Zespri considers low-emission shipping corridor between NZ and Belgium

The New Zealand-based kiwifruit company has launched a pilot sustainability project with shipping firm ANL, part of CMA CGM

Zespri ship

Kiwifruit marketer Zespri and its shipping partner ANL – part of CMA CGM – have launched a feasibility study into the possibility of a low-emissions corridor between New Zealand and Belgium.

On Tuesday 10 September, New Zealand’s associate transport minister Matt Doocey hosted an event in support of the project, which would connect the ports of Tauranga and Zeebrugge via the Panama Canal.

Zespri’s sustainability executive officer Rachel Depree said shipping played a critical part in New Zealand’s export-driven economy, carrying 99 per cent of the country’s trade by volume and around 80 per cent by value.

“Low-emissions shipping is a critical part of carbon reduction for exporters and also underpins our collective ability to achieve the government’s goal of doubling export value over the next ten years,” she commented.

“Collectively we are already facing rising costs as carbon is priced into the economy and our markets and customers are starting to demand targets and plans to lower emissions over time.”

ANL and CMA CGM Oceania managing director Shane Walden outlined his group’s efforts to decarbonise transport and logistics.

“The CMA CGM Group is a global player in sea, land, air and logistics solutions, and places the preservation of the environment at the heart of its strategy, with a commitment to reach Net Zero Carbon by 2050 across all its activities,” he explained.

“In shipping, CMA CGM is focused on reducing energy consumption as well as using sustainable low-carbon energies where possible in order to accelerate the energy transition of the sector, including that of key customers such as Zespri.”

He added: “New Zealand is an important country for the CMA CGM Group. The country has a geographic advantage that, with support, could allow New Zealand to play a role as a maritime energy hub for the South Pacific.

“We embarked upon this project with Zespri and EY as it is imperative that we jointly address climate challenges in the sector to support New Zealand’s maritime trade.”

Joint effort

Depree said shipping emissions were one of the key challenges to decarbonising the kiwifruit industry and meeting Zespri’s climate commitments.

“While kiwifruit is a low-carbon product, shipping emissions make up a larger portion of the product’s overall carbon footprint at 43 per cent – and that’s why action is a priority.

“Like many exporters, Zespri can’t directly reduce shipping emissions ourselves so we’re working with our shipping and distribution partners to improve efficiency and find opportunities to pilot low-emissions fuels solutions as we work towards our ambition of being carbon positive by 2035.

“This includes continuing to advocate for new port infrastructure and supporting the introduction of more low emissions shipping vessels, fuels and technology – all of which are critical and which require significant investment.

“The problem is significant and the answer complex but we do know success here will require coordinated action across government and supply chains,” she concluded.

Below is an outline of what Zespri and ANL/CMA CGM say they learned from the EY report…

Alternative fuels

There’s no clear winner in the fuel race yet.
Emission intensity of alternative fuels is dependent on how these are manufactured.
Renewable energy is critical for upscaling alternative fuel production.
Biofuel can provide a useful lower-emissions bridge as it can be “dropped in” to conventional vessels often with little or no modifications.

Fuel cost

Alternative fuels are expected to price-match fossil fuels by 2040 onwards, due to reducing renewable electricity cost, the removal of subsidies on fossil fuel and carbon taxes.
First movers are needed to understand commercial production and economies of scale. In an uncertain regulatory environment, they must be supported by relevant agencies to overcome barriers and reduce investment risk.
An effective emissions pricing mechanism is needed to make green fuel competitive with “black fuel” during the transition period.

Ports & alternative fuel storage

Ports need longer and deeper berths to accommodate low-emission ships. These ships are larger than fossil-fuelled ships as alternative fuel is not as energy dense and vessels need larger fuel tanks.
Ports can become a key stakeholder in alternative fuel value chains, capitalising on the opportunity to become alternative fuel bunkering hubs.
New storage infrastructure is needed to safely bunker alternative fuel.
Storage will need to be almost twice the size for liquefied methane and more than four times greater for hydrogen to create the same energy.

Policy and investment

New Zealand trails other countries in climate and transport policy and investment for low emissions shipping.
For example the port of Rotterdam currently has a terminal and bunkering for methanol, biofuels and LNG, a terminal for ammonia (with a feasibility study for bunkering) and small-scale bunkering for hydrogen.