AFIR and FuelEU Maritime: ESPO calls for cooperation and flexibility in the roll-out of onshore power supply to ensure smooth implementation of the legislation
On Monday 10 July, the European Parliament will discuss in Strasbourg the final agreement on both the Regulation on the deployment of Alternative Fuel Infrastructure (‘AFIR’) - which sets the framework for the deployment of onshore power supply (OPS) in ports - and the Regulation on the use of renewable and low-carbon fuels in maritime transport and amending Directive 2009/16/EC (‘FuelEU Maritime’) - which regulates the use of OPS by ships in EU ports. Both agreements will be voted on Wednesday 12 July. Once the Council has then formalised its agreement with the text, both AFIR and FuelEU Maritime are expected to enter into force shortly after.
The European Sea Ports Organisation (ESPO) welcomes the final agreements, allowing ports, terminals and shipping lines to prepare for their implementation.
“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.”, says ESPO Secretary General Isabelle Ryckbost.
To assist their members in the process of deploying and using OPS in Europe’s ports, ESPO has already been organising different workshops. During these workshops different challenges relating to deployment and use of OPS have already been identified.
- The challenges mainly relate to the cost of deploying onshore power supply and the lack of business case, even if all OPEX costs are charged for and a depreciation cost for the infrastructure is borne by the users.
- At this stage, there is usually not enough grid capacity to provide several vessels at the same time with OPS.
- Where onshore power installations are in place, the price is currently often preventing users to plug in. Moreover, in most of the countries, the port authorities are to pay all year long a fixed cost for a large capacity that they often only need during a few months (e.g. cruise). The pricing system for electricity in most of the countries is not suitable for OPS. A more favourable regime for OPS is in many countries not possible.
- In larger ports, an upgrade of the grid network and capacity in the port, requires important additional investments in a service station and the upgrade of cables to the different quays and terminals.
- The operations of connecting/disconnecting the ship to the onshore infrastructure differ from segment to segment. On container terminals there is staff permanently available. On cruise terminals not. Therefore, extra staff has to be foreseen on the quay, during the connecting and disconnecting times as well as in between in standby in case of emergency. These operations require skilled workers. The weight of the cables implies at least two people to handle an installation.
- The OPS infrastructure is tailormade 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.
- There seems to be an unlevel playing field between Member States as regards the financing. 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.” continues Isabelle Ryckbost.
In accordance with the final AFIR text, 2030 will be the deadline for TEN-T ports to have onshore power (also known as shore-side electricity) infrastructure in place to serve the demand from container and passenger ships. The number of annual calls at the port (100 for container ships, 40 for passenger ships and 25 for cruise) triggers the obligation to have OPS in the port. Only ships that remain two hours or more at berth have to be supplied with shore-side electricity. FuelEU Maritime obliges ships to use the installations as from 2030, unless they use other zero emission technologies, with some exceptions until 2035.
Throughout the legislative process ESPO has been pleading for a goal-based approach and asked the legislators for the possibility to prioritise the OPS investments where it makes the most sense. Notwithstanding the prescriptive framework for OPS in article 9 of AFIR, ESPO’s members appreciate the text of recital 45 which refers to the different governance models for ports, allowing Member States to decide that the infrastructure is deployed within their ports in the different terminals according to the needs, in order to reach those targets. The text of the recital further stresses how important it is that the deployment within ports, and where relevant between terminals, be where the maximum return on investment and occupancy rate result in the highest environmental benefits in terms of greenhouse gases and air pollution reductions. ESPO hopes that the agreed-upon recital will be well considered in the implementation.
Furthermore, Europe’s ports very much welcome the emphasis (see recitals 4c and 7 and article 5, paragraph 5 of FuelEU Maritime) on the need for a coordinated approach to match demand and supply of onshore power supply involving all public and private stakeholders on both the ship side and port side, as well as any other relevant market actors, which should coordinate to allow for smooth operations on an everyday basis.
Finally, ESPO stresses once again that the huge investments that must be made in ports to meet the new AFIR requirements can only be realised if they come with significant public funding instruments which are fit for purpose. Installing and providing OPS infrastructure remains a complex and costly exercise, with a limited and slow return on investment for the managing body. Since the price tag will be an important element in the decision of the shipping lines to use OPS, ESPO also strongly calls for the introduction of an EU-wide permanent tax exemption for shore-side electricity in the reviewed Energy Taxation Directive. In the same mindset, given the contribution of OPS to the Green Deal objectives, and in light of the reinforced requirements, ESPO believes that funding should be foreseen for OPS projects in ports, under e.g. the Innovation Fund.