Green procurement in shipping means the inclusion of requirements relating to low- or zero-emission transport in public procurement processes. By using their purchasing power to choose assets, services and works with a lower environmental impact, governments can support decarbonisation of domestic shipping that can have important spillover effects for international sea transport.
Green procurement in shipping may include:
- The purchase of energy efficient vessels (construction and retrofits) for use at sea and on inland waterways, including public transport vessels, such as ferries, research vessels, patrol and surveillance boats, etc.
- The procurement of services (public service obligations) or public works in which vessels are used, such as dredging activities, passenger and goods transport, tugboats, etc., by applying award criteria based on sustainability.
The main lever of green procurement are contract award criteria that are weighted in a way that consider lower environmental impacts as the (or one of the) key criteria. For example, these criteria can refer to compliance with a specific environmental standard or the amount of greenhouse gas emitted.
Almost all ITF and OECD countries have developed strategies or policies to support green public procurement. Only very few focus explicitly on the shipping sector. For example, the Netherlands have guidelines for green vessel procurement in place. In Norway, the rapid phase-in of ferries with electric propulsion systems has been driven by requirements included in public procurement processes.
Fully electric vessels generate almost zero greenhouse gases, provided that electricity is generated carbon-free and lifecycle emissions of vessel technology are kept low.
The public procurement procedure for the maritime connection between Stockholm and Gotland incorporated greenhouse gas emissions. In combination with the 10-year duration of the contract, this facilitated the order of LNG-powered vessels by Rederi Gotland AB that may decrease CO2 emissions by around 20%.
Newbuild capital costs for low- or zero-emission vessels are significantly higher than standard vessels running on heavy fuel oil. Additional capital and operating costs depend on ship size and type.
The use of modern electric or hybrid-electric ships mean a larger up-front investment (more expensive technology and type approvals), but lower operating costs due to reduced fuel costs, higher levels of automation and less maintenance. Siemens Denmark concludes that 7 out of 10 Danish ferry routes would become more profitable if electrified. Contracts focusing on operating rather than upfront costs would automatically favour electric solutions.
Low- or zero-emission ships and their operation become more cost competitive with electricity tax exemptions (e.g. in Sweden) and a price on carbon.
Adoption of electric ferries in passenger transport includes investments into onshore power supply (OPS). OPS in ports cost USD 5-10 million per installation, mainly related to extending the grid into ports.
Decarbonisation of national shipping activities can generate spillovers to fleets that operate internationally and can provide an important arena for piloting and developing zero-emission technologies and their associated infrastructure.
Co-benefits of electric ships include the reduction of air pollution. Electric ships produce less noise and vibration. Batteries that have reached their lifetime on vessels can be reused in onshore industries.
Green procurement may have additional environmental benefits beside reducing greenhouse gas emissions. Other award criteria can include requirements for sustainable wastewater management, non-toxicity of oils or greases used, antifouling, exclusion of certain hazardous substances, engines conforming with a higher emissions standard, onshore power connection, etc.
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