DP World, APM Terminals launch initiative to boost decarbonisation

DP World and APM Terminals announced an initiative to accelerate decarbonisation of the world’s terminals through the widespread electrification of container handling equipment (CHE).

The initiative is grounded in research showing the tipping point for battery-electric CHE can be reached within the next 2-8 years with the right actions from industry stakeholders.

The research findings and roadmap for electrification of CHE are the subject of an industry White Paper, currently endorsed by Eurogate, Port of Kalundborg, and Smart Freight Centre.

CHE is a critical enabler of port operations and is used to move containers on and off ships across the world’s 940 container ports. In 2020, the global fleet of CHE enabled the transportation of 815 million TEUs, with a total value of $ 8.1 trillion. Estimated at 100,000-120,000 units, the global CHE fleet is responsible for 10-15 million tonnes of carbon dioxide per annum.

Keith Svendsen, CEO of APM Terminals, said, “We need to accelerate our work in decarbonisation, and we need to do it now. I am happy to say the research we conducted through Systemiq and ZEnMo strongly backs that a tipping point for the electrification for [CHE] is within reach in this decade. We are now calling for action for the entire port ecosystem to accelerate towards this milestone. It is important for us to stand together, take concrete action with several industry partners for this to happen.”

Tiemen Meester, COO of Ports & Terminals, DP World, commented, “Battery-electric equipment in ports is a realistic, achievable and affordable way to dramatically reduce carbon emissions. Throughout my career I’ve seen many industry players talk about various methods for achieving net-zero, but I’ve never been so convinced by one tactic’s ability to accelerate decarbonisation. It is my sincere hope that the findings in the White Paper can be used by the entire industry to galvanise real change with electric CHEs.” The research mentioned provides for a number of actions that can be taken to reach a tipping point, including making zero-emission operation a requirement as part of new concessions in ports, and terminal operators and equipment manufacturers working together to scale up demand. Furthermore, suppliers can work on further developing their supply chains and standardising certain components, with the support of terminal operators.

“Essentially, what we want is to provide a healthier, cleaner, and more efficient workplace for the thousands working at the terminals and living in the surrounding communities. And while electrification of the container handling equipment is one piece of the puzzle, we believe it is one piece that can be addressed relatively easier and faster than others if we work together and avoid unnecessary complexity”, added Sahar Rashidbeigi, Global Head of Decarbonisation at APM Terminals.

In August, DP World Limited has announced resilient financial results for the first six months to 30th June 2023. On a reported basis, revenue grew by 13.9% to $9,037 million and adjusted EBITDA grew by 7.0% to $2,611 million with adjusted EBITDA of 28.9%.

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented, “We are pleased to share a resilient set of results for the first half of 2023, with our adjusted EBITDA enhancing by 7.0% to surpass $2.6 billion. Despite facing a softer container market and weakened freight rates amid challenging economic conditions, our focus on high-margin cargo, end-to-end bespoke supply chain solutions and cost optimization has been crucial in securing these results. This strategy has not only been effective during these challenging times but also lays the foundation for our sustainable long-term growth and returns.

Our logistics vertical has demonstrated robustness in this demanding economic landscape, attracting more cargo owners to our platform. The positive feedback to our end-to-end product emphasis the value of our customised solutions enables customers to conduct trade more effectively. Strategic investments in high-growth sectors enable us to provide value-added solutions, and we remain committed to continuously enhancing our logistics platform. This includes addressing supply chain inefficiencies and enhancing connectivity in crucial trade lanes to serve cargo owners better.

Notably, we continue to make substantial progress towards our 2050 net zero carbon target. Our recent investment in renewable energy through the I-REC programme has significantly cut DP World UAE business carbon emissions by 47%. We are confident of achieving our goal to cut CO2 emissions by 700k tonnes which accounts for approximately 22% of our total emission within the next five years.

In summary, our balance sheet remains robust, and we continue to generate high levels of cash flow, which provides us the flexibility to invest in the growth of our existing portfolio and new investment opportunities when they arise. While the near-term trade outlook may be uncertain due to macroeconomic and geopolitical factors, the solid financial performance of the first six months positions us well to deliver a steady set of full-year results. We remain optimistic about the medium to long-term prospects of the industry and DP World’s capacity to consistently generate sustainable returns.”