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The Port of Hong Kong

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Case Study: Hong Kong

The Port of Hong Kong has been a leading Asian seaport for more than a century and a top container port for more than three decades. Between 2001 and 2006, Hong Kong container throughput increased by 32 percent from 17.8 million to 23.5 million TEUs. Containerized cargo in Hong Kong now represents about 74 percent of Hong Kong’s total cargo throughput. In 2006, Hong Kong was the second largest container port in the world, although it is likely that it was surpassed by Shanghai in 2008. The port is served by 80 international shipping lines with over 450 container liner services per week to over 500 destinations worldwide. The port is managed by the Marine Department of the Hong Kong Special Administrative Region (SAR), the local government for the city.

Hong Kong is located in the Pearl River Delta, which includes other cities and container ports, including the Port of Shenzhen, the world’s fourth largest container port. Container traffic at Shenzhen has also steadily risen recently, to 18.5 million TEUs in 2006 compared with 5.0 million TEUs in 2001. Together, in 2006, the Hong Kong and Shenzhen ports accounted for 9.5 percent of global container volume, making the Pearl River Delta the largest container handling region in the world. Cargo throughput is expected to grow. A study commissioned by the Hong Kong Transport and Housing Bureau estimates that, by 2030, Hong Kong will handle between 39 and 43 million TEUs.

Air quality in the Hong Kong is generally poor and levels remain much higher than the World Health Organization’s air quality guidelines. Since 1990, emissions of all air pollutants have risen dramatically.

Sulfur dioxide and nitrogen oxides doubled and particulate matter showed over a 90 percent gain. In 2006, Civic Exchange, a nonprofit public policy research organization based in Hong Kong, published a report, Marine Emission Reduction Options for Hong Kong and the Pearl River Delta Region, which found that local vehicle and marine emissions are the dominant source of air pollution in Hong Kong during prevailing wind conditions that exist about one-third of the year.

Governments and other stakeholders in the maritime sector have already implemented some positive measures including the promotion of low sulfur fuel use by marine vessels and port vehicles, the use of electricity to power port machinery and the reduction of fuel consumption through efficiency measures. These measures in themselves have not been sufficient to reduce port emissions on a scale necessary to protect public health, but pressure to take more ambitious action is growing.

In February and March 2008, Civic Exchange sponsored two workshops for stakeholders involved in port environmental issues. The working group for the workshop included four stakeholder groups: oceangoing vessel operators, port operators, local craft harbor operators and land vessel operators involved in port activities. The stakeholder groups all endorsed government incentives to encourage green technologies and to pay the incremental cost of ultra low sulfur diesel fuel compared to lower grade conventional fuels. They also supported increased research and development of advanced technologies for marine applications, pursuit of shore power use by berthed ships and the creation of a low emission area subject to IMO regulations.

The recommendations of the working group were used by Civic Exchange in the development of its July 2008 report, Green Harbours: Hong and Shenzhen — Reducing Marine and Port Related Pollution. The report’s five key recommendations are as follows:

• In the short term: Foster greater regional collaboration across borders, port and marine sectors
• In the medium term: Develop a comprehensive green ports strategy and related policy measures to create the regulatory and planning framework for implementing green port policies
• Develop cleaner fuels initiatives to encourage the use and availability of cleaner fuels
• Expand training programs for industry employees to encourage proper equipment operation to ensure efficient operation
• Conduct additional port related research to identify new green port projects suitable for Hong Kong

Hong Kong is responding to the increased recognition of the role of port activities in the city’s environmental problems. In June 2008, Hong Kong ratified the MARPOL Annex VI marine fuel quality standards as a Special Administrative Region of China recognized at the IMO separately from the national government in Beijing, which had already ratified the agreement. It plans to go beyond the new IMO regulations by applying fuel quality standards to local shipping as well as international commerce
regulated by the IMO.

Emissions from ships in Hong Kong harbor are regulated by the Marine Department. Ships in the harbor now use 5,000 ppm sulfur fuel. The ferry system will start running a trial using 50 ppm sulfur fuel early next year. Assuming the results are positive, political leaders seem committed to continue its use in ferries, but not to expand it to other craft without the cooperation of other cities in the Pearl River Delta mooring local marine craft.

The Hong Kong Shipowners Association (HKSOA) was very active during the few years of debate before the MARPOL Annex VI Amendments were adopted in October 2008, says Arthur Bowring, Managing Director of the group. The HKSOA represents more than 100 shipping companies that own more than 1,100 ships. “Environment is our biggest single challenge,” adds Bowring, referring to shipowners.

The Environmental Protection Department (EPD) is the chief air pollution regulatory agency in Hong Kong for landside emission sources, including all types of motorized vehicles. “Marine emissions are a new issue for us,” notes W.C. Mok, Principal Environmental Protection Officer.206 There are currently no regulatory standards that apply to offroad cargo handling equipment at ports. Onroad trucks fueling in Hong Kong are required to buy diesel fuel containing only 10 ppm sulfur, but when refueling takes place across the border with mainland China, they are subject only to a 500 ppm sulfur cap. Since most trucks delivering containers to Hong Kong pick up their cargo at mainland factories, most diesel fuel burned in Hong Kong is the higher sulfur content grade.

The 10 ppm fuel is much more expensive, even with an exemption from sales taxes offered by Hong Kong. The EPD is currently studying the technical feasibility of using compressed or liquefied natural gas in heavy duty vehicles. It will examine the results in 2009. The EPD is also studying options to reduce air pollution from cargo handling equipment at container ports.

As government agencies assess regulatory options, several private container terminal operators are moving ahead to deploy hybrid electric rubber tire gantries (RTGs). Seventeen hybrid electric RTGs were deployed at Container Terminal 4 owned by Hong Kong International Terminals (HIT) in 2008. They are the first step in a $18 million (U.S. dollars) program to equip 81 RTGs with hybrid electric drivetrains, about 70 percent of HITs total fleet. The hybrid RTGs are fitted with lithium ion batteries that provide power to help lift containers. The batteries are recharged by regenerative braking energy generated during the lowering of containers and from a generator powered by the onboard diesel engine.

In October 2008, Modern Terminals Ltd. signed a contract with Kawatoyo Electric Company Ltd., the sole agent for Yaskawa Group Port Crane System, to convert 44 RTGs with hybrid electric drivetrains at its terminal in Hong Kong by mid-2009. The drivetrains are being developed by Yaskawa Electric Corporation. They use ultracapacitors as the onboard energy storage technology.

The Modern Terminals Da Chen Bay Terminal 1 at Shenzhen already uses hybrid electric RTGs. The terminal is the first to convert its entire RTG fleet to hybrid electric drivetrains. Modern Terminals associate company, Taicang International Container Terminal, is currently converting its fleet at the Port of Shanghai to hybrid electric RTGs.

In other programs at Shenzhen, Shekou Container Terminal (SCT) is installing auxiliary generators onboard its entire fleet of 78 RTGs by the end of 2010 at the port of Shekou. It is also installing rail mounted gantry cranes (RMGs), which are quieter, last longer, and are 20 percent more efficient than conventional RTGs. By the end of 2008, SCT plans to install 16 RMGs. Another initiative is studying the use of using hybrid technology or LNG yard tractors.

Yantian International Container Terminals (YICT) is the largest port in Shenzhen, handling 10 million TEUs in 2007. YICT has converted 12 of its 200 RTGs from conventional to hybrid electric drivetrains, and plans to switch another 60. The RTGs are equipped with supercapacitors, which are yielding a 25 percent energy savings by capturing and reusing energy released as containers are lowered to the ground. Anticipating shoreside power, YICT has started installing infrastructure works and is studying power converter technology before implementing this new technology. It is also promoting rail transportation from the port on its dedicated rail line. Each train can transport 50 containers in one journey, making them more efficient and cleaner than trucks.