26 October 2023 (Lloyd's List) - APM Terminals and DP World have joined forces in an effort to drive forward the electrification of container terminal handling equipment.

A new White Paper commissioned by the two global terminal operators seeks to accelerate decarbonisation of the world’s terminals through the widespread electrification of container handling equipment.

“We want to start a dialogue about how we as an industry can get to net zero across the whole ecosystem in ports,” said APMT chief executive Keith Svendsen.

“We have engaged in this research in how to electrify container handling equipment because this is an important source of energy across the supply chain. We think there are concrete actionable steps we can take now to make a meaningful impact.”

One of the key findings of the White Paper is that the 1,000 plus container terminals in the world using diesel equipment emit 10m-15m tonnes of CO2.

“We are talking about meaningful opportunities to reduce emission,” Svendsen said.

“Port equipment is an essential cog in the machinery of global trade, so it is a large addressable area where there are solutions available.”

But electrification needs to be attractive and affordable to the industry so the sector can speed up the transition from fossil fuels to carbon-neutral technologies.

“The biggest obstacle is total cost of ownership,” said DP World chief operating officer Tiemen Meester.

“It is the purchase price, which has to do with a lack of scale and standardisation. You also have to adapt your infrastructure, which comes at a cost. Then there are operational elements like allowing charging time for batteries. All these things add up to a higher cost of ownership and we need to turn this around.”

Doing so could eventually lead to savings for operators. Operating expense savings could be as much as 50%, which is significant in a low margin sector such as terminals.

“The issue is one of scale,” Meester said. “While hydrogen cannot be dismissed as an alternative, it will only be available in the right quantities in a few places. But electrification can be done at scale.

“The other main obstacle is delivery time. If someone needs to replace a machine they will go for the same machine as it is quicker.”

But terminal electrification faces the same chicken and egg problem that has dogged the future fuels debate in shipping.

“We need to get to a tipping point where electrification becomes attractive and affordable and available to speed up the transition,” Svendsen said. “If we work across the industry, we could reach that within a decade.”

He argues that equipment manufacturers need a clear indicator on what type of technology will be used so they can build up their production capacity and be sure what technology they should be on.

Standardisation would also help the reduce the cost curve of new equipment, he said.

“We have to be clear with the demand signal, both with the energy source and the equipment,” Svendsen said. “This will speed up the tipping point where the cost of ownership is no longer an argument.”

Government incentives

The two companies are also calling on governments and port authorities to incentivise the move to electric, making it a requirement when new concessions are granted and existing one renewed.

But for any move to electric to be truly green, there must be a reliable source of renewable electricity.

“There is no point being electric if that electricity comes from a coal-fired plant,” Svendsen said.

APMT already sources 40% of its global electricity needs from renewable sources, and 100% in Europe. Its Maasvlakte II terminal in Rotterdam recently replaced the last of its diesel equipment and is now entirely electric.

“A clean grid is important,” said DP World’s Meester.

“If the operators can’t get it, we will somehow facilitate it, either through purchase agreements or building solar solutions within the port.”

Even if container handling equipment was not the largest emitter in the supply chain, the sector could not take the approach of saying it was not enough to worry about.

“It just needs to get done,” Meester said.

But collaboration would be the best way of achieving that, Svendsen added.

“None of us is large enough to move the needle alone, therefore we need to solve this collaboratively,” he said.

“The quicker we work together the quicker the cost of ownership issue goes away.”