EU Energy Policy: Impact on European Ports

By Isabelle Ryckbost, Secretary General ESPO
Autumn 2014

Energy is high on the agenda of Europe's decision makers. Half of the candidate Commissioners were claiming the Energy portfolio and the Energy committee in the Parliament was also fi rst on the wish list of many incoming Members of the European Parliament.

Not without reason. First, there is climate change. We all know that to tackle the climate change phenomenon we need to "decarbonise", stop the burning of fossil fuels. This is achievable through shifting to renewable energy sources and pursuing energy efficiency.

Second, there are the delicate geopolitical relations with Russia, the biggest exporter of fossil energy sources in the world, which obliges us to refl ect on our energy supply and indirectly also on our dependency of oil and gas.

Ports have an important role to play in the fi eld of energy. First there is the maritime transport side. And since ports are more than transhipment platforms we should also look at the other transport modes connecting the maritime leg with the hinterland. How can all transport modes respond to the upcoming challenges? But there is more: ports traditionally play an important in importing, exporting, storing and distributing energy. Finally, ports are also home to vast industrial complexes. If those industries are faced with difficult targets as regards energy effi ciency or decarbonisation, this will also affect the ports that host them.

So, it is without saying, that the challenges in the field of energy are, or, should be high on the radar of Europe's ports.

The designation of Sulphur Emission Control Areas (SECAS) in the North and the Baltic Sea will undoubtedly have a great influence on ship fuels. As of 1 January 2015 vessels that sail in SECAs will have to burn fuel with a maximum sulphur content of 0.1%. This will mean a shift from Heavy Fuel Oil (HFO) to compliant Marine Gas Oil (MGO) with an immediate increase in the fuel price of up to 40-45%. Moreover, it is still uncertain if Marine Gas Oil will be available in enough quantities to cover the demand. But there are alternatives. The first is to continue burning heavy fuel oil in combination with exhaust gas cleaning systems, the so called "scrubbers". Here as well it is yet unclear if scrubbers will be allowed in all ports given the impact on other EU environmental legislation, like the Water Framework directive. The other alternative is the use of low sulphur fuels with the most promising being Liquefied Natural Gas (LNG). It is widely expected that 2015 will see a combination of the three main compliance methods in the SECAs.

As a consequence of the new sulphur rules, bunkering facilities will have to adapt to mainly offer MGO and in certain limited cases in the short run LNG to vessels. Moreover, in accordance with the upcoming Directive on alternative fuels infrastructure, a sufficient amount of LNG refuelling points need to be foreseen in Europe's core ports by 2025. European ports will then have to study the most convenient locations for installing LNG bunkering facilities in their areas and to ensure the safety and efficiency of bunkering operations.

But apart from the fuel used in shipping, an overall "decarbonised energy policy" will also affect ports in a broader sense. As a matter of fact, more than 35% of all commodities handled in European ports are sources of energy. What if Europe is becoming less oil dependent? Are or can ports play an equally important role in the import, export, storage and distribution of alternative energy? I believe the new energy mix might breathe new life into many ports. Next to the important role ports can take up when it comes to LNG, biomass, European ports can also play an essential role in the development and maintenance of renewable energy sites such as on and off shore wind mill parks, wave energy and tidal energy.

Moreover, as hotspots for Europe's industrial activity, ports will need to monitor their industries and the challenges they are facing to respond to Europe's energy challenges and policy.

Last but not least, ports realise they have to contribute themselves to the decarbonisation process by improving their energy performance. Energy consumption has entered for the first time in the ESPO top-10 environmental priorities in 2009 and gained significance in the last review 2013. ESPO's green guide therefore dedicates a full chapter on energy conservation and climate change. 72% of European ports monitor their energy consumption while that more than half of European ports monitor their carbon footprint (EcoPorts SDM 2014). 57% of ports have a programme to increase energy efficiency (Port environmental review 2009).

To conclude, if energy and energy policy are a priority for the European decision makers, it is certainly also a top priority for European ports. For this reason ESPO will also dedicate its next annual Conference (21-22 May 2015 in Piraeus - Greece) to the theme of energy in ports.