Latest BPO report analyzes the impact of climate policies and regulations on the port sector

The Baltic Ports Organization (BPO) has recently finalized a new report focusing on the influence of the European Green Deal (EGD) and various other climate-related policies and regulations on the future of the port sector. The report will be made available per request upon contact with the BPO Secretariat.

Focusing first and foremost on the Baltic seaports, the report analyzes said impact taking several aspects into consideration. The EGD and the recently introduced Fit for 55 package influence, and will continue to do so, numerous areas relevant to the port sector, such as the cargo structure, role of seaports in context of energy transition towards renewable energy, development of refueling infrastructure for unconventional ship fuels, as well as strategies and tools for reducing emissions with the goal of climate neutrality.

Within the report, readers will find numerous examples from seaports around the Baltic Sea region (BSR), presenting their activity and implemented procedures, related to the areas mentioned above.
The report also includes a handy overview of relevant policies on both international level (dating back to the 1991 Rio Convention) and EU level, with a rundown of the current key targets set by the policymakers.

Main findings

EU’s climate policy will have a major impact on a broad range of industries in the decades to come, especially in view of the planned energy transformation and associated shifts in trade paths and growing significance of renewable energy sources. These changes will present new opportunities for the port sector, but also bring along various challenges.
The expected fall of fossil fuels’ share in primary energy consumption from ca. 70% (2018) to a projected 39% (2050), mainly crude oil and coal, will definitely have an effect on cargo handled in ports. While this process may progress at different pace and intensity in various countries and ports, those entities involved in handling of fossil fuels will need to seek new strategies and business opportunities in order to secure revenue in the future.

Gas, however, may follow another path, as opposed to oil or coal. Natural gas is expected to overtake oil as the largest primary energy source by 2030 and keep its market share at the level of approx. 27% within the European energy mix by 2050. Liquefied natural gas (LNG) is set to gain increased importance in the Baltic but also beyond in the next decades, also considering the recently introduced REPowerEU initiative. As of right now, the Baltic LNG market is only a decade old and still in its development stage.

Due to the expected, continuous increase in need for new, renewable energy sources, new investments in areas such as wind energy, especially the offshore sector, will create demand for large port installation bases and small terminals for operational and maintenance functions, thus presenting new opportunities for ports.
Overall, climate policy driven change will stimulate investments in the whole energy value chain and ports will have an important role to play – be it production, storage or function as energy hubs and logistic distribution centers.

A far more in-depth analysis can be found in the full report, available per request upon contacting the BPO Secretariat at bpo.office@actiaforum.pl. We encourage all our subscribers to get in touch with us!

Please note: The report was finalized in March 2022, shortly after the outbreak of war in the Ukraine towards February 2022. The geopolitical impact of the conflict has had significant immediate and long-term impact on energy security policies, as well as global energy markets. This effect has not been analyzed. However, some consequences have been signalized in the report’s conclusions.