Panama Canal Authority To Charge Vessels For Their Greenhouse Gas Emissions

The Panama Canal will begin classifying and charging vessels according to their emission levels. The canal authority’s regular newsletter, Canal Connection, announced that “on the heels of COP26 [the recently concluded United Nations Conference of the Parties on climate change measures], the Panama Canal announces Green Vessel Classification Plan and engagement with the U.S. Army Corps of Engineers for long-term water solution.” During COP26, canal representatives stressed the importance of having the entire supply chain, from shipping lines to final customers, involved in the sustainable transition.

The Panama Canal administrator, Ricaurte Vásquez Morales, while speaking at AAPA Latino in Cartagena, Colombia, on November 30, announced the Panama Canal Green Vessel Classification system, which will include a Greenhouse Gas (GHG) Emissions Fee.

The authority said the changes will build upon the canal’s existing incentives for sustainable shipping lines, provided through its Green Connection Environmental Recognition Program. This program has evolved from the Green Connection Award, the Environmental Premium Ranking and the Emissions Calculator.

“The urgency to take climate action is here, and the industry must take an accelerated approach to mitigate the already adverse effects of climate change. By implementing this fee, the canal acknowledges the environmental impacts of shipping, as well as those in the industry who are paving the way to minimizing emissions,” according to the newsletter. 

The fee will support “investments to guarantee environmental performance standards and aid in making canal operations carbon neutral.”

Ships will be classified in levels depending on their energy efficiency. The classification and fee will apply to all vessels more than 125 feet (38.1 meters) in length overall. This classification system will incorporate the following three factors that will reduce GHG emissions between 20-100 percent during transit through the canal:

• Energy Efficient Design Index (EEDI)

• Efficient operational measures such as the use of bow thrusters

• Use of zero-carbon biofuels or carbon-neutral fuels

The canal has held discussions with ship owners directly for transparency, as it evaluates these changes, and will work in partnership with customers to accelerate carbon neutrality. This program will align with the International Maritime Organization regulations that promote international plans for decarbonization in the maritime sector.

Carbon Neutrality 

Meanwhile, Deputy Administrator Ilya Espino de Marotta participated at the TOC Connect Conference on November 3, where she shared updates on the canal’s ongoing process to reach carbon neutrality, including upcoming plans to consolidate canal facilities to reduce its carbon footprint by 33 percent.

She also said that, as ships transition to cleaner fuels, the canal is investing in hybrid tugboats, starting with 10 with the potential to include more, which reduces 20 percent of tugboat operational carbon emissions. In addition to hybrid tugboats, the canal will introduce a fleet of electric vehicles. Maintaining and modernizing the canal’s infrastructure is also a priority for securing a sustainable future.