GREEN4SEA Conference & Awards

5 Apr 2017
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GREEN4SEA Conference & Awards

5 Apr 2017
Learn More

Panama Canal sets the direction to green shipping

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In an exclusive interview with GREEN4SEA, Mr. Alexis Rodriguez, Panama Canal’s Environmental Protection Specialist, talks about Canal’s Green Route strategy which consists of many initiatives encouraging operators to enhance environmental performance in the industry. Mr Rodriguez says that with the implementation of these green practices, the Panama Canal expects a 20% reduction in CO2 emissions and reveals further projects on the pipeline which will additionally contribute to sustainability and energy efficiency.

 

GREEN4SEA: What are your suggestions to industry stakeholders to enhance environmental performance in the industry? How does Panama Canal Authority encourage sustainable and green shipping practices? 

Alexis Rodriguez: The shipping industry has an important role in the world trade. Nearly 90% of goods are transported by the international shipping industry. Efficient operation and vessels with high environmental performance, not only reduce company’s costs, it could achieve the maximum of GHG emissions reduction. The effective implementation of environmental measures and an adequate policies framework will enhance the environmental contribution of the maritime sector.

Maritime Stakeholders are promoting new initiatives to enhance the early appliance of technologies, designs and operational measures that reduce GHG emissions and other pollutants gases as SOx and NOx. In this sense, the Panama Canal Authority in its Green Route Strategy has developed four aims:

  1. To contribute to world initiatives to reduce the gas emissions with greenhouse effect from the maritime industry through the acknowledgment and incentive of good practices executed by their clients.
  2. To reduce and mitigate the greenhouse gas (GHG) emissions through the development of more efficient projects of generation and the execution of energy efficiency measures to reduce the emissions per unit of production.
  3. To optimize the environmental management of the operations of the Panama Canal through the follow–up, evaluation and identification of better practices to avoid and reduce the environmental impacts.
  4. To comply with the socio-environmental agreement for a sustainable management in the Canal Watershed through the integral management of the natural resources that allows preserving and protecting the water resources.

As result of the implementation of the Green Route strategy, the Panama Canal Authority launches the Green Connection Environmental Recognition Program. This program is design to help the shipping industry to mitigate the environmental impact of their operations. The Green Connection Environmental Recognition Program promotes the reduction of greenhouse gas emissions by distinguishing vessels that comply with the highest environmental performance standards. The program consists of: The Green Connection Award and the Environmental Premium Ranking.

 

G4S: Tell us a few words about Panama Canal’s Environmental Premium Ranking. What are the Canal’s goals & aspirations for this initiative?

 A.R.: The Environmental Premium Ranking awards customers who demonstrate excellent environmental stewardship, and encourages others to also implement technologies and standards to help reduce greenhouse gas emissions.

In order for customers to receive the Environmental Premium Ranking, their vessels must meet at least one of the following requirements:

Indicator Level 1 Level 2 Documentation
1 EEDI threshold at least 20% below

the reference line

at least 30% below

the reference line

International Energy Efficiency Certificate
2 ESI threshold at least 35 points at least 80 points ESI database
3 Low NOx threshold at least 10% below

Tier II limit

at least 20% below

Tier II limit

Engine International Air Pollution Prevention (EIAPP) Certificate
4 LNG as fuel N/A LNG fueled engine LNG engine description

 

The Panama Canal Authority in its ongoing commitment to protect the environment has implemented the Green Connection Environmental Recognition Program to help the shipping industry mitigate the environmental impact of their operations. This initiative recognizes customers who demonstrate excellent environmental stewardship, and encourages others to also implement technologies and standards to help reduce greenhouse gas emissions.

 

G4S: What do you believe is the main motivation for a vessel to become a member of the scheme? What are the benefits for the vessels of participating in this initiative? 

A.R.: There are a large number of environmental indicators for ships and shipping companies. The Panama Canal has selected a number of indicators that are internationally recognized and used in various incentive schemes. All these indicators have in common that they measure or can be used to measure how far ships or shipping companies are ahead of environmental regulation or how they relate to the average of comparable ships. Every vessel that applies to this program will be differentiating between ships with a good environmental performance, and ships with an excellent environmental performance.

The Environmental Premium Ranking awards customers with percentage points in the “number of transits” portion of the Customer Ranking system to vessels that meet or exceed the specified environmental requirement. These additional points will allow customers to potentially improve or strengthen their position in the Customer Ranking system when applying for booking slots.

Vessels that fall within Level 1 will receive a 10 percent bonus for each transit when tallying a particular customer’s number of transits for purposes of determining its ranking. Similarly, vessels that fall within Level 2 will receive a 20 percent bonus for each transit.

In addition, The Panama Canal has developed a software tool, which automatically calculates the CO2 emissions associated with maritime transport, incorporating different routes and cargo transport modes. In order to provide added value for Canal users, an award system has been devised which is geared to the savings in tons of CO2 achieved by using the Panama route as compared with alternative routes. The inputs used in calculating CO2 emissions are: type of ship, amount of cargo, mode of transport, origin and destination of cargo.

 

G4S: What should be the top 3 priorities for the shipping industry stakeholders in relation to Sustainable Shipping? How Panama Canal may be of assistance towards that end?

A.R.:

1.     Efficient vessels and new technologies:

EEDI Phase 2 and Tier III regulations are promoting more efficient vessels delivering on the next years, this will be interesting in the contributions of emissions reduction by maritime transport.

As a further contribution to emission reduction, the expansion has triggered the construction of modern Neo-Panamax ships, which will lead to more efficient cargo transport, resulting in economies of scale and reduced fuel consumption per cargo unit carried. It has also made port operations and logistics more efficient, with new technologies contributing to a low-carbon maritime industry.

2.     Operational measures:

More vessels are around the world every year. Operational measures will give more opportunities to companies in base of the cost variables. Also operational aspects as SEEMP and EEOI will give more

The Panama Canal route with its expanded canal offers the maritime industry the opportunity to transport greater volumes of cargo using fewer ships. Moreover, it will reduce CO2 emissions and require fewer cargo movements by comparison with other air, road and rail cargo transport systems. Expansion of the Canal will cut distances and emissions, offering new perspectives in the promotion of a cleaner environment for people worldwide.

3.     Ballast Water Convention (Biodiversity):

The Ballast Water convention will enter in force on September 2017 and requires the adequate ballast water treatment. Administrations and flag states are preparing for the implementation of this important convention. This will allow biodiversity conservation, making shipping sustainable to the environment.

The Panama Canal doesn’t allow dumping of ballast water in their operative waters during transits.

 

G4S: Have you realized any tangible benefits or feedback from Canal’s sustainable initiatives that you would like to share with the industry? How happy are you with the implementation of Canal’s Environmental Program so far?


A.R.: Over its 102 years of operation, the Panama Canal Green Route is calculated to have saved approximately more than 650 million tons of CO2 emissions. It is estimated that the Green Route including the expanded Canal will save over 160 million tons of CO2 in its first 10 years of operation. We calculate that Panama Canal will increase additionally 20% of GHG emissions reduction with the implementation of the Green Connection Environmental Recognition Program. This calculation will be possible with the CO2 emissions calculator that allows more detail inputs as efficiency and other pollutant gases.

We are very glad about the implementation of the Environmental Premium Ranking, taking into account that vessels could apply 96 hours prior arrival. During the first 45 days of the program, we approved 155 vessels of 161 applications.

Types of vessel: 
1 General Cargo, 14 Vehicles Carrier, 89 Full Container Ship, 3 Chemical Tanker, 11 LPG, 43 Dry-Bulk

Size of vessels:
Handysize, Handymax, Panamax, Neo-Panamax

Companies that have applied:

NYK, MSC, MOL, Evergreen, Hyundai, Yang Ming, Hamburg Sud, COSCO, CMA CGM, Hapag Lloyd, Fednav, Glovis, Ariston, Grieg Star, Avance Gas, Oldendorff Carriers, Vitola, Donelly Tanker, Atlantic Gas

Environmental facts about applications:

42 vessels have been approved Level 2*

  • 41 EEDI 30% below reference line
  • 1 Low NOx 20% below reference line

109 vessels have been approved level 1*

  • 93 ESI more than 35 points
  • 13 Low Nox, 10% below regulation reference line
  • 22 EEDI 20% below regulation reference line

4 vessels have been approved Standard **

  • 4 Low Nox below regulation reference line

*Vessels can apply and comply with more than 1 indicator, we approve the highest level vessel can achieve.

** Vessels apply with a valid indicator but the score doesn’t comply with % below reference line. They can apply with different indicator and can be granted to level 1 or level 2.

All the applications and approvals comply with a review of the following technical documents:

  1. IEEC- International Energy Efficiency Certificate
  2. EEDI – Energy Efficiency Design Index Final Verification
  3. EIAPP- Engine International Air Pollution Prevention Certificate

Supplement and Engine Technical File

  1. IAPP- International Air Pollution Prevention Certificate
  2. ESI- Environmental Ship Index Compliance Certificate

 

G4S: What is your perspective regarding the future of shipping and what would be Panama Canal’s response? Do you have any new projects on the pipeline and/or plans for 2017 that you would like to share?

A.R.: Environmental facts will take more impact on the future of shipping.Vessels, bunkering operators and vessels are getting ready to 2020, signing agreements and getting prepare to the implementation of the Global Sulphur Cap 0.5% m/m. Approvals of scrubbers are growing up, this will be a measure to comply with the enter in force of the new regulation.

Panama Canal Advisory A-4-2017, in which the Panama Canal reiterate the enforcement to change from Heavy Fuel to Light fuel during vessels maneuvering on Panama canal waters. This operational measure will contribute to the emissions reduction not only CO2 but additionally of PM, Nox and Sox gases. It’s important that Panama Canal will maintain on the Global Sulphur Cap content as Marpol 73/78 Annex VI regulation 14 and reiterates that Panama Canal is not an Emission Control Area.

This operational measure reaffirms the Panama Canal commitment with the emissions reductions and being the Green Route of the international trade, taking into account that this measure was adopted on 2001.

Corozal Port

The two-phased port project will include the construction of a 2,081-linear-meter dock, a container yard, offices and warehouse facilities within a 120-hectare area owned by the Panama Canal.

The Corozal Port will be constructed and operated under the “green port” model to:

  • Protect the community from harmful environmental impacts that may result from port operations;
  • Reduce greenhouse gas emissions and other emissions from port operations;
  • Use the best technology available to prevent or reduce environmental impact;
  • Promote sustainability; Position the port as a leader in environmental management and compliance;
  • Implement sustainable practices in the design, construction, operation and business processes in the port;
  • Improve environmental performance of port structures while maximizing long-term economic benefits.

Taking into account these principles, the terminal considers the use of electrical equipment to reduce CO2 emissions from port equipment, as well as the use of leading edge technology to supply electric power to vessels, resulting in reduced CO2 emissions produced by ships while at berth.

 

The views presented hereabove are only those of the author and not necessarily those of GREEN4SEA and are for information sharing and discussion purposes only.

About Alexis Rodriguez

Alexis Rodriguez is  the Panama Canal’s Environmental Protection Specialist. The Panama Canal is run by an autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the Panama Canal Authority (ACP) is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the ACP’s website: http://www.pancanal.com o

 

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