On Monday 10th July, the European Parliament is set to discuss the final agreement on both the Regulation and the deployment of Alternative Fuel Infrastructure (AFIR) in Strasbourg. The arrangement will set the framework for the deployment of onshore power supply (OPS) in ports and regulate the use of renewable and low-carbon fuels in maritime transport. On Wednesday, July 12th, both agreements will be put to a vote. After the Council has formalized its agreement with the text, AFIR and FuelEU Maritime are anticipated to come into effect soon after. The European Sea Ports Organisation (ESPO) welcomes the final agreements, allowing the preparation for the implementation of ports, terminals and shipping lines.
“The final adoption of the AFIR allows ports and all port stakeholders who are to play a role in the deployment of OPS to effectively prepare for compliance with the new rules. The development and use of new fuels and energy solutions, such as onshore power supply, is the most important pillar of greening the shipping sector. For ESPO, it is important that for the first time, the strict framework for deployment of OPS is accompanied by an obligation to use the infrastructure. The emissions at berth will only go down if the OPS installations are properly used. We now have to take the legislation to the quay and sit together with all relevant stakeholders including shipping lines and terminal operators to make quick progress ahead of 2030.”
Isabelle Ryckbost, ESPO Secretary General.
ESPO has been organizing various workshops to aid its members in deploying and utilizing OPS in European ports. These workshops have already identified several challenges related to OPS deployment and usage. One of the primary issues concerns the expenses associated with implementing onshore power supply, as well as the absence of a convincing financial justification. Even if all OPEX costs are accounted for and users bear the cost of infrastructure depreciation, the business case remains uncertain. At this stage, the grid capacity is insufficient to facilitate OPS for multiple vessels simultaneously.
In locations where onshore power facilities are available, users are often deterred by the high cost of plugging in. Additionally, port authorities are required to pay a fixed cost for a large capacity throughout the entire year, even though they only require it for a limited period (such as during a cruise season). The current pricing structure for electricity in many countries is not well-suited for onshore power systems. Unfortunately, a more favourable pricing system for OPS is not feasible in numerous countries.
When it comes to larger ports, expanding the grid network and enhancing the port’s capacity requires significant investments in upgrading service stations and cables for various quays and terminals. The process of connecting or disconnecting a ship to the onshore infrastructure varies depending on the segment. Container terminals have permanent staff available, whereas cruise terminals do not. Therefore, additional staff must be present on the quay during connection and disconnection times, as well as on standby in case of an emergency. Skilled workers are required for these operations, as handling the heavy cables necessitates at least two people for installation.
The OPS infrastructure is tailor-made to every ship type, making the long-term planning and investment complicated. Installing a fit-for-all OPS installation does not seem possible. It is thus essential for the investing parties to know if and who will be the user.
In some Member States the ports can rely on substantial levels of funding whereas in others the public funding is limited or not existent. Important levels of EU funding will thus be needed.
“While many ports already have OPS, or are in an advanced stage of planning this infrastructure, it has become clear from our workshops that there is little experience with the deployment and certainly the operational challenges and costs for OPS at the scale required by the new Regulation. Ports in Europe are in a learning process but are eager to make quick progress. We believe it is important for both policy-makers and all stakeholders involved to follow the implementation process closely, to identify barriers, address problems and find adequate solutions where needed and possible.”
Isabelle Ryckbost, ESPO Secretary General.
The deadline for TEN-T ports to have onshore power infrastructure to support container and passenger ships will be 2030, in accordance with the final AFIR text. The number of annual calls at the port triggers the obligation to have OPS in the port. The ships that remain two hours or more at berth have to be supplied with shore-side electricity. Ships will need to use the installations or other zero emission technologies from 2030 as ordered by FuelEU Maritime.
During the legal process ESPO have been asking for a worldwide approach and to prioritise the OPS investments where it is the most sensible. ESPO’s Members appreciate the text of recital 45 which refers to the different governance models for ports, despite the prescriptive framework for OPS in article 9 of AFIR. This allows Member States to establish that the infrastructure is deployed within their ports in the different terminals according to the needs, in order to reach those targets. As per the text of the recital, the importance of the deployment within ports have the maximum return on investment and occupancy rate. This should result in the highest environmental benefits in terms of greenhouse gases and air pollution reductions. is further stressed. ESPO anticipates that the agreed-upon recital will be well considered in the implementation.
In addition, Europe’s ports are open to the need for a coordinated approach to match demand and supply of onshore power supply. To allow smooth operations on a daily basis, all public and private stakeholders on both the ship side and port side, as well as any other relevant market actors, are involved.
ESPO highlights the importance that huge investments must be made to meet the new AFIR requirements and they can only come to fruition with significant public funding instruments which are fit for purpose. OPS infrastructure installation remains a difficult and expensive exercise with a slow and limited ROI for the managing body. Due to the cost being an important factor in the decision of the shipping lines to use OPS, ESPO have passionately called for the introduction of an EU-wide permanent tax exemption for shore-side electricity in the reviewed Energy Taxation Directive. Given the contribution of OPS to the Green Deal objectives, and in light of the reinforced requirements, ESPO considers funding to be expected for OPS projects in ports, under e.g. the Innovation Fund.
News sourced from European Sea Ports Organisation.
