Keywords

1 Introduction

With the national strategies of carbon peak and neutrality ambitions, challenging targets have been imposed on the transport sector, which is bound to transform towards a green and low-carbon trajectory. The waterway transportation, a pillar with emissions accouting for around 6.5% of the sectoral total (Li et al. 2021), will face an increasing demand with the continuous system optimization transferring bulk goods and mid-and-long-haul movements of goods ‘from road to waterway’ (Ministry of Transport of the People’s Republic of China, 2021).

Waterway emissions mainly stem from vessels and ports. Chinese transport vessels, which are of large in volume, high in mobility and difficulty in management, mainly consume diesel and fuel oil. Despite generating less emissions than ships, ports must endeavor towards the same direction given its natural connections to the hinterland and maritime transport (Li 2021). Decarbonizing the waterway transport is a large undertaking with considerable implications and difficulties, thus requiring systematic and sophisticated research. While there have been studies analyzing the status quo of waterway emissions in China as well as the main challenges and solutions towards a less carbon-intensive waterway transportation (Hou 2017; Zheng et al. 2020; Ma et al. 2020), there is yet a comprehensive analysis on the technical and policy roadmap for its low-carbon development.

Taking Sichuan province as the subject, In the context of the ‘dual carbon’ goals, the study proposes a conceptual framework for the low-carbon development pathway of water transport by analyzing the technical roadmap and policy recommendations for the Sichuan province, and establishes a scientific baseline for the provincial measures towards carbon ambitions during the 14th Five Year Plan (2021–2025).

2 Research Scope

Located upstream of the golden waterway of the Yangtze River, Sichuan province is one of the key regions for inland waterway transportation, boasting strategic significance in the Yangtze River Economic Belt. The national strategy of “Yangtze Belt Powered by Golden Waterway” has brought unprecedented opportunities for the water transportation of Sichuan (Zhai 2014), a province with abundant resources including 4 high-grade waterways (Yangtze, Min, Jialing and Qu rivers) and numerous watercourses of other grades such as Tuo, Fu, Jinsha and Chishui, as well as exceptional shoreline resources and untapped potential (The People’s Government of Sichuan Province 2012).

By 2020, Sichuan Province had 10,900 km of waterways, 4,718 transport vessels and 18 planned ports with 1,558 berths. In 2020, Sichuan’s waterborne passenger traffic reached 9.54 million with a turnover of 104 million passenger kilometers, waterborne freight traffic 65.27 million tonnes with a turnover of 29.176 billion tonne-kilometers, port throughput 13.6 million tonnes and the annual container throughput 274,175 TEU (National Bureau of Statistics Zhai 2021). By 2020, the Sichuan Province had already embarked on its green journey including the introduction of 80 electric vessels for short-haul passenger transport, 15 sets of shore power facilities at 15 berths in Luzhou, Yibin and Nanchong ports, as well as over 80% of the province’s official vessles using shore power at berth.

The 14th Five-Year Plan (2021–2025) for Comprehensive Transport Development in Sichuan Province stipulates that by 2025, the share of waterway transport in cargo turnover shall increase by 5 percentage points and CO2 emissions per unit of transport turnover of operating vessels decrease by 5% (The People’s Government of Sichuan Province 2021). Therefore, it is imperative for the provincial waterways to accelerate its green and low-carbon transformation.

Taking the ports and shipping of Sichuan as the subject, the study conducts an analysis of the technical roadmap and policy recommendations, addressing the direct CO2 emissions from fossil fuel consumption by ships, cargo loading/unloading, and auxiliary operations at ports. Through an analysis of the key factors determining the low-carbon development of the waterway sector, the study reviews the technical roadmap from the perspectives of both energy efficiency and substitution, and provides policy recommendations on CO2 emissions measurement, energy consumption monitoring, market mechanism, R&D (Research and Development) on low-carbon technologies, etc.

3 Key Factors of the Low-Carbon Water Transport Sector

The activity level of vessels and ports, mostly driven by regional demands, will remain an upward trend in large parts of China. For example, in 2021, China completed 15.55 billion tonnes of port cargo throughput with an increase of 6.8% year-on-year (Financial sector 2022), Sichuan province 20.44 million tonnes with a 50.29% bump (China Waterway Network 2022), Pearl River system 1.879 billion tonnes (China News Network 2022), and Ningbo-Zhoushan Port 1.224 billion tons, up 4.4% year-on-year, ranking the first in the world for the 13th consecutive year (Xin Min Evening News 2022).

The status quo analysis of the the water transport sector indicates that the low-carbon process may zero in on reducing emissions in the recent future. Table 1 shows the sectoral carbon emissions by transportation modes, and the formula variables already contain prospective approaches applicable to both ports and shipping including decreasing activity levels and unit energy consumption as well as using energy sources of lower emission factors.

At present, low-carbon shipping solutions concentrate on energy efficiency and cleaner fuels, which could also consider green marine engines and CCUS (Carbon capture, utilisation and storage) in the future. For example, improve energy efficiency in management and operations, adopt applications for less resistance and more propulsion, and prioritize cleaner ship fuels such as LNG, methanol, biodiesel, hydrogen and ammonia (China Classification Society 2021). The key to low-carbon port development involves production equipment, mobile machinery and other energy-consuming components, and mainly depends on energy substitution and efficiency improvement technologies, which are represented by process technologies and loading/unloading equipment powered by electricity or other clean energy, capacity matching as well as optimized energy efficiency and consumption during loading and unloading operations, facility upgrading by phasing out energy-and-emission-intensive and inefficient equipment (Hou 2017). Low-carbon development measures shall be tailored to the current and future specificalities of ports and shipping in the Sichuan province. The technology roadmap for this research is shown in Fig. 1.

Table 1. Calculation methods for carbon emissions by mode of waterborne transport
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Fig. 1.
figure 1

Technology roadmap for this research.

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4 Technical Options for Low Carbon Development of the Water Transport Industry in Sichuan Province

4.1 Energy Efficiency Improvement

Vessels

Vessels’ energy efficiency could be improved at design stage and/or operation stage. Energy Efficiency Design Index (EEDI) of a vessel, which is defined by IMO’s guidance, is an estimate of CO2 emissions per freight volume in the stage of the vessel’s specific design. Optimization of the propulsion system, hull form and additional drag reduction technologies are effective measures to improve EEDI. Energy Efficiency Operational Indicator (EEOI) is an indicator expressing the energy efficiency of the ship currently in service, which is significantly influenced by ship operations (including sailing speed, route and trimming). Lowering the speed is considered to be the most effective means to improve energy efficiency, reducing fuel consumption up to 60%, indicating a close linkage between vessel speed and fuel consumption. However, speed reduction is often subject to sailing conditions and the time sensitivity of shipping orders. Meanwhile, route optimization is a comprehensive solution that could decrease the total fuel consumption by planning optimal paths and taking into account wind currents (i.e. the shortest distance and voyage).

However, the obsolete vessels in the Chinese inland waterway transport fleet remain a major challenge. Given the fact that the Sichuan fleet is mostly dry bulk carriers and aging vessels for short-distance transshipment, and that the main navigable waterways in the province are of lower grades and varying levels, neither configuration modification nor operational optimization is optimal. Considering the present and future development of the Sichuan fleet, fleet renewal is generally recommended for better energy efficiency, replacing outdated vessels with new ones that are designed and built in accordance with the energy efficiency standards based on the latest technical specifications.

Ports

The energy efficiency of the port is reflected by energy consumption per unit of throughput. Generally speaking, substandard loading, unloading, storage and transfer of cargo may complicate or obstruct the operational processes, thus increasing the energy consumption of port activities. Therefore, terminal-specific optimization is particularly significant to improve the coordination, capacity-matching and efficiency of port operations.

Ports in Sichuan face challenges in terms of unbalanced geographical distribution and functional structure, inadequate infrastructure and supply capacity, and mismatched costs and benefits, painting a picture of ‘small, weak and scattered’. Port modernization in Sichuan started fairly late with only 11% of modernization rate (Yu 2021) and 6 ports above designated scale, two of which (Luzhou Port and Yibin Port) are major ports along the Yangtze River. At present, besides the port groups of Luzhou-Yibin-Leshan in the southern economic zone, the northeastern Guangyuan-Nanchong-Guangan, and part of the Liangshan Port in the Panzhihua-Xichang region, other ports, mostly built upon natural slopes, still mainly transport sand and gravel without modern and scale-appropriate machinery.

Therefore, horizontal transportation for dry bulk cargo terminals can shift away from oil-powered to electricity-powered processes. General cargo terminals could apply suitable energy-efficient technologies to dry bulk cargo and breakbulk, and level up automation for the handling of containers or dry bulk in applicable terminals. From a local perspective, modernize the handling equipment and vehicles with higher energy efficiency. In the meantime, lower the equipment energy consumption through energy recovery of loading and unloading machinery and energy-saving renovation of power facilities.

The 5G smart port construction project in Zhicheng terminal of Yibin Port has been officially started. As the first 5G smart port project in Sichuan Province, it is an ideal pilot project for automatic and intelligent approach for low-carbon development.

In addition, the application of smart technologies is also recommended, which elevates operational accuracy and efficiency while reducing unit energy consumption. The Zhicheng 5G terminal in Yibin, as the first 5G smart port in Sichuan, serves as a blueprint for future demonstration projects.

4.2 Energy Substitution

Vessels

Research and practices worldwide have shown that there is yet a global consensus on the energy substitution in the realm of waterway transportation (Horvath et al. 2018; Brahim et al. 2019; The Oxford Institute for Energy Studies 2019; KPMG Germny 2021; Xu 2020; Huang 2021). The application of alternative fuels will likely be driven by regulations of international bodies, fuel prices, technological developments, availability of alternative fuels and development of infrastructure. Despite the consensus on the significance of electricity and hydrogen in achieving carbon neutrality, relevant technological means remain uncertain in terms of readiness, and never-ending debates still terrorize alternative fuels such as LNG, ammonia, methanol and biogas. The global LNG industry, despite a huge expansion of capacity with final investment decisions on projects potentially in excess of 100 bcm in 2019 and 2020, faces affordability and decarburization challenges for some reasons. Consider that ammonia is of high kindling point, low flame speed, low flammability limit, high heat of evaporation and produces nitrogen oxide emissions when used as fuel. Methanol, mainly extracted from coal and natural gas, is not a low carbon option according to the law of conservation of energy.

The Sichuan province, a key national base for clean energy and a national flagship on clean energy demonstration, has been committed to the implementation of Outline of Clean Energy Development Strategy. In 2020, the natural gas production in Sichuan Province reached 43.2 billion cubic meters, ranking first in the country, with an increase of 14% or 5.2 billion cubic meters year-on-year, accounting for 45% of the yearly incremental growth. Meanwhile, the abundance of hydropower resources implies the province’s tremendous potential in “clean electricity”. Recently, Sichuan and Chongqing are co-developing hydrogen economy, which has already produced the Chengdu-Chongqing hydrogen corridor for hydrogen vehicles, translating into favorable conditions for furthering the energy mix optimization of Sichuan’s water transportation.

Considering the hydrogen endowment of Sichuan, LNG could be the transition fuel in the fleet renewal to achieve short-term carbon reduction. As electric and hydrogen power solutions mature up, new vessels can be fitted with cleaner engines, new container liners with chemical or hydrogen fuel cells, and local liner ships with hydrogen power system. However, Sichuan’s lacking of LNG refuelling station is restricting the potential of LNG vessels. Therefore, it is urgent to redouble efforts in LNG terminals and LNG-powered vessels. Moreover, other measures such as green and environmentally-friendly technologies should also be included in waterways programs.

Ports

The energy consumption of port operations, relying on trucks, front cranes, single bucket loaders, excavators, tractors, etc., features mainly oil and electricity; Therefore, cleaning up the power of port machineries is instrumental to optimize fuel consumption at ports. At present, there are three container terminals (Luzhou, Yibin, and Nanchong) in the province that have achieved electrification. It is recommended to advance electrification of port equipment and LNG solutions for horizontal transport vehicles, which then gradually transition to battery and hydrogen power systems in the future. Self-sufficiency of wind and PV (Photovoltaic Power) is another stepping stone to achieve the two carbon goals. Advantaged ports can adopt an energy system of “distributed PV + energy storage + micro-grid”, combined with smaller wind turbines and ground/air-sourced heat pumps to enable two-way power flow between the port and the grid.

Vessel-port coordination is important in the energy substitution process of the waterway transport sector, considering new vessel power such as shore power, LNG and hydrogen are based on the port. In accordance with relevant regulations and measures (The Standing Committee of the 13th National People’s Congress 2020; Ministry of Transport of the People’s Republic of China 2021), the renovation of receiving facilities of the shore power system shall be promoted with a focus on container ships, multi-purpose ships and dry bulk carriers of 600 GT and above. Meanwhile, increase the utilization rate of shore power facilities. In addition, build LNG terminals in the upstream of major waterways such as the Jialing River and Minjiang River, and provide LNG in the service areas of the waterways should be taken into consideration. Meanwhile, ports can also make preparations for vessel charging, battery swap and hydrogen refueling in advance.

5 Policy Recommendations

The central government has clearly pledged to enhance the policy environment for investment, green finance, fiscal and pricing framework, as well as the market mechanism. The Sichuan government can maximize the synergy of “government guidance + enterprise responsibility + market support + partnership” from the provincial baseline of the waterborne transportation. In the meantime, it should strengthen organizational leadership, coordination, accountability, supervision and review (The State Council the People’s Republic of China 2021).

Firstly, tighten the grip on vessels and ports, reducing fuel consumption and emissions per unit to fulfill the latest standards. Conduct regular emission assessments to reflect the effectiveness of the decarbonizing efforts in order to make policy adjustments accordingly. It is recommendable to consider pilot projects on new energy vessels and zero carbon ports. The Sichuan Province Five-Year Action Plan to Promote Green Water, Green Navigation and Green Development strives to build two zero-carbon demonstration sites by 2025 where operations and facilities including HVAC will be powered by clean energy within the port area (Department of Transportation of Sichuan Province 2021).

Secondly, develop an energy efficiency improvement plan on the basis of a comprehensive survey on the fleet’s energy efficiency, outlining the timetable for vessel renewal and introducing the energy efficiency standards. Establish a supervision system for ship pollution aligned with the vessel pollution regulation, the inland vessel energy consumption collection and reporting framework of the Yangtze River, as well as the intelligent supervision solution for sand and gravel vessels in Sichuan. Additionally, establish a life-cycle tracking and reporting system for port emissions based on energy usage records and statistics.

Thirdly, encourage the private sector to diversify funding sources, utilize the provincial emissions trading mechanism, and accelerate the establishment of the climate change investment and financing center. The Sichuan Joint Environmental Exchange is the first carbon emissions trading market outside the national pilot program in China. By the end of October 2020, the Sichuan Exchange had traded a total of 15,728,200 tonnes of voluntary greenhouse gas emission reductions (CCERs) with the unilateral transaction amount exceeding RMB 100 million. The government should provide informed guidance based on research on participating ports and vessels.

Fourthly, increase interconnection with the Chongqing Port while a shipping center in the Yangtze upper reach is being contemplated with aligned regulation, enforcement, execution, standards, as well as reward and penalty policies. Scale up low-carbon technologies in vessels by partnering up with ports in the middle and lower reaches of the Yangtze River. At the same time, competent authorities should provide platforms for scientific research and pilot projects for technology breakthroughs, which are often too complex and challenging for one actor to attain independently, so the government could weigh in as a coordinator and facilitator of cooperation. Sichuan Province boasts a solid foundation for R&D, and Chengdu has recently proposed to build a state-level key science and technology center. Such abundance of resources in science, technology and industrial application could further contribute to the low-carbon transformation of its water transport sector.

6 Conclusions and Prospect

In the context of the dual carbon goals, it is imperative for the water transport industry in Sichuan Province to accelerate its green and low-carbon transition. This study proposes a conceptual framework for a low-carbon development pathway for water transport with an analysis of technical roadmap and policy recommendations based on the current and future landscape of its ports and vessels. Sichuan can rely upon energy efficiency and energy substitution on the technical front, while upon the synergy of “government guidance + enterprise responsibility + market support + partnership”. While focusing on slowing the growth of CO2 emissions and energy efficiency with LNG as the main transition fuel in the near term, Sichuan should curb the total emissions through improved emissions monitoring and assessment, vessel fleet renewal, pilot projects on carbon-neutral ports while strategize around carbon-free solutions including electricity and hydrogen in the long term. Meanwhile, leverage the carbon trade and green finance in decarbonizing the sector.

For end-of-pipe treatment in waterway transportation, CCUS is not addressed in this research as the technology is far from application, which shall be considered based on a cost-benefit assessment of space and performance once it achieves maturity. Besides, it is recommended that new waterways, ports and terminals should maximize carbon sink in the landscaping phase, as well as ecological restoration and sponge capabilities.