Would enable marine industry to achieve its 2050 net zero goals
By Julius Melnitzer | March 26, 2023
Canada’s Chamber of Marine Commerce is calling for the establishment of a green shipping corridor in the Great Lakes–St. Lawrence region as the centrepiece of its 2023 wish list for legislators and policy makers.
The green corridor concept envisaged by the CMC, a non-profit that represents marine industry stakeholders in Canada and the U.S., involves partnerships between governments and various industry players, including ports, cargo shippers and ship operators, to create a regulatory and investment environment that would enable the industry to achieve its 2050 net zero goals by adopting greener approaches to shipping.
“We can make significant gains by moving more goods through the Great Lakes–St. Lawrence systems, by reducing ship emissions further, incenting biofuel and alternative fuel production in Canada, by electrifying ports and by creating land-side cargo handling and fuelling infrastructure,” said Bruce Burrows, CMC’s chief executive.
With marine shipping season and the federal budget both looming, the CMC said in a Mar. 20 press release that it is seeking meaningful progress this year on a “Made in Canada” plan to reduce carbon emissions from the smaller shipping vessels used in the Great Lakes—St. Lawrence, coastal and arctic regions
CMC is specifically asking the Ontario government to complete and enact its first-ever Ontario Marine Transportation Strategy, announced in March, by year’s end. At a recent CMC seminar, Hardeep Grewal, parliamentary secretary to Transportation Minister Caroline Mulroney, acknowledged both the “vital” role of marine shipping in the province’s economy and the issues arising from aging infrastructure and a lack of investment.
“Our government acknowledges and is committed to the critical need for a marine strategy,” he said.
The association is also urging Ottawa to implement the Supply Chain Task Force’s recommendations to unify the government’s jurisdiction over transportation supply chain management across federal departments, address the country’s transportation supply chain labour shortage, and develop a long-term, “future-proof” transportation supply chain strategy.
Burrows points out that the transportation industry comprises about 30 per cent of Canada’s GHG emissions, but road, rail and air transport account for the bulk of that. The marine industry accounts for only two per cent, and lakers — the ships that carry cargo in the Great Lakes, St. Lawrence River, Arctic and East coasts — for only 0.59 per cent.
“Truck and rail capacity is at 100 per cent, but we have 50 per cent excess capacity, which means that moving cargo from land to marine can have a significant impact on congestion and GHG emissions,” he said. “And the cost per mile for marine shipping is vastly cheaper than any other mode, so much so that each ship is worth approximately 1,000 trucks.”
As well, trucking generates almost seven times as many emissions as the average Great Lakes vessel. Given that a recent study showed that trucks moving between Ontario and the U.S. Midwest travel more than 13 million kilometres weekly, the opportunities for reducing congestion and emissions by switching to marine transport are enormous.
“Southern Ontario is among the fastest growing regions in North America and is already home to some of the worst traffic congestion, costing at least $6 billion in lost economic activity each year, and adding $400 million to the costs of goods,” said Ian Hamilton, chief executive of the Hamilton-Oshawa Port Authority. “Add in issues like driver shortages, gas prices and the need to reduce emissions from transportation, and the convergence of factors is finally cracking open the door in a real way for Great Lakes shipping.”
Large shipping companies like Montreal-based CSL Group Inc. and St. Catharines-based Algoma Central Corporation have invested some $2 billion in the past decade on fleet renewal and refurbishment aimed at reducing GHG emissions. CSL has been researching biofuels for four years and using them on eight of their ships in what is the world’s largest marine biodiesel project.
“These eight vessels have reduced their carbon emissions by 80 per cent, displacing some 50,000 tons of carbon,” said John Sypnowich, CSL Group’s chief legal and sustainability officer.
In 2021, CSL launched Nukumi, its most advanced diesel-electric self-unloading vessel, which has reduced GHG emissions by at least 25 per cent. CSL and Algoma have also jointly developed and each ordered two methanol-ready ships, expected to reduce emissions by some 40 per cent.
One of the difficulties facing the industry is that, from a regulatory perspective, most emission reduction work operates under the umbrella of one-off pilot projects requiring massive investment that only large-scale players can pursue.
CSC believes that a green corridor in which the government participated would hasten the creation of a regulatory and investment environment that would enable a broader pursuit of sustainability R&D by an industry that is simultaneously the “green mode” of transport and central to the economy, supporting $60 billion in annual economic activity and more than 300,000 jobs.
But even the biggest players, like CSL, can’t go it alone. For example, the availability of biofuels and alternative fuels are central to the company’s strategic sustainability planning. But the company has to source most of its biofuels from the U.S., where incentives are three times what the Canadian government provides.
“Every inch we lose in biofuel development in a project is one we won’t get back and a lost opportunity for homegrown breakthrough technologies,” Sypnowich said. “All that’s missing for Canada to take advantage of its ideal opportunities to be a world leader in alternative fuel production is regulatory guidance and certainty and appropriate incentives.”
There’s no question that Canada is lagging the U.S., its partner in the Great Lakes.
There’s no Canadian equivalent to the U.S. Inflation Recovery Act and its US$290 billion trove in green finance authorizations coupled with hundreds of millions more available through the Americans’ Port Infrastructure Development Grants Program.
“Canada is focusing on regulation while the U.S. is focusing on providing incentives and financial support,” said Glen Hodgson, an economist and senior fellow at the C.D. Howe Institute. “The Americans have legislation, which gives them more clarity, and all we have to show so far is activity.”
Deputy Prime Minister and Finance Minister Chrystia Freeland has said that the forthcoming budget will provide a Canadian response to the Inflation Recovery Act.
“The budget should focus on a level playing field for green investment across the supply chain, and sufficient green financial support for clean tech, the supply chain and carbon management,” Hodgson said.
Julius Melnitzer is a Toronto-based legal affairs writer, ghostwriter, writing coach and media trainer. Readers can reach him at [email protected] or https://legalwriter.net/contact.
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