Baltic port outlook for 2021 and the European Green Deal discussed by the BPO Board

Mar 19 2021

Baltic port outlook for 2021 and the European Green Deal discussed by the BPO Board

The Baltic Ports Organization (BPO) board met yesterday, during an online meeting. Topics discussed included last year’s results achieved by the Baltic ports and the possible outlook for 2021. Also on the agenda was the impact of the European Green Deal (EGD) on the port market in Europe and the Baltic Sea region (BSR).

According to the Port Monitor report, prepared by Actia Forum, the ten biggest Baltic ports handled a total of nearly 450m tonnes in 2020. This translates to a drop of 5.6% in comparison to 2019. On the container side of things, the top 10 Baltic container ports registered a total throughput of 8.8m TEUs. Similarly as was the case with total cargo handling, this meant a drop of 4.7% in comparison to the last year. It won’t surprise anyone, that passenger traffic, including cruise traffic, suffered most due to the ongoing development of the COVID-19 pandemic.

Despite these difficulties, nearly all of the Baltic ports had a very good start into 2021 in terms of cargo. The majority of ports in question noted positive results, with some registering an increase of approx. 10% in the months of January and February in comparison to the same period in 2020. As such, the outlook for the upcoming months is a positive one, with the exception of the passenger market, which remains uncertain. It will be highly dependent on the loosening or strengthening of the travel restrictions implemented by the national governments around the world.

The board meeting, attended by representatives of all BPO’s member ports, also included a closer look at the impact the EGD had and will continue to have on the port market in the BSR and Europe. It is mainly tied to the greenhouse gas (GHG) reduction goals set by the EU, which foresee eliminating GHG emissions by 2050. First step on this path will be the recently approved target of reducing GHG emissions by at least 55% by 2030 compared to 1990 levels.

It is the goal for the European economy to become independent of fossil fuels, including gas, that may have the biggest influence on the future role of the ports. As the fossil fuel (coal, oil, gas) usage continues to drop in the coming decades, ports will become important logistics and production hubs for renewable energy, such as wind and solar energy. The usage of other alternative fuels in ports, such as bio-gas, hydrogen and ammonia is also set to increase.

Bogdan Ołdakowski, Secretary General, BPO, said, “The continuous switch from fossil fuels to renewable energy sources will have a decisive impact on the economic structure not only in the EU, but worldwide. It will most certainly affect international trade, especially considering, that the mission to reduce harmful emissions, such as greenhouse gasses, isn’t solely a European one.”

Ports can and will play a key supporting role in this transition, since they are directly impacted by emissions from the shipping industry, which in most cases present the main source of air pollution in the port area. Possible solutions, already being implemented with increasing success in the Baltic, include the development of shore power facilities and a bunkering infrastructure for alternative fuels, which could play an important part in the transition period (LNG). Furthermore, they can become production centers for solar and wind energy, bringing them closer to the role of energy hubs.

More information about the above will be featured in the upcoming BPO report, titled “Impact of the European Green Deal and the Paris Agreement on the port sector in the next decades”, to be published in Q3 2021.

Last but not least, the participants also discussed this year’s edition of the annual Baltic Ports Conference, which will take place in September, 2021. Depending on the situation, the event will be held as a hybrid conference or in a mostly online formula.