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Port Authority of Valencia to improve measures to implement Emissions Trading System

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Port Authority of Valencia to improve measures to implement Emissions Trading System. Image: Port Authority of Valencia
Port Authority of Valencia to improve measures to implement Emissions Trading System
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The president of the Port Authority of Valencia, Aurelio Martínez, has called for a review and improvement of the measures to implement the Emissions Trading System for maritime transport included in the European Union’s ‘Fit for 55’ legislative package so that they are truly effective in the fight against climate change. For the Port Authority of Valencia, the proposal, as it is currently designed, will have a “null” impact on the overall reduction of emissions in the maritime sector, and may even worsen the situation. Moreover, it will lead to a reduction in activity and a loss of connectivity of European ports which will result in a reduction in the competitiveness of the exports of companies.

The ‘Fit for 55’ package envisages, among other actions, that maritime transport should be included in the European Emissions Trading Scheme. Specifically, it implies for the sector that shipping companies will pay 100% emission rights for journeys between EU ports and 50% for journeys to and from the EU. These targets will have an effect on the EU geographical framework, but will still have a negative impact worldwide as they do not affect third countries. “In general, we share the objectives of this programme, but as far as emissions are concerned, as it stands, the impact on the reduction of greenhouse gases is zero. It does not solve the problem, it simply shifts it. The objective of decarbonisation will not be achieved as there will be carbon leakage from ships that will go to environmental havens in non-EU ports,” explains the chairman of the PAV.

In his report, which can be downloaded at this link, Aurelio Martínez explains it with the following example: “If on the crossing between Shanghai and Valencia the boat calls at any of the non-member ports in the Mediterranean, the shipowner does not have to pay a penny for what has been spent and emitted during this part of the crossing, which is by far the longest. What are shipping companies going to do to avoid these costs? Easy: make a call at, for example Tangier and then continue on to Valencia”.

Moreover, this measure may even increase CO2 emissions for two reasons: “Firstly, because the additional stop on the crossing may increase the number of nautical miles sailed. Secondly because in order to benefit from these savings, the shipowner may concentrate cargo in these ports and use feeders  to carry cargo from the south of Spain or even Valencia to Tangier for example. Given that size is key when it comes to evaluating environmental efficiency, such shifting of destinations and cargo could easily result in an increase of global CO2 emissions,” the president of the PAV points out.

Impact on the European economy and loss of connectivity

For the president of Valenciaport, the current text with which the EU is working will generate a displacement of transhipment from Spanish and EU ports to these environmental paradises, which will lead to an impact on income and on the direct and indirect employment generated by this activity. It will also mean a loss of connectivity of European ports. There will be fewer direct lines, which will increase costs for exporters and reduce trade flows with the countries with which this connection is lost.

“If connectivity is vital, the impact of such a scenario could be a significant fall in the competitiveness of our exports,” points out Aurelio Martínez. ” The result of all of these impacts will be the loss of production and jobs in the affected sectors, especially the lowest value-added jobs, where the increase in costs and loss of competitiveness have a greater impact. We must consider the played by ports in the channelling of Spain’s foreign trade sector (60% of exports and 85% of imports)”, he adds.

Possible alternatives

In this context, Valenciaport is working, together with the Port Authorities, Puertos del Estado and the European Sea Ports Organisation, on alternative proposals to reform and improve the European Commission’s text, such as extending the deadline for the introduction of the tax or the inclusion of neighbouring non-EU transhipment ports.

Aurelio Martínez explained some of these more efficient options that do not generate significant collateral effects. “For example, let’s assume that emissions from the maritime transport sector are on average 30 grams per tonne transported per mile. For this, we set an objective, we want to reduce these emissions by half and we establish a deadline of 2030. We determine a path of linear reduction (2022 30 grams; 2023 29 grams; 2024 27 grams; 2025 25 grams; and so on until 2030 15 grams). Thereafter, all ships which, as a consequence of employing modern technologies or fleet upgrades find themselves below these targets will not be penalised. CO2 allowances should be bought in the proportion deemed appropriate for the type of vessel only by those above this trend line, and the obligation to acquire emission rights will apply irrespective of stops in third ports outside the Community,” said the PAV chairman. Furthermore, if the fleet is less than 20 years and that all those launched in recent years are extremely efficient with average emissions well below required levels, over 8 years, we are encouraging new additions to meet out requirements so that by the 2030 the objective can be met.

Fit for 55

The European Commission has published its ‘Fit for 55’ legislative package, which supports its commitment to reduce net greenhouse gas emissions by at least 55% by 2030. The package presents a policy action plan on how to achieve Europe’s climate targets, in line with its ambition to become the first climate-neutral continent by 2050. These interconnected proposals aim to align climate, energy and transport policies with the objectives agreed in the European Climate Act, translating climate goals into concrete actions. They include:

– Applying emissions trading to new sectors and tightening the current EU emissions trading system.

– Increased use of renewable energies and greater energy efficiency

– Faster deployment of low-emission transport modes and the infrastructure and fuels to support them.

– An alignment of fiscal policies with the objectives of the European Green Deal

– Measures to prevent carbon leakage and tools to preserve and increase our natural carbon sinks.

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MOL joins GCMD as impact partner to accelerate decarbonisation

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MOL joins GCMD as impact partner to accelerate decarbonisation. Image: Pixabay
MOL joins GCMD as impact partner to accelerate decarbonisation. Image: Pixabay
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The Global Centre for Maritime Decarbonisation GCMD and MOL announced the signing of a five-year Impact Partnership agreement. On the same day, both parties held a signing ceremony at the GCMD office in Singapore.

Decarbonisation in the maritime industry is a challenge that needs to be achieved through accelerating collaboration and increasing investment by shipping companies, their customers, ports, energy suppliers and public sector actors. As an Impact Partner of GCMD, MOL will utilise its expertise developed over their long history and make various contributions and collaborations through its participation in GCMD’s projects, including providing access to vessels, operating data and evaluation reports so that internal learnings can be shared publicly and used for future trials.

MOL is one of the world’s leaders in the maritime industry and has been leading worldwide discussions on achieving decarbonisation. The carbon budget concept imposes a ceiling to the cumulative amount of greenhouse gas (GHG) that can be emitted globally in order to limit global temperature rise to 1.5 degree Celsius by 2050. Intermediate targets to reduce emissions, in addition to a net-zero target, are necessary. While plans are in place to adopt low or zero emissions vessels in the future, it is important to deploy measures to reduce emissions now. Such measures include the use of low-carbon and transition fuels that are available today, and deploying energy savings devices onboard vessels. MOL will bring its extensive capabilities and experience to bear as it joins GCMD and existing partners to accelerate international shipping’s decarbonisation.

Professor Lynn Loo, CEO of the Global Centre for Maritime Decarbonisation, said: “We are proud to have MOL, one of the leading shipowners in Japan, come onboard as an Impact Partner. We are excited to tap on MOL’s track record in developing technical energy efficiency measures to broaden our perspective as we scope an initiative to help increase industry adoption of measures that can increase fuel efficiency of ships.”

Toshiaki Tanaka, Representative Director, Executive Vice President Executive Officer, and Chief Operating Officer of MOL, said: “We are very pleased to be a partner of one of the most important global coalitions. We will make our biggest effort to contribute and accelerate progress towards the net zero future in maritime industry, together with GCMD and all its partners.”

About the Global Centre for Maritime Decarbonisation

The Global Centre for Maritime Decarbonisation (GCMD) was set up on 1 August 2021 as a non-profit organisation. Our strategic partners include the Maritime and Port Authority of Singapore (MPA), BHP, BW Group, Eastern Pacific Shipping, Foundation Det Norske Veritas, Ocean Network Express, Seatrium, bp, Hapag-Lloyd and NYK. Beyond the strategic partners, GCMD has brought on board 15 partners that engage at the centre level, in addition to more than 80 partners that engage at the project level.

Strategically located in Singapore, the world’s largest bunkering hub and second largest container port, GCMD aims to help the industry eliminate GHG emissions by shaping standards for future fuels, piloting low-carbon solutions in an end-to-end manner under real-world operations conditions, financing first-of-a-kind projects, and fostering collaboration across sectors.

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Hapag-Lloyd partners with DB Schenker to decarbonise supply chains

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Hapag-Lloyd partners with DB Schenker to decarbonise supply chains. Image: Hapag-Lloyd
Hapag-Lloyd partners with DB Schenker to decarbonise supply chains. Image: Hapag-Lloyd
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Hapag-Lloyd has entered into a partnership with DB Schenker for the purpose of decarbonising supply chains. Following the launch of “Ship Green” in May, the renowned logistics provider has selected Hapag-Lloyd’s sustainable transport solution as part of its sustainability initiatives.

DB Schenker and Hapag-Lloyd have signed an agreement for emission-reduced container transports with a waste- and residue-based biofuel. By end of 2023, DB Schenker plans to claim approximately 3,000 metric tonnes of carbon dioxide equivalent (CO2e) emissions avoidance. This is based on at least 1,000 tonnes of pure biofuel.

“We are excited about this new partnership with DB Schenker as we share the common goal of making logistics more sustainable. Collaborations like these set a clear signal in the industry and are another example of a step-by-step approach to further decarbonise supply chains”, said Henrik Schilling, Managing Director Global Commercial Development at Hapag-Lloyd.

“I am very pleased that together with Hapag-Lloyd we are setting another example for sustainability in our industry. This partnership further enlarges our global biofuel offer in ocean freight. With this commitment we are one step closer to our goal of becoming carbon-neutral”, said Thorsten Meincke, Global Board Member for Air & Ocean Freight at DB Schenker.

Hapag-Lloyd has launched the Ship Green product to offer its customers emission-reduced ocean transports. Based on biofuel, customers of Hapag-Lloyd can add Ship Green as an additional service to their existing bookings – thereby avoiding CO2e emissions. Using the so-called “Book & Claim” chain of custody, Hapag-Lloyd can attribute avoided emissions to all ocean-leg transports, regardless of the vessel and route used. Ship Green is available for all shipments containing standard, hardtop or tank equipment. By offering Ship Green, Hapag-Lloyd is continuing along its path towards achieving climate-neutral fleet operations by 2045.

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EU member states agree to the “FuelEU Maritime” regulation

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EU member states agree to the "FuelEU Maritime" regulation. Image: Port of Hamburg
EU member states agree to the "FuelEU Maritime" regulation. Image: Port of Hamburg
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EU Member States cleared the way to bring sustainable renewable fuels into maritime transport. They approved the “FuelEU Maritime” regulation. The EU Parliament had also voted in favour of the agreement reached in the trilogue procedure.

The new requirements will apply to ships with a gross tonnage of more than 5,000 entering, leaving or staying in ports in the territory of an EU Member State. In addition, shore-side electricity will be mandatory for container and passenger ships from 2030. The use of synthetic fuels from renewable energies will be specifically promoted for shipping.

Federal Minister of Transport Dr Volker Wissing:
After we were recently able to achieve a breakthrough for maritime climate protection at UN level, we are now pushing the actual transformation towards climate-neutral shipping at European level with the “FuelEU Maritime” initiative. The draft regulation is open to technology and takes into account the special competitive conditions in the maritime transport sector. The main objective is to increase the demand for renewable and low-carbon fuels and their consistent use, thereby decisively reducing greenhouse gas emissions in maritime transport. The initiative is thus expected to play a fundamental role in the implementation of the European Climate Change Act for shipping.

Federal Environment Minister Steffi Lemke:
Today the EU has set a decisive course for more climate protection and the use of renewable fuels in maritime transport. Shipping companies will continue to rely on fuels in the future, because electric drives are not yet an option for long-distance transport. In maritime transport, e-fuels from renewable energies are therefore a sensible climate-friendly alternative. With the new requirements, the EU is giving manufacturers and shipping companies the necessary planning security, driving forward the development of modern technologies and making renewable fuels for maritime transport ready for the market. But there are also shadows: The fact that fuels from fossil sources and nuclear energy are also permitted as a compliance option is regrettable. The German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) will continue to advocate the use of predominantly synthetic fuels from renewable energy sources in order to make maritime transport climate neutral.

FuelEU Maritime lays down uniform EU-wide rules for limiting the greenhouse gas intensity of the energy used on board a ship, and thus above all the fuels. The regulation from the Fit for 55 package stipulates that shipping in the EU must reduce its emissions by 2 percent from 2025, 6 percent from 2030, 14.5 percent from 2035, 31 percent from 2040, 62 percent from 2045 and 80 percent from 2050. The GHG intensity reduction targets are set against the 2020 average GHG intensity of energy consumed on board ships. The greenhouse gas emissions of all fuels are assessed on the basis of a life cycle assessment (so-called well-to-wake (WtW) approach that includes the greenhouse gases carbon dioxide, methane and nitrous oxide). All fuels are permitted as a compliance option; the legislative initiative is thus technology-neutral.

The use of synthetic fuels is encouraged by a special mechanism: if the share of synthetic fuels from renewable energy sources (so-called “renewable fuels of non-biological origin, RFNBO) in the fuel mix does not exceed one percent in 2031, a mandatory minimum quota of two percent for these RFNBO fuels will automatically come into force from 2034. Beyond the use of alternative fuels, the FuelEU Maritime Regulation obliges container and passenger ships in ports in the territory of a Member State to use shore-side electricity or alternatively zero-emission technologies for on-board energy supply.

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from 1 January 2025, with the exception of certain Articles which shall apply from 31 August 2024.

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