Ocean ports around the world represent major sources of coastal air pollution, with fossil fuel-powered ships, trucks, and heavy equipment in use at port terminals.
In Southern California, home to two of the busiest container ports in the county, that pollution is a particularly acute challenge given the proximities to large metropolitan populations. In fact, the Ports of Los Angeles and Long Beach moved more than 16 million TEUs, or nearly 40 percent of imported containers, in the United States in 2023. Those containers include everything from clothes to lifesaving medical equipment. When containers arrive on US shores, they rely on a network of heavy-duty infrastructure known collectively as cargo handling equipment to get them off boats and ultimately into consumer hands.
Cargo handling equipment, also known as container handling equipment, refers to the cranes, top handlers, forklifts, and tractors that load and unload shipping containers on and off boats. Today, most cargo handling equipment runs on diesel. Replacing diesel cargo handling equipment with zero emissions alternatives will improve local air quality and health in neighbouring communities and reduce climate impacts.
Across the fleet of cargo handling equipment at the San Pedro Bay Ports, RMI analysis shows replacement or conversion of remaining CHE to zero-emissions will cost more than $2.5 billion depending on the split between hydrogen and electric equipment. Results from the same analysis of total costs across POLA and POLB under a mixed scenario — comprising both hydrogen and electric powertrain replacements for existing equipment — would require more than $1 billion to replace 1,500 yard tractors and more than $900 million to replace 400 top-handlers. By comparison, of POLA’s $2.6 billion annual budget, only $15 million is allocated toward zero-emissions port electrification.
Terminal operators and other developers can leverage incentives and research tools like the RMI DIRT tool to identify appropriate cost-saving measures to reduce costs on the path to net zero. Federal tax incentives for the purchase of qualifying new equipment can reduce the per-unit capital expenditure by up to $40,000 even before factoring in upstream production and manufacturing tax credits from the Inflation Reduction Act. California has additional incentives that can reduce the purchase price of new cargo handling equipment by 30 to 55 percent, depending on the vehicle and powertrain.
Additionally, many terminals at US ports are owned by financial institutions or beneficial cargo owners (BCO) who can leverage private capital for the transition. For example, financial institution owners of port terminals could leverage collateralised loans or OEM-backed financing for equipment purchases across multiple facilities to reduce procurement costs. Additionally, common facility ownership at ports presents an opportunity to jointly procure equipment, creating economies of scale.
Systems planning for green electricity and hydrogen must start now to meet the ports’ 2030 goal
Replacing existing diesel cargo handling equipment with net-zero alternatives will require significant volumes of green electricity and/or green hydrogen to be delivered to ports.
Upgrades will be necessary for electrical grid infrastructure serving the ports to accommodate the increased load from recharging hundreds of pieces of equipment, like the upgrades Southern California Edison are already planning for a new transmission-level substation and other grid enhancements to serve an expected increase in demand at POLB. Infrastructure for hydrogen delivery and refuelling will also be necessary to ensure cost-effective delivery of zero-emissions fuel.
Terminal operators may also face site constraints in addition to limited electric capacity. Electric refuelling infrastructure often requires more space than diesel pumps because one electric charger supports fewer vehicles than a diesel pump. These chargers can also present a spike in site-wide power usage, and the lead time for getting the power capacity upgrades at a site to support charger installation can be significant. Similarly, building hydrogen refuelling infrastructure and securing low-cost hydrogen will require coordination across terminal operators and other buyers of hydrogen for trucking and shipping.
Ocean ports around the world represent major sources of coastal air pollution, with fossil fuel-powered ships, trucks, and heavy equipment in use at port terminals.
Conclusion: Decarbonising goods movement in the United States and beyond
Converting to zero-emissions cargo handling equipment is just one piece of decarbonising ports and goods movement. Actors across the value chain — beneficial cargo owners, terminal operators, ports, OEMs, utilities, and energy suppliers — all have a role to play in ensuring a rapid and cost-effective transition. Further, environmental justice groups are advocating for a transition away from diesel, while labour groups are working to ensure the transition does not displace union jobs. Cargo owners are increasingly interested in choosing carriers with more sustainable operations, creating pressure for fleets to decarbonise.
Maritime trade will continue to be an essential part of our modern way of life, but we can diminish its climate impact. Reducing port emissions in the United States and globally is essential to meeting climate goals, decarbonising goods movement, and reducing harmful pollution in neighbouring communities
To achieve our goals we need to address the emissions from heavy industry and long-distance transport.
These industries are responsible for roughly 30% of global emissions. We will not meet our goals unless we reduce emissions in these sectors.
John Podesta
Senior Advisor to the US President for International Climate Policy
The insights discussed above come from Mission Possible Partnership and RMI’s Clean Industrial Hub in Los Angeles, California, which accelerates industrial and heavy transportation decarbonisation in the region. Clean industrial hubs bring together policymakers, financial institutions, project developers, and community-based organisations to enable ground-breaking decarbonisation projects in the hardest-to-abate sectors. In Los Angeles, MPP and RMI’s analyses, convenings, and tools support stakeholders working to advance zero-emissions trucking, low-carbon cement plants, sustainable aviation fuel, and decarbonised ports by increasing the size, scale, and speed of critical climate investments that benefit the environment, the economy, and communities. This work is done in partnership with the Bezos Earth Fund.
