The three most severe issues for European seaports.
Annaleena Mäkinä (President of ESPO) emphasized the important role of ports in the energy transition. Due to the war between Russia and Ukraine and the sanctions imposed on importing gas and oil, ports are coming to the forefront, and in doing so will underline the global energy transition. This can already be done in the short term by building up stocks and supplying gas, and in the longer term by switching to renewable energy.
If it is up to our seaports, the energy transition will succeed, according to Mäkina. However, there is no ready-made solution, and port authorities must look together at how to make it happen. As a result, the conference was mainly about getting all kinds of information together and exchanging experiences and ideas.
Below is a brief report on the three hottest topics.
1) Container shortages and accumulations
With China slowly coming unstuck, European ports are expecting an “absolute horror show.” Tim Power of maritime research firm Drewry says “it’s going to be lollygagging. Power analyzes the movement of the container market and foresees spring problems in the near future.
Because of the crowds, ships will have to deal with longer waiting times in ports. But there is also a longer waiting time in the warehouses and for transport. The current container shortage is predicted to become even more acute. This also has to do with the shortage of personnel and the accumulation of containers destined for Russia, with which nothing can be done now.
China specialist Jacob Gunter agrees with this, but also says “The congestion is only really going to start now that China is slowly getting going” It’s not just Shanghai that was in a lockdown, this is just the city we hear the most from. China in general is struggling to maintain production and consumption. The more frequent and longer lockdowns are repeated the greater the impact on ports worldwide.
When asked when the container market will return to normal, it was said that this is difficult to predict. It is assumed that this will get worse before it improves according to Power. When asked about the current rates, the specialist replied, “As long as the market can afford it, it will continue to pay. I expect that the transport of containers will cost even more. Even though the shippers are already dissatisfied with the service level.”
2) The energy transitions
Rotterdam and Antwerp are mainly focusing on hydrogen imports, while Ebsjerg is again focusing on wind energy. ESPO members agree that ports are necessary for the energy transition and the reduction of global CO2 emissions. However, there is no easy task as there is no one-size-fits-all solution especially for ports.
Jesper Bank CCO of the Port of Esbjerg says, “A long-term vision is a first step, with wind energy being the future source of renewable energy in the EU.” The Danish port has been focusing on wind energy since the 1990s. However, at the same time it is difficult because you do not know if you are investing in an infrastructure that will be obsolete or redundant in a few years.
Mark Dijk the managing director of the Port of Rotterdam said “In the choices for wind, hydrogen or otherwise, a port company must take the lead itself and not wait and see what the politicians impose. Each port has different strengths that have developed historically. While it is true for everyone that we must be energy-neutral by 2050. Rotterdam is a fossil port; half of what is done there has to do with oil. So the port is crucial in the transition and we choose hydrogen.”
Point of attention for the ports, however, remains bunkering capacity. What fuel do you offer for the ships that visit you? Do you offer fuel oil, diesel, methanol, hydrogen, shore power? Especially in the transition years, this poses a dilemma. If the bunker capacity is not there, the ships won’t come.
3) How much control does the port authority have?
Research by the ESPO, which is conducted once every five years, shows that by 2022, 93% of the port will have a shareholder structure. This structure comes in different forms.
Some ports are (co-)owned by municipalities, provinces, governments, which sometimes makes it more difficult for ports to invest in infrastructure or make decisions about land allocation.
What is remarkable is that currently most ports are self-sufficient in energy. 2/3rds generate their own energy through solar power. And that most ports depend for their income on the charges for the use of the infrastructure and there ground.
During the congress, the ESPO came up with the “Valencia Declaration.” This is a call to national governments and the EU to strengthen the “port ecosystems”. The manifesto asks for financial and non-financial support in the energy transition and CO2 reduction. According to the ESPO, ports must be at the top of the list in the EU’s investment plans.
Ports must also be able to rely on a legislative framework that allows for both short- and long-term plans. Permit procedures and financing processes must therefore be accelerated, ESPO believes.