Will Panama Canal expansion make shipping greener?

On paper, it would seem that a shorter ocean transit route would have a positive impact on the environment. But several scientists contend that the shift of some freight from the U.S. West Coast to the East Coast will represent no more than “a push,” when it comes to cleaning the air and addressing climate change.

Indeed, studying the relationship between climate change and the ocean cargo shipping sector immediately uncovers a series of apparent contradictions, says Elena Craft, a prominent health scientist with the Environmental Defense Fund.

“Of all the modes of transport, containerized shipping uses the most unrefined fossil fuels, yet is the least CO2‐intensive way to move goods around the planet,” she says.

In a recent interview, Craft notes that containerized shipping has a successful legacy of propulsion using renewable sources yet remains wedded to fossil fuels in the modern age. 

It contributes around 3% of global CO2 emissions while, historically, its contribution to climate change has been a cooling effect. And, despite a strong association with “national pride and identity,” it remains omitted from national efforts to tackle greenhouse gas emissions in nations where mitigation is high on the agenda.

It is against this backdrop that Craft has contributed her insights to a special issue of Carbon Management Journal examining “Panama Canal Expansion: Emission Changes from Possible U.S. West Coast Modal Shift.”

The expansion of the Panama Canal presents many opportunities for the intermodal container shipping industry, she says. Larger vessels will be able to transit the canal and take advantage of economies of scale in part to reduce CO2 and criteria pollutant emissions associated with goods movement.

But quantifying emissions changes associated with Panama Canal expansion depends on routing, size of ships, integration of short sea shipping, equipment profile and port of entry decisions (East Coast, Gulf Coast or West Coast). 

So while substitution of larger ships can reduce the CO2 footprint of cargoes carried by containership through an expanded Canal, diversion of current cargoes from modes known to be higher emitting per TEU-mile may not provide emissions benefits where waterborne route distances offset modal efficiencies. 

The conclusion posited by Carbon Management Journal:

“Using our assumption of future cargo volumes and a 10% diversion from the West Coast to the East Coast, the effects of Panama Canal expansion on CO2 emissions are negligible due to longer distances travelled.”

Researchers add that diversion distance offsets vessel size efficiency gains and reductions in inland transportation miles. Changes in emissions of air quality pollutants could be regionally significant in air-quality terms due to the localized nature of their environmental and health impacts.

But there’s an alternative that has yet to be properly explored say Environmental Defense Fund experts – short sea shipping.

“Short sea shipping is one way to possibly mitigate some emissions increases in regions with higher container traffic volumes,” says Craft, “revealing the importance of system-wide and intermodal consideration to improve freight transport from origin to destination, not just from port to port.”