated through the downward trend in the percentage share of volumes of oil seaborne trade and in the tanker merchant fleet (UNCTAD, 2018).

Several initiatives have emerged in recent years to expand demand for alternative shipping fuels and mobilise investment infrastructure and technology. Innovative partnerships have emerged between shipping companies and ports in Europe, Asia and Africa that envisage investment in infrastructure, research and development to deploy green ships (i.e. ships with new technologies and green fuels) on routes where the supply of alternative fuels can be secured.

Energy security has become strategically important in the current context, characterised by high fossil fuel prices, including gas (which is currently the preferred alternative fuel adopted by the existing and on order fleet). This has led many countries to reflect on strategies to promote production of alternative energy sources.

From these two perspectives, building resilience implies preparing port infrastructure and processes to receive and capitalise on the opportunities and port call needs of future “green ships” and creating linkages between domestic processes aimed at expanding alternative energy production and distribution and port activities and operations.
 

Identifying the dimensions of interest to support the role of the port as an enabler of the energy transition

Within this project, port activities linked to production of alternative energy sources (for use by the port), for bunkering for ships and onward distribution (for use beyond the port) have been prioritized, adopting the following definition of an SSP:

Sustainable Smart Ports are ports that leverage on new data environments, the energy transition of the maritime sector, as well as artificial intelligence and green technology-based solutions to enhance port operational efficiency, promote energy efficiency and clean/renewable energy sustainability, as well as tap into the possibility of producing clean/renewable-energy production and distribution.

In this context, the literature review and discussions with potential beneficiaries of the project have enabled identifying the following challenges and needs, linked to the development of this type of ports in developing countries:

  1. Mobilising funding to develop infrastructure
  2. Capacity-building needs to capitalise on emerging opportunities, e.g.in connection with (i) scaling up the use of new technologies; (ii) implementing and monitoring environmental standards and (iii) evaluating results of ongoing strategies and developing new strategies to strengthen the role of ports in the energy transition.
  3. Shifting from a (legal and technical/operational environment) characterised by one predominant energy source to one where several sources coexist and complement each other

In view of this, supporting the shift of ports as SSP, and therefore greater sustainability of port economic activities requires a reinforced governance enabling enhance collaboration of the following key stakeholders in two dimensions:

National

International

Entity responsible for the policy and decision making, management and operation of the port (Port authority)

Private operators with an interest in alternative energy supply for “green routes” (shipping companies, international port terminal operators)

Other Policy makers (transport, energy, municipal development, environmental protection, economic planning and infrastructure development)

Financiers (Multilateral development banks and other donors)

Private actors offering services at the port (terminal operators, rail operators, trucking companies, logistics providers, bunkering services providers)

International, regional and subregional maritime and port organizations with on-going initiatives to develop a sustainability port vision and related strategies

Other private actors (Shipping associations energy/environment technology sectors)

 

Academia

 

[i] Economic, social and environmental sustainability (UNCTAD, 2017, Annex 2)

Luisa Rodriguez | Economic Affairs Officer, UNCTAD Transport Section | luisa.rodriguez@unctad.org


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