In recent years, the ports and shipping sector has been undergoing significant transformations. A number of measures are being taken to decarbonise the maritime sector in order to reduce greenhouse gas emissions and enable a clean energy transition. Ports are an important infrastructure link for Indian trade and, therefore, are crucial for effectively managing the transportation of goods from ports via roads and railways. At the India Infrastructure Forum 2023, industry experts came together to discuss the progress of the port and shipping sector, the growing focus on sustainability and the steps needed to reduce its carbon footprint…
Progress so far
Over the past few years, the requirements of the ports and shipping sector have changed considerably. Earlier, there were discussions around tariff removal, the deepening of ports, improvement of port infrastructure, capacity augmentation and mechanisation, among others. These issues have been resolved to some extent.
Now, major ports are moving towards a different type of structure, where privatisation of terminals will enhance efficiency and the port authorities will act as landlords with a focus on initiatives defined under the Maritime India Vision 2030. International operators in the container segment are contributing towards the growth of the sector. Moreover, discussions are being held on decarbonisation, digitalisation and de-dollarisation. However, there are gaps in terms of interconnectivity or intermodal transportation for connecting ports with railways, roads, highways, inland waterways, etc.
The Major Port Authorities Act came into force in 2021 and new laws of regulations were introduced. Since then, several issues in the ports and shipping sector have been resolved and the sector is witnessing an encouraging growth trend.
That said, there are challenges. After operators show initial interest, there is a huge time lag before projects get bid out/get approved. This often results in bidders withdrawing their offers. Thus, the process must be accelerated to encourage bidders.
Move towards sustainability
The government aims to develop ports as energy hubs. These ports are going to play a very important role in encouraging and giving a push to other sectors because they will become a new hub for producing green energy, green ammonia, hydrogen, solar and wind power. Port operators are, thus, making sincere efforts to use green energy sources to meet their energy requirements. For instance, diesel-powered trucks are gradually being converted into liquefied natural gas (LNG) trucks.
The resources are priced at reasonable rates, and manufacturing costs are considerably lower in India compared to other countries. This gives India a competitive edge in its commitment towards reducing global warming and the fight against climate change.
Krishna B. Kotak
The ports and shipping sector is a hub for carbon-generating industries. The Government of India is pushing to become a part of the green and hydrogen economy. As India aims to become an exporter of clean energy, ports will play an integral role in this transformation. The dependence on green energy, and thus the demand for it, is set to rise as manufacturers also become environmentally conscious. Therefore, ports are going to play a substantial role in providing connectivity to green manufacturing hubs.
Steps needed to be taken
Krishna B. Kotak
On a pan-Indian basis, around 8,000 units of equipment are being operated at different ports of the country, consuming about 0.1 million litres of diesel every day. The dependence on polluting fuels should be reduced in order to lower carbon emissions. Thus, the electrification of equipment used at ports is an essential step for the shift from the use of petrol, diesel and gas towards decarbonisation.
There are several ports such as Visakhapatnam, Kandla and Jawaharlal Nehru Port that have substantial land around them. This surplus land is being used for generating renewable energy. For instance, Visakhapatnam port now generates about 50 MW of renewable energy, Jawaharlal Nehru Port is poised to reach 70 MW of renewable energy and Kandla port will produce 30 MW to 40 MW of renewable energy by 2024.
It is imperative for port and terminal operators to embrace self-sufficiency in renewable energy generation in order to achieve sustainability. As a part of the port-led economy model, it is necessary to include the establishment of green manufacturing enclaves as a key component.
In the next five years, coastal ships that sail up to 300 nautical miles will be driven by electricity. Going forward, greater connectivity of ports through railways is required, as several inland container depots are also being developed.
The need for green energy will arise even more when industries are established closer to green ports. Additionally, due to India’s low carbon tax, demand from overseas players will increase as it is more cost-effective to domestically produce green ammonia and sell it to other countries.
The production-linked incentive scheme has been implemented successfully for the manufacturing industry. It is necessary to consider introducing this scheme for the port sector as well. Additionally, incentives should be offered for the creation and application of renewable energy sources in the logistics industry.
Since ports are an important infrastructure link, efforts are required to connect ports with railway lines. This will strengthen the ports’ connectivity with the hinterland. Every state is pushing for industrial hubs to be built around its ports (port-led development), and foreign companies are also expressing interest in establishing manufacturing hubs close to Indian ports. In this regard, discussions are being held with other nations and need to be supported by speediness in decision-making and the approval process.
Multimodal transportation will aid in accelerating the sector’s overall development, as it requires integrated development of infrastructure. The aim should be to look at shore connections and provide incentives to set up solar or wind facilities at the ports.
A green port policy is expected to be rolled out soon, which will focus on carbon neutrality. Although the draft policy has already been formulated, the concession agreements should be amended in line with policy mandates. Thus, port authorities should come up with master plans for reducing the carbon intensity, as the draft policy provides for financial incentives and viability gap funding for doing so.