California Can Lead the World to Reduce Emissions from Ocean Cargo Ships, Lower Climate Impacts, and Improve Air Quality around Ports

(Berkeley Public Policy The Goldman School) Two reports co-released today by Goldman School of Public Policy, University of California Berkeley and Energy & Environmental Research Associates delve into policy changes and technology to decarbonize ocean going vessels. Non-profit Pacific Environment commissioned these reports.

This set of reports seeks to inform stakeholders and policymakers on potential to reduce greenhouse gas (GHG) and other air pollutants from the maritime sector. These reports describe:

California has historically led the world in air pollution and greenhouse gas control measures, and has modeled policy initiatives for other states, and national and international governments. In 1988, California Air Resources Board CARB set limits on sulfur and other contents of diesel fuel to reduce criteria pollutants from motor vehicles. By 2008, CARB adopted a regulation to mandate the use of low sulfur marine distillate fuels, applicable to all vessels within 24 nautical miles of the California coast. Its 2014 Ocean-Going Vessel At Berth regulation, applicable to container and cruise vessels, was expanded in 2023 to require use of shore power, or other emissions control strategies at California ports for all major vessel types. The expansion of the At Berth Regulation is estimated to lead to over $2.2 billion dollars in health benefits.

The Ports of Los Angeles and Long Beach are the busiest seaports in the Western Hemisphere and the busiest container ports in the U.S. (San Pedro Bay ports). These and other California ports handle about 40% of containerized imports into the U.S. and 30% of all U.S. containerized exports. Due to the concentrated emissions and impact on air quality from vessels, vehicles, and equipment, CARB estimated that activities at the San Pedro Bay ports have resulted in an average of 67 premature deaths and over 2,000 cases of harm to lower respiratory systems per year in the region.

REPORT AUTHOR STATEMENTS

“The federal and state governments, including California, need to accelerate efforts to transition ships and ports toward a zero-emission future. We hope that California will strengthen its policies to reduce emissions from ships. This will increase momentum for action by the US EPA and the International Maritime Organization. We call on California to gradually transition ships operating in its waters to zero or near zero emission fuels,” said David Wooley, Director of the Environmental Center, Goldman School of Public Policy, University of California, Berkeley.

“California has a unique opportunity to accelerate control of greenhouse gas and criteria pollutant emissions from ships. This report highlights rapid development in the low and zero-GHG maritime fuels industry and identifies pathways to safe and efficient zero- and low-emission ships on the waters,” said Edward Carr, Vice President of Operations, Energy & Environmental Research Associates.

PACIFIC ENVIRONMENT STATEMENT

“These co-released reports show that technologies are available to accelerate this transition and highlight the rising tide of decarbonization policies and regulations. We call on the State of California and the federal government to be climate leaders on marine air pollution and to adopt the Reports’ policy recommendations needed to decarbonize shipping by 2040,” said Jamie Yates, Climate & Renewable Energy Analyst, Pacific Environment.

POLICY RECOMMENDATIONS

U.S. national and state governments will need to play a key role in decisions on clean maritime fuel supply chains and infrastructure. California is uniquely influential. California was the first to require low sulfur fuel and emission controls for ships, action that later inspired international and national emission controls. It can play that catalytic role again by signaling intent to regulate GHG emissions of ships, either: 1 to implement strong international controls; or, 2 to adopt controls and incentives applicable to shipping and low carbon fuel production in California if international negotiations fall short.

For example, California policy leadership could increase momentum for strong regulation by the International Maritime Organization, which is currently debating measures to implement its 2023 zero carbon target for shipping by 2050. In absence of strong IMO action, California can reduce emissions from ships operating in its coastal waters. Such action would complement and, in effect, extend the geographic scope of recent European Union policies to reduce GHG emissions from ships calling at EU ports.

California can also create financial incentives for production and use of zero or near-zero carbon maritime fuels through Low Carbon Fuel Standards. There is currently no zero carbon fuels suitable for large ships produced on the West Coast of the US. This fuel supply infrastructure is critical to the success of global voluntary and mandatory commitments to zero carbon ship operations.

FINDINGS

The EERA report provides a technology review of low and zero-greenhouse gas marine fuels and supplemental power systems. The report describes decarbonization potential, costs, technology parameters, safety, and infrastructure. The report includes a novel analysis of growth in green fueled fleets and shows the significant potential for sustainable marine fuels.

Among the report’s findings, the orderbook data for end of Q4 show that the number of methanol-fueled and methanol-ready vessels is set to increase by 6.8 times, reaching around 285 vessels within the next five years. Ammonia-ready vessels are set to increase by 4.5 times, totaling around 200 vessels over the same time period. Other low-GHG vessel technologies like hydrogen fuel cells, battery power and assist, and solar and wind propulsion are also growing rapidly, indicating a shift towards early uptake of these technologies.

The report outlines a promising three-stage transition towards net zero emissions in the maritime section, highlighting the role methanol and ammonia may play as hydrogen carriers. While there are sizable gaps between maritime energy demand and projected production, the volumes of low- and zero-GHG fuels are anticipated to increase rapidly, with vessels ready and being built today that can use these fuels. California is uniquely positioned with strong renewable energy generation and regional Hydrogen Hub developments to become a leader in green hydrogen production as demand is likely to sharply increase over the next five to 15 years and shipping moves to zero and near-zero emission fuels by 2040. READ MORE