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"A key part of this strategy is the need for ports to provide infrastructure that supports the shipping industry in its decarbonisation."
Just like the industries already considered in this series (including oil and gas, mining, shipping and aviation), ports and terminals are likely to be impacted by changes in the regulatory landscape of the countries in which they are located as governments consider how best to comply with their international obligations and any political promises. Such changes are likely to focus on how current policies, practices and regulations need to be updated, which in turn will increase requirements placed on commercial users.
Under the IMO’s 2023 IMO GHG Strategy (a framework for Member States setting out the future vision for international shipping and reduction of GHG emissions), the main target is to reduce the carbon intensity of international shipping by at least 40% by 2030. A key part of this strategy is the need for ports to provide infrastructure that supports the shipping industry in its decarbonisation. This includes regulatory, technical, operational and economic actions, such as provision of onshore power supply from renewable sources, safe and efficient bunkering of alternative low-carbon and zero-carbon fuels, incentives promoting sustainable low-carbon and zero-carbon shipping and support for optimising port calls including facilitation of just-in-time arrival of ships.
However, as technology in this area is still developing and in a competitive market for global trade, it is not always easy to meet all demands of relevant stakeholders including legislators, neighbours, shipping companies and NGOs. As state entities typically own or manage ports and terminals, there is a risk they may be exposed to claims if they fail to take steps towards sustainability both on the basis of national law and regulation and international law.
LEGAL CHALLENGES TO PORT OPERATIONS AND LICENCING
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"The construction, extension and operation of ports and terminals has a significant risk of being adversely affected by the effects of climate change."
Due to their location, the construction, extension and operation of ports and terminals has a significant risk of being adversely affected by the effects of climate change, which means there is a need to improve and upgrade facilities to (in some cases literally) weather ever stronger storms. However, achieving necessary construction goals is not always easy in practice.
The rights of the surrounding local communities (including indigenous and other populations exercising cultural and subsistence rights, particularly relating to fishing) are often intimately connected with the surrounding environment. As a result, we have seen a number of cases which rely on those rights to challenge licensing for ports and terminals projects, such as Federal Public Prosecutor’s Office v. State of Pará and Municipality of Santarém (Tapajós – Xingu Logistics Corridor), an ongoing claim for an injunction against further development in the absence of free, prior and informed consent for the expansion of the port. In this case, it is alleged that the State of Pará and the Municipality of Santarém repeatedly failed to comply with legal requirements for comprehensive environmental impact assessments and consultations with these communities. Another example is Vecinos para el Bienestar de la Comunidad Costera v. Federal Energy Regulatory Commission (USCA Case #20-1045) in which a community group attempted to attack as inadequate the ozone analysis which formed the basis of a licensing decision (the court found that the government body had not acted outside its authority and had adequately considered the environmental impacts).
"As ports are generally operated as public regulated bodies, they are also likely to be susceptible to judicial review style proceedings."
As ports are generally operated as public regulated bodies, they are also likely to be susceptible to judicial review style proceedings, such as Natural Resources Defense Council, Inc. v. City of Los Angeles (Super. Ct. No. 37-2021-00023385-CU-TT-CTL) (“NRDC v City of Los Angeles”) which argued that the city of Los Angeles had failed to properly assess and enforce mitigating measures against GHG emissions. The court found that some of the alleged failures had occurred and ordered the City of Los Angeles to correct these, having a direct effect on the legal obligations applicable to one of the ports’ tenants China Shipping (North America) Holding Co., Ltd. In Citizens for Clean Air & Clean Water in Brazoria County v. U.S. Department of Transportation (No. 23-60027), petitioners argued that the agency failed to conduct a thorough environmental impact analysis, including inadequate assessments of oil spill risks, worst-case scenarios, impacts on protected species and air quality. However, the court found the agency’s environmental impact analysis to be adequate and thorough, and the petitioners lacked authority to challenge timeline violations under the Deepwater Port Act.
SELF REGULATION
Although ports and terminals do not have a global governing body that would regulate and coordinate the supply of greener fuels and other decarbonisation practices, per se, several initiatives have been developed to attempt to address the lack of global ports and terminals regulation.
For example, the C40 Green Ports Forum was established to create “green shipping corridors” (a specific maritime route between two or more ports where zero-emission shipping solutions are implemented and supported). The UN’s Clydebank Declaration aims to create at least six green corridors.
"The uptake of the incentive schemes by ports and the number of certified ships is currently limited."
The International Association of Ports and Harbours (“IAPH”) Port Readiness Level for Marine Fuels assessment tool allows ports to pinpoint which aspects require further development to facilitate bunkering of a low- or zero-carbon marine fuel. See further our articles on the implications of EUETS and Fuel EU Maritime for ports.
Several port authorities also provide voluntary incentives to assist decarbonisation and a number of national, international or intergovernmental programs provide grants to support investment in innovative decarbonisation measures. Industry-initiated incentive schemes (mainly based on environmental indices initiated by ports, government, industry and NGOs) include the Environmental Ship Index introduced by World Port Climate Initiative; the IAPH Green Award; the clean shipping index; the GHG emissions rating initiative launched by the Carbon War Room; and the Green Marine environmental programme. In the context of the total number of ships and ports in the world, the uptake of the incentive schemes by ports and the number of certified ships is currently limited, but this may well increase over time as shipping companies increasingly need to take advantage of green port infrastructure to meet their own decarbonisation targets.
CARBON CREDITS
"There is currently an under supply of appropriate credits."
As we reported in relation to aviation, at least in the short term, the shipping industry, including the ports and terminals which serve it, may need to incorporate reliance on carbon credits as part of their emissions mitigation efforts. For example, in NRDC v City of Los Angeles, the court ordered US$2m in compensation, payable by China Shipping on the basis of the market value of carbon credits in 2019 needed to offset the excess GHG emissions from the terminal for the year 2030. However, there is currently an under supply of appropriate credits which governments will need to address as part of the response to state obligations on climate change.
What does the future hold for ports and terminals?
The number of ports and terminals utilising renewable energy and electrified vehicles and equipment is already on the rise.
For example, the Portsmouth International Port pioneers the Sea Change project, enabling visiting ferries or cruise ships to turn off their engines and plug-in, ensuring green electricity runs their onboard systems. Other innovations include smart digital tools, with a dashboard of data insights and a digital twin ecosystem enabling project partners to select and share data securely. Seawater harvesting enables heating and cooling of the terminal building, and wind and solar technology as well as internal and external living walls purify the air.
Other sustainability initiatives in ports include fully solar-powered lighting initiatives and shoreside power capabilities. The Port of Dover has an environmental monitoring programme and has reduced its carbon footprint by 85% since 2007. It has several sustainability targets including using alternative fuels and renewable energy sources, offsetting carbon emissions, electrifying the port’s landside fleet and minimising carbon emissions in development projects and procurement.
There are at least 29 cruise ports globally equipped with shore power capabilities, including using alternative fuels, renewable energy sources and cruise ship shore power in line with the Cruise Lines International Association requirements. Several Baltic and northern European countries have set up the Green Cruise Port Project with the aim of improving port infrastructure to reduce cruise emissions.
Following speed restrictions initially implemented as a result of a sudden influx of vessels after Covid-19 restrictions eased, the ports of Long Beach and Los Angeles have continued a scheme in which incoming ships are given a queue number and provided speed restrictions. This has both eased congestion and reduced emissions.
We are already seeing an increase in projects to provide co-located renewable power sources at ports, particularly where grid capacity and other infrastructure issues could otherwise result in an inability to access sufficient renewable power. As regulation increases, ports that cannot offer this support appear likely to be increasingly sidestepped.
Trainee Elias Votta also contributed to this article.
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