Carbon emission reduction in port operations: an interview with Eom Ikhwan

Beyond carbon emissions created on land, a significant amount is also emitted in the sea. Port operations are at the heart of global trade, driving economic growth by facilitating international supply chains, yet is a major carbon emitter. In Korea, the Ministry of Oceans and Fisheries has incorporated numerous projects to reduce carbon emissions to abide by the newly introduced NDC goal. Eom Ikhwan, the Ministry's Director of Port Logistics Planning, shared insight to the promising carbon emission reduction projects in Korean ports.

Could you share the role or direction of the Ministry of Oceans and Fisheries in achieving the government's carbon neutrality scenario?

Last week, the Cabinet meeting announced the government's education plan and the 2035 NDC targets. South Korea emitted 742.3 million tons of CO2 equivalent in 2018. The newly announced goal is to reduce this by 53 to 61% by 2035. Subsequently, the Ministry of Oceans and Fisheries also set and announced reduction targets for the maritime and fisheries sector. 

Among these ship-based transports, there are those within our coastal waters. Emissions from these sources totaled about 1 million tons annually as of 2018. Then there are the vessels used in the fisheries sector, like fishing boats. Emissions from fishing vessels and aquaculture farms amounted to about 3 million tons. Compared to the initial announcement, the target for the fisheries sector has changed slightly. The initial target was to reduce 70% of the 4 million tons, but now the target is to reduce 60% of the 5 million tons. The overall reduction target has decreased, but the actual amount of emissions being cut has increased. 

Port emissions aren't captured in official statistics because emissions directly from the ports themselves were only about 300,000 tons of carbon annually. Compared to the national total of 740 million tons mentioned earlier, this scale is so significantly smaller that it wasn't being counted. Structurally, ports handle cargo from ships that arrive loaded with goods, so a significant amount of carbon emissions originated from the ships themselves, while the port's own emissions primarily came from the machinery operating within the port. So, even though this carbon emission is 300,000 tons, it's not a small amount. 

When cargo enters Korea by ship, once the ship docks at the port berth, there's a primary container crane that moves the containers from the ship onto land. This primary crane is called a container crane. Once the cargo is on land, another type of crane called a transfer crane moves it to the opposite side of the port where regular trucks can load it for transport. Then, there's the tractor that moves the cargo. These three elements make up the system and were traditionally powered by diesel engines. Diesel engines emit a lot of carbon, and since the port itself also generates significant fine dust, starting in 2015, the Ministry of Oceans and Fisheries implemented a project to convert the propulsion power of the equipment operating within the port from diesel to LNG.

This project ran for 10 years, and now most equipment has been switched from diesel to LNG. However, LNG is also a propulsion source that emits carbon. Therefore, we are now undertaking the work to replace this LNG with electricity. So starting this year, we're replacing new equipment with electric power. This is one of the support policies recently implemented for carbon reduction activities at ports.

However, one of the biggest risks with electric propulsion is that if the batteries suddenly run out of power, there's no way to recharge them at sea. Because this risk is so significant, ships are still debating what new propulsion systems to adopt. For example, should they transition from diesel to methanol propulsion, or perhaps hydrogen propulsion? These are topics currently under discussion at the International Maritime Organization (IMO). 

When ships enter port, they can use electricity within the port area. Even when ships are docked, crew members are still on board. and the cargo, especially refrigerated or frozen goods, requires continuous power supply to maintain temperature. To address this, instead of using diesel engines, ports are installing shore-based power supply systems to provide electricity from land, thereby reducing carbon emissions.

So, it seems the Port Logistics Planning Division is making various efforts toward carbon neutrality. Do you think the overall Ministry of Oceans and Fisheries is significantly increasing its efforts for carbon neutrality over time?

Yes. As I mentioned earlier, when we first established our NDC in 2020, we set targets for activities like reducing carbon emissions from ships in the maritime sector and initiatives in fisheries. Now, since we're raising those targets beyond the initial goals, we are expanding carbon emission reduction across the entire maritime sector, not just ports.

For fishing vessels, you often see really old boats along the coast, right? So for fishing vessels too, we're scrapping all the very old, outdated ships and replacing them with more high-efficiency fishing vessels through projects similar to ones converting cargo engines from diesel to LNG.

For aquaculture farms, it's not just done at sea but also on land. For land-based aquaculture, providing more support for temperature maintenance equipment can help. For example, previously, to raise temperatures, they used boilers fueled by coal or oil. These boilers are part of heat exchange facilities, so supporting equipment that improves boiler efficiency can actually reduce carbon emissions. We are providing significant support for such initiatives.

In the fisheries and aquaculture sector, a distinctive feature is that while the sector itself reduces emissions, it also plays a role by planting aquatic plants in the sea to absorb carbon. These are salt marsh plants, for instance. We create coastal wetlands or marine forests to enable these aquatic plants to absorb carbon. Additionally, we are currently promoting projects to expand the adoption of renewable energy sources like wave power generation or tidal power generation in the ocean. In this way, we are focusing our policies on reducing carbon emissions while simultaneously expanding the adoption of renewable energy.

Regarding renewable energy, do you have plans to expand its use in port logistics as well?

Yes, to address that, I first need to explain the structure of our nation's ports. If you occasionally read news about Korea, you'll notice that when discussing export performance, photos of container ports often appear. That's because 99.7% of the cargo entering Korea, and 99.7% of import/export cargo, is transported by ship. Among those ships, the goods we use daily are mostly transported in containers. Over 70% of those containers enter through Busan Port. Busan Port has the New Busan Port, and they are now newly constructing Jinhae New Port, adjacent to it.

The plan is to install renewable energy sources there, developing and deploying wind power devices on structures like breakwaters. From 2045 until its operational launch in 2050, the plan is to supply all energy entirely through renewable sources. Consequently, beyond the offshore wind turbines mentioned earlier, we are exploring various concepts to install renewable energy systems in a more integrated and complex manner.

It seems you're making tremendous efforts to achieve carbon neutrality through diverse methods. Especially for ports, where trade exchange is inherently essential, reducing carbon emissions seems even more critical. Given the significent volume of containers exchanged and the high level of shipping activity, are there particular challenges in achieving carbon neutrality?

As you mentioned, speaking specifically about the current situation in our country's ports, let me explain the perspective of the ports themselves. For instance, the Busan New Port was constructed starting in 2001, but it only began actual operations in 2006. That's over 20 years ago, so the port equipment has become outdated.

For instance, replacing the primary crane that transfers cargo from ships to land with an electric automated system costs about 30 billion won per unit. The second crane, which moves cargo from land to the port area, costs about 8 billion won each. The smaller third tractor units cost about 200 million won each. Now, how many of these are there? At a single port terminal, there are at least 10 primary cranes, 10 units each, followed by about 40 secondary cranes, and then around 200 tractors. So, from the perspective of the companies operating them, there's a burden regarding how to secure the funding for these costs.

Therefore, to alleviate this cost burden, the government is now playing a role through the Ministry of Oceans and Fisheries. Since companies face difficulties securing funds if they bear the burden alone, the government creates funds to enable companies to borrow money from government-operated investment financial institutions. Companies can then utilize these funds for investment. However, given the current challenges in Korea, such as high interest rates, a high exchange rate, and various other difficulties, companies are somewhat hesitant to invest.

What other areas does the Ministry of Oceans and Fisheries assist with to alleviate the financial burdens companies are facing?

As mentioned earlier, there's the method of creating funds. Secondly, when overseas shipping companies use our terminals, they must pay a portion of the terminal fees, right? Just like you pay a usage fee when using a bus terminal. We collect a portion of those terminal usage fees into a fund called the Port Modernization Fund. Then, instead of companies borrowing money directly from the government, when they borrow from commercial banks, we use that fund to subsidize a portion of their interest payments. That's another role we currently play. Now, this is also about the fund. Additionally, regarding the government's previously mentioned Track 3 tractors, when replacing them, the cost per unit is around 200 to 300 million won. So, when replacing them with electric ones, the government is now newly implementing a program where it subsidizes about half of the cost of the electric tractors, covering 50% of the expense.

Recently, this has been linked with carbon emission reduction and smart AI automation. As we replace equipment with eco-friendly alternatives, which are now smart by default, tasks previously done by people are increasingly handled by unmanned devices. This raises the issue of port workers losing their jobs. If this were left solely as a problem between companies and workers, it would create conflict. Therefore, the government has established a tripartite consultative body involving labor, management, and the government. This body collaboratively discusses how to prevent job losses while also implementing equipment upgrades.

There seems to be many factors to consider. Looking ahead to the future, what developments or goals would you like to see in logistics ports to achieve carbon neutrality?

You could consider it a comprehensive approach of what we discussed. Currently, we still have a lot of aging equipment over 20 years old, and the pace of transitioning to automated, carbon-free equipment feels a bit slower compared to other countries. The goal is to eventually replace all this with fully automated, eco-friendly equipment. Then, since port work is physically demanding labor, it's becoming increasingly difficult to find workers. Therefore, the goal is to create a structure where the port can remain competitive without requiring new workers to fill positions, meaning new labor doesn't need to be brought in. The government's target by 2050 is to achieve a fully automated port powered entirely by electricity generated from clean, renewable energy sources.