Port Electrification Stalls on One Question: Who Pays?

Sixteen percent. That's the share of Westports' energy coming from its own solar farm today — and, according to the Malaysian terminal operator's Executive Chairman, roughly the limit of what terminals can fund on their own when nobody downstream will pay for green operations.

Speaking on a sustainability panel at TOC Asia, Ruben Emir Gnanalingam Bin Abdullah of Westports Holdings put the industry's dilemma bluntly: the pathway to decarbonising ports is clear — electrification — but the economics are not.

"The key question for me in sustainability is how do you get more sustainable in a financially sustainable way?" he said. "Because it has to also make sense financially, otherwise you can't just push on to try to be green when no one's willing to pay for it."

His verdict on the biggest issue, not just in shipping but globally: consumers are not ready to pay for sustainability at all.

Who actually funds decarbonisation?

Vineet Mahajan, DP World's Vice President and Head of Sustainability for Asia Pacific, agreed — and pushed responsibility up the chain to the cargo owner. "For us as the terminal operators, our clients are shipping lines, but ultimately, the end users, the cargo owners, and how willing they are to pay is what matters," he said.

There is some movement. Cargo owners face mounting pressure from their own customers to cut emissions and provide visibility on them. But Mahajan said the shift falls short: "Ultimately, there is some shift which has happened, but that is not good enough for us as the terminal operators to make huge investments in that side."

For Westports, the investment rule is simple: if there's a return, they'll do it. The solar farm — supplying roughly 16% of the port's energy and, in Gnanalingam's words, "100% green" — is one example. The other is a fleet of 60 electrified terminal tractors.

Even that purchase wasn't driven by emissions. Much of Malaysia's electricity is coal-generated, so electric vehicles there aren't necessarily greener than diesel. "We did it because actually the cost is lower," Gnanalingam said. "It's actually cheaper to go electric these days than to actually use diesel trucks."

Why the grid decides whether electrification works

The panel's sharpest point: electrification only cuts emissions if the power behind it is clean. New Wei Siang, Director, International Division at the Maritime and Port Authority of Singapore (MPA), noted Singapore targets net zero by 2050 and that PSA is pushing electrification — but about 95% of the city-state's electricity still comes from natural gas, a fossil fuel. "It also depends on what's the source of your electricity," he said.

DP World, which operates 16 ports and terminals across Asia-Pacific, makes the call country by country. Mahajan said electrification makes complete sense in Australia and the Philippines, where renewable energy is readily available. Vietnam and Indonesia are another story.

In Indonesia, DP World runs its terminals on B40 biodiesel — a 40% biofuel blend. "If we change to grid electricity, our emissions will actually go higher," Mahajan explained. "So that is the dilemma which we have in Indonesia."

Can regulation break the deadlock?

Gnanalingam's proposed fix is regulatory enforcement. If decarbonisation becomes mandatory across the industry, the commercial friction disappears — customers simply have to pay.

"For example, if shore power becomes a global necessity everywhere, then of course we will then have to charge for it to shipping lines," he said.

Until regulators force the issue, terminals will keep investing only where the numbers work — solar where land allows, electric tractors where they're cheaper than diesel. The financing gap in between waits on cargo owners, and the panel's evidence suggests they're not yet willing to close it.