Are Shippers Ahead of the Curve on the Energy Transition?

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The maritime shipping industry is making strides in its low-carbon objectives, with the Panama Canal authority boasting Wednesday it was among the cleanest routes when compared to the alternatives.

The authority announced plans in April to become carbon-neutral by the end of the decade, in part by offering a shorter route for maritime trade. Elsewhere, the Panama Canal said it would work to deploy tugs and other support vehicles that run on alternate fuels.

In 2020, the Panama Canal contributed to a reduction of more than 13 million tons of carbon dioxide (CO2)-equivalent emissions because the route through the isthmus is shorter than the alternatives. Last year, those equivalent emissions reached 16 million tons, the loose equivalent of the amount produced by some 3.2 million passenger vehicles in a given year.

Panama Canal Administrator Ricaurte Vásquez Morales said a carbon emissions dashboard launched last year helps shippers realize shorter, and subsequently cleaner, routes that can contribute to a more sustainable supply chain.

"Throughout the year, the dashboard has provided visibility to customers and stakeholders of the CO2 emission savings generated by choosing the Panama Canal route, as we move forward with initiatives to become carbon neutral," he said in a statement.

Click on the image at right for a Panama Canal chart showing CO2 emission savings by main market segment.

The International Maritime Organization (IMO) adopted measures, referred to as IMO 2020, that are meant to lower the emissions from offshore trade. Shippers are called on to use cleaner fuels, such as liquefied natural gas (LNG), or install onboard exhaust cleaning systems, called "scrubbers," to reduce their emissions.

Four years before the COVID-19 pandemic, and long before the words "energy transition" were utilized to describe the move away from fossil fuels, the IMO already had adopted an energy-efficient management plan that describes speed control as a way of improvement.

A later greenhouse gas strategy adopted by IMO calls on shippers to "consider and analyze the use of speed optimization and speed reduction as a measure, taking into account safety issues, distance travelled, distortion of the market or to trade and that such measure does not impact on shipping's capability to serve remote geographic areas."

Panama Canal authorities took part in the COP26 climate summit in Glasgow last year and joined with 150 other organizations committed to decarbonizing the shipping industry, which accounts for about 4% of total global greenhouse gas emissions.

In the future, the canal authority said it would consider a price structure that would take into account emissions from vessel transit through the waterway, based on onboard technology and maneuverability that would take the decarbonization strategy one step further.

Industrial Info is tracking a US$40 million aerial tram project at the Panama Canal. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for the project report.

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