IAPH calls for revenues from market-based measures to be invested in ports

IAPH calls for revenues from market-based measures to be invested in ports
IAPH managing director Patrick Verhoeven

The International Association of Ports and Harbours (IAPH) is advocating that a significant share of the revenue generated by a market-based measure (MBM) on emissions should be allocated to investments in ports, particularly in developing countries, that facilitate the decarbonisation of shipping.

The UN-recognised NGO has submitted a commenting paper to the IMO ahead of the forthcoming meeting of its working group on greenhouse gas (GHG) emissions.

This meeting is in turn preparing the ground for the crucial upcoming Marine Environmental Protection Committee (MEPC 77) in November.

IAPH managing director Patrick Verhoeven said: “We all know that decarbonising shipping is much more than decarbonising ships. It’s about the whole supply chain. A lot of the investments will have to be made on land and in ports.

“Our proposal is to consider port-related infrastructure including bunkering infrastructure as part of the investments that could be funded through such market-based measures, especially in developing countries in order to close the gaps in energy transition.

A recent study made in 2020 by UMAS and the Energy Transitions Commission for The Getting to Zero Coalition estimates that the scale of cumulative investment needed between 2030 and 2050 to achieve the current IMO target of reducing carbon emissions from shipping by at least 50% by 2050, is approximately US$0.8-1.2trillion.

If shipping was to fully decarbonise by 2050, this would increase the total investments needed to US$1.2-1.6trillion.

The biggest share of investments is needed in the land-based infrastructure and production facilities for low-carbon fuels, which make up around 87% of the total investment, noted the IAPH. Storage and bunkering infrastructure would account for half of these investments.

The Getting to Zero Coalition is a partnership between the Friends of Ocean Action, the World Economic Forum and the Global Maritime Forum, which recently led a call to advance the IMO targets and achieve full decarbonisation of shipping by 2050. This was co-signed by IAPH as a supporting organisation.

The commenting paper also mentions that such investments suffer from the ‘chicken and egg’ dilemma, with ports unlikely to make investments in this infrastructure and related facilities if there is no obvious demand for them as the risk of being left with large, stranded assets is too high.

Equally, shipping companies are unlikely to invest in zero carbon fuels or onshore power provisions if no infrastructure is available in ports.

The IAPH argues that financial support of decarbonisation investments in ports, particularly in developing countries, through revenues generated from an MBM will help resolve this deadlock and ensure simultaneous global deployment of ship-based technologies and onshore infrastructure.

Verhoeven added: “This matter belongs to the much broader issue of narrowing the divide between developed and developing countries in terms of port infrastructure related projects and initiatives targeting the decarbonisation of shipping beyond bunkering.

“This includes the provision of Onshore Power Supply and that of port incentives to low emission vessels as well as optimisation of port calls. This is also clearly recognised under the IMO-Norway GreenVoyage2050 project which targets capacity building in developing countries in all four key areas identified by the 2019 IMO Ports Resolution.”