Volume 23 Issue 3 Article 1 11-2021 The Economic Feasibility of Port Air Emissions Reduction The Economic Feasibility of Port Air Emissions Reduction Measures: The Case Study of the Port of Koper Measures: The Case Study of the Port of Koper Marina Zanne University of Ljubljana, Faculty of Maritime Studies and Transport, Portorož , Slovenia, marina.zanne@fpp.uni-lj.si Elen Twrdy University of Ljubljana, Faculty of Maritime Studies and Transport, Portorož , Slovenia Follow this and additional works at: https://www.ebrjournal.net/home Part of the Environmental Studies Commons Recommended Citation Recommended Citation Zanne, M., & Twrdy, E. (2021). The Economic Feasibility of Port Air Emissions Reduction Measures: The Case Study of the Port of Koper. Economic and Business Review, 23(3). https://doi.org/10.15458/ 2335-4216.1284 This Original Article is brought to you for free and open access by Economic and Business Review. It has been accepted for inclusion in Economic and Business Review by an authorized editor of Economic and Business Review. ORIGINAL ARTICLE The Economic Feasibility of Port Air Emissions Reduction Measures: The Case Study of the Port of Koper Marina Zanne*, Elen Twrdy University of Ljubljana, Faculty of Maritime Studies and Transport, Portoroz, Slovenia Abstract The importance of ports for economies worldwide is undeniable, but at the same time ports cause negative exter- nalities.Thisisparticularlyproblematicwhenportsarelocatedclosetourbanareas.Portmanagementmustthereforetry to mitigate these effects and at the same time ensure the economic prosperity of ports. This development concept is known as green growth. Inordertopromotegreengrowth,andinparticulartoachieveareductioninairemissions,portscanapplyequipment, energy or operational measures. The authors present the economic feasibility of different air emissions reduction measures on the case of port of Koper. Keywords: Port, Green growth, Air emissions, Mitigation measures, Economic feasibility, Case study JEL classification: R42, O21, O44 Introduction M aritime transportis consideredtobethemost cost-effective and environmentally friendly mode of transport for the transport of large quan- tities of goods; nevertheless, in recent times much attention has been paid to its environmental per- formance. Although most of the negative environ- mental impacts of maritime transport occur during the voyage of ships, it is necessary to address these impacts also in ports. Ports are complex entities that play a crucial role in the transport of goods, given that some 11 billion tonnes of freight are transported by sea every year. It is expected that international maritime trade will continue to grow at an average annual growth rate of 3.5% in the period 2019e2024 (UNCTAD, 2019). European ports are important for the European economy; they handled an estimated 4.0 billion tonnes of freight in 2017 (Eurostat, 2019). Indeed, 74% of extra-EU trade and 37% of intra-EU trade is carried by sea (Pastori, 2015). Ports directly support international trade and thus contribute to global economic growth and prosperity. Ports also create jobs; around 1.5 million people are directly employed in European ports and a similar number in supporting activities. It is therefore widely rec- ognised that ports are engines of socio-economic development for the regions they serve (e.g. Dan- ielis & Gregori, 2013; Jouili, 2016; Valantasis-Kanel- los & Song, 2015). However, the traditionally strong relationship between ports and communities is weakening due to the emerging negative external- ities of ports (Merk, 2013; Zhao et al., 2017). These are caused by the handling of goods, by ships call- ing at the port and by traffic serving the port hin- terland (OECD, 2011), and are reflected in air emissions, water quality degradation, soil pollution, waste production, biodiversity loss, increased noise, land use impacts, traffic impacts (congestion) and otherimpactssuchasvisualimpact,odour,dustand social impacts (Merk, 2013). Ports that want to Received 19 February 2020; accepted 19 February 2021. Available online 8 November 2021. * Corresponding author. E-mail addresses: Marina.Zanne@fpp.uni-lj.si (M. Zanne), Elen.Twrdy@fpp.uni-lj.si (E. Twrdy). https://doi.org/10.15458/85451.1284 2335-4216/© 2021 School of Economics and Business University of Ljubljana. This is an open access article under the CC-BY-NC-ND license (http://creativecommons. org/licenses/by-nc-nd/4.0/). prosper must therefore tackle economic growth and environmental protection simultaneously; the two aspects, often seen as contradictory, have now been combined to create a new paradigm of green growth. The paper aims to assess the success of the mea- sures to reduce air emissions in the port of Koper, the only Slovenian cargo port. The existing studies show that port authorities that administer large ports in developed countries pay more attention to reducing air emissions and provide sustainabilityinformation to the interested public more promptly (e.g. Alamoush et al., 2020; Santosetal., 2016). Moreover,thisalso seems to be the case for ports located close to dense urban areas (e.g. Giuliano & Linder, 2013; Poulsen et al., 2018). The port of Koper can be classified as a small port according to Feng and Notteboom (2013) or a me- dium-sized port according to the ESPO (Verhoven, 2010) when throughput is considered, although it is very important for the region it serves. The port of Koper has a particular location; it is surrounded by residential areas on two sides and a nature reserve on the third side. Port authorities generally set the port's development strategy, including green strategies, and monitor the ports' environmental performance, but there is no port authority in Slovenia. In fact, the port of Koper has a distinctive management structure; it does not fit any of the existing port management models, as it is managed and operated by a single company in which private and public capital are combined. Accordingly, pri- vate and public interests can collide. The paper is divided into four sections, and the introduction.Thefirst section definestheconcept of the green port and describes the methods for eval- uating potential measures. The second section de- scribesthedataandmethodsusedinthepaper.The third section, the core of the paper, summarizes the basic concepts on air emissions from ports and in- cludes a presentation of the port of Koper with an evaluation of the measures taken and the current obstacles to the implementation of certain mea- sures. The last section is devoted to the discussion and conclusions. 1 Port greening Ports are uniquely designed social and technical organizations that have become the essential logistical links in the production, distribution and consumption chains of economies worldwide (Cetin, 2015). Ports have developed in different ways, with a combination of commercial, eco- nomic, spatial, political, social and even cultural or military influences. Consequently, ports can range from a small quay for a single ship to very large centers with many terminals and a cluster of in- dustries and services (Bichou, 2009). Nevertheless, ports around the world, especially those in devel- oped countries, face similar challenges; they must adapt their infrastructure and operations to changing demand while meeting increasingly stringent environmental regulations (Lee et al., 2018). As a result, the concept or philosophy of the green port has emerged. Although there is no comprehensive or clear defi- nition of what a green port is, ports worldwide recognize the benefits of a green port philosophy. Theyareimplementinggreenportprograms(Abood, 2007)toachieveasafe,efficientandenvironmentally sustainable port. This means that environmental problems arising from the construction and opera- tionofportsarenolongerperceivedasproblemsbut asopportunities(PIANC,2014)andtheirsolutionsas a competitive factor of ports (Sislian et al., 2016). A green port is a port in which the port authority and port users develop and operate proactively and responsiblyonthebasisofaneconomicgreengrowth strategy (PIANC, 2014), meaning that they must continuously attempt to strike a balance between environmental impacts and economic interests (Trozzi&Vaccaro,2000),or,inotherwords,inaddi- tion to economic development, they must strive for environmental quality, ecosystem integrity, energy efficiency and the transition to renewable energies, appropriatewastemanagementandthemitigationof climatechange(OECD,2011). Researchers have been paying increasing atten- tion to the negative impacts of port operations over the last 30 years (Di Vaio et al., 2019). However, the literature review shows that green ports have become an accentuated research topic since 2006 (Davarzanietal.,2016).Sincethen,manyportshave developed Corporate Social Responsibility (CSR) strategies (Bergqvist & Egels-Zanden, 2012), including Environmental Management Systems (EMS) based on ISO 14001 or EU Eco-Management and Audit Scheme (EMAS). EMS usually consists of a collection of internal policies, assessments, plans and implementation measures (Coglianese & Nash, 2001) and procedures for staff training, monitoring, summarizing and reporting on specific environ- mental performance information (Sroufe, 2003). EMS can include also the energy management 142 ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 system or the latest can be developed as a separate energy management system (EnMS). 1.1 Selection of the green growth measures and the estimation of their results EMS follows the “Plan-Do-Check-Act” manage- ment methodology and therefore requires scientifi- callysoundevidenceonwhichtobasedecisions,the identification of Key Performance Indicators (KPIs) or Environmental Performance Indicators (EPIs) to demonstrate success, and a suitable monitoring system to assess both the effectiveness of manage- ment and the quality of the environment itself (Wooldridge & Stojanovic, 2004). Quantification is therefore essential as it provides a baseline against whichsubsequentprogressandperformancecanbe measured (Merk, 2013). In order to meet the requirements of EMS, the portsmustidentifyandprioritizetheenvironmental aspects. This can be done in various ways, but usually involves several steps: identifying port ac- tivities, identifying port environmental aspects, establishingthelinksbetweenactivitiesandaspects, defining criteria, determining the weighting of the criteria and finally, establishing the links between aspects and criteria (Puig et al., 2015). The inclusion of a certain sustainability measure may increase the initial costs; however, it may lead to life cycle savings (Abood, 2007). The investments and activities must therefore be carefully analyzed. EU guidance documents suggest the use of cost- benefit analysis (CBA) in the decision-making pro- cess for investment projects, as it is a comprehen- sive method with standardized rules (HM Treasury, 2018). Any CBA should integrate the economic cost of air pollution, which includes health impacts, building and material damages, crop losses and impacts on ecosystems and biodiversity (EC, 2015). The results of cost-benefit analysis are usually expressed interms of paybackperiod(PP). PP is the period of time needed to cover the costs of an investment. PP¼ TC TR ð1Þ where TC ¼ total costs, and TR ¼ total revenues (or benefits). However, calculating PP ignores the time value of money,whichcanbeovercomebyusingnetpresent value. Another option is to use the cost-effectiveness analysis(CEA),whichcanbeappliedwhentheben- efitscannotbeexpressedinmonetaryterms.CEAis relativelyeasiertocalculatethanCBAbecausenotall things need to be quantified in monetary terms; however, CEA does not allow comparisons between activities that produce different results. CEA results areexpressedasratios,namelythecost-effectiveness ratio (CER) or incremental cost-effectiveness ratio (ICER). CER¼ C E ICER¼ DC DE ð2Þ where C ¼ cost of project or intervention, and E ¼ effect of project or intervention. 2 Data and methods The paperconsists of atwo-step research process. First, we summarized the theory of port greening and methods for selecting and evaluating port greening measures. Keywords such as “green ports”, “port greening”, “port sustainability”, “ports’ air quality”, “port operations air emissions”, “port air emissions mitigation measures”, “energy man- agement in ports” were considered in the Science- Direct database and Google Scholar. Weproceededwiththecasestudyfocusingonthe port of Koper and the measures taken by the man- aging company to reduce air emissions. Although casestudymethodscanbeperceivedascontroversial, especiallysinglecasestudiesastheycannotprovide generalized assumptions (in the sense of statistical generalization),theyarewidelyacceptedinthesocial sciences. In fact, case study research can be used to generateortesttheorywithrealcasestudies.Thisis especiallytrueforports.Therearethousandsofports around theworld,butit is almost impossibletofind twothathavethesameoperatingconditions.There- fore,theuseofthecasestudymethod,which allows foradetailedexaminationoftheareaunderstudy,is verycommonintheinitialanalysisofports. The research question was formulated at the begin- ning of the study. The main research question was “Whatairreductionmeasuresareapplicableintheport ofKoperandhowefficientarethemeasurestaken?". Interviews and document review were used to obtaindatathatenabledadetailedanalysisofthecase study. Interview questions were based on the litera- turereviewandtheEcoPortsself-diagnosticchecklist. 3 The Port of Koper The port of Koper started its activity in December 1958, with 135 m of quay. Since then, the port has ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 143 developed into one of the most important North Adriatic ports; the port of Koper holds the leading position in container traffic in the Adriatic Sea and ranks third among Mediterranean ports in terms of car transshipment. The port of Koper is the only Slovenian interna- tionalcargo port. It is managed and operated by the joint-stock company Luka Koper. The multipurpose porthastwelvespecializedterminalswith3300mof quayand26berths.Seventykilometersofroadsand thirtykilometersofrailwaysconnectallterminals to the public transport infrastructure. Around 2000 ships call at the port annually. In 2018, the port handled around 24 million tons of cargo and almost 1 million TEUs (see Fig. 1). The port of Koper supplies a wide hinterland that includes Slovenia, Croatia, Austria, northern Italy, Hungary, Switzerland, southern Germany, Czech Re- public, Slovakia, Serbia, and marginally some other countries. These countries have good economic po- tential, which could be enhanced by the movement of the “bluebanana”towardstheeast.Moreover,theport of Koper is located on the Baltic-Adriatic corridor, which is labelled as one of the main trans-European road and rail axes. Koper (and other North Adriatic ports) represent the most convenient and environ- mentally friendly trade route connecting Central EuropewiththeMiddleandFarEast.Notsurprisingly, Luka Koper has ambitious expansion plans. Accord- ingly,throughputisexpectedtoincrease. 3.1 The green management of the port of Koper The port of Koper is designed and operated ac- cording to sustainable principles. Luka Koper manages the entire port area. This enables the implementation of an environmental protection systemonallterminalsandforallitsactivities.Luka Koper obtained ISO 14001 in 2000. In May 2006, this standard was upgraded to ISO 14001:2004, while Luka Koper obtained EMAS certification in 2010. This made it compliant with the highest environ- mental criteria of the time (Luka Koper, 2018). Currently,LukaKoperisadaptingitsenvironmental management system to meet the requirements of the energy efficiency standard ISO 50001. Luka Koper has prepared its EMS and has the Environ- mental policy, which refers to the European Sea Ports Organisation (ESPO) guidelines. It ranked noise as themainpriority,followed bydredging,air quality, dust, energy consumption and relationship with the community (interview in Luka Koper). 3.2 Port air emissions reduction measures Airemissionsareonlyoneofthenegativeimpacts addressed by the port green growth concept. Air emissions are generally divided into two categories, greenhousegasemissionsthatcauseclimatechange and air pollutants that are harmful to the environ- ment and human health. The latter is particularly important if the port is located near urban areas. As can be seen from the figure below, many port and port-related activities cause air emissions and air quality degradation. The problem can be addressed in different but somewhat interrelated ways, including changes in equipment and energy consumption, as well as at the operational level (see Fig. 2). The literature overview on the measures for air emissionsmitigationfromportandrelatedactivities is presented in Table 1. Fig. 1. Total throughput and container throughput in the port of Koper [in million tons]. Source: authors, based on Luka Koper, 2019a. 144 ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 3.2.1 Equipment measures Rubber-tired gantry cranes (RTGs) are the largest consumersofdieselfuelandthelargestcontributors toairemissionsintheportofKoper.Onaverage,an RTG consumes about 12 L of diesel per hour, and they typically operate 22 h per day, more than any other piece of equipment (for comparison, ship-to- shore (STS) container cranes operate an average of 9 h per day). Therefore, one of Luka Koper's stra- tegicprojectsistheelectrificationofRTGsandother container terminal equipment. Currently, Luka KoperoperatesnineelectrifiedSTScontainergantry cranes, twelve electrified RTGs (e-RTGs) and three rail-mounted gantry cranes (RMGs), which repre- sent 23.8% of the equipment and mechanization at the container terminal. The e-RTG costs more than a comparable diesel- poweredRTG;however,theestimateddirectsavings are EUR 60,000 per year per e-RTG compared to diesel-powered RTGs (interview in Luka Koper). In Fig. 2. The sources and elements of port air emissions, and air emissions reduction measures. Source: authors. Table 1. Literature overview on air emission reduction measures in ports. Author(s) Field Research topic/Findings Acciaro et al., 2014; Poulsen et al. (2018) Operational measures Limits regarding the emissions for the road and rail vehicles operating within the port Chen et al., 2013; Phan & Kim, 2015; Mjeldeetal.,2019;Lind&Haraldson, 2016; Chang & Wang, 2012; Poulsen et al. (2018) Operational measures/ Collaboration Improvement of coordination and synchroniza- tion between ship and port, the optimization of the movements within the port and reduction of idle time of equipment and vehicles, provision of automated cargo-handling operations Lee & Nam, 2017; Mjelde et al., 2019 Operational measures/Port dues Differentiated dues in relation to the environ- mental performance of ships Bergqvist& Egels-Zanden, 2012; Lam& Notteboom, 2014 Operational measures/Port dues/Modal shift Differentiatedduesinrelationtoselectedmodeof transport in hinterland Chang&Wang,2012;Changetal.,2013; Linder (2018) Operational measures Speed reduction zones for ships Burns,2015;Acciaroetal.,2014;Çagatay & Lam, 2019; Lam et al., 2014; Zis et al., 2014; Chang & Wang, 2012; Winkel et al., 2016 Equipment measures Energy measures Energy consumption Energy management Carboon footprint Modernisation and electrification of equipment, the use of autonomous vehicles and vehicles powered by liquefied natural gas (LNG), energy storage systems, alternative energy sources, on shore power supply (OPS) Corbett et al., 2007; Chatzinikolaou et al., 2015 Health impacts Local polluters and particles cause cardio- vascular or respiratory system diseases and deaths Peris-Mora et al., 2005; Perotto et al., 2008; Puente-Rodríguez et al., 2016; Laxeetal.,2016;Laxeetal.,2017;Puig et al. (2015) Environmental performance indicators Identification of a comprehensive set of KPIs and EPIs to quantify port performance and the formulation of Global Synthetic Index (SI) Lam & Notteboom, 2014; Chen & Pak, 2017; Acciaro et al., 2014 Operational measures/ Monitoring Inputforstrategiesandtoolforassessingprogress and transparency of operation Source: authors. ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 145 addition, e-RTG offers 95% savings in diesel con- sumption,upto70%reductioninoperatingcosts,up to 70% reduction in maintenance costs, as well as significant reduction in greenhouse gas emissions (CO2 and NOx) and noise pollution (Naicker & Allopi,2015).Therefore,itismeaninglesstocalculate the payback period for this equipment alone, as the scopeofthepurchaseismuchlarger.LukaKoperwill continue to replace the equipment with the electric one instead of retrofitting the existing equipment with hybrid power pack, diesel fuel saver, cablereel system,orconductorrailsystem. Thetotalenergyconsumptionofthecontainerter- minal has increased in the period from 2015 to 2018 (diesel consumption remained at approximately 3.1 millionliters,whileelectricityconsumptionincreased fromapproximately6400to8700MWh),butsohasthe throughput (from 790,736 to 988,501 TEUs, or from 7,741,976 to 9,520,007 tons). The better energy con- sumptionstructureandhigherthroughputresultedin lowerconsumptionandalowercarbonfootprintper unithandled,asshownintheTable2. Inadditiontothemobileequipmentof(container) terminals, the lighting of yards and warehouses has a high share in the electricity consumption of ports. Therefore, installing an intelligent and efficient lightingsystem isanexcellent way toreduceoverall electricity consumption and, consequently, harmful emissions and light pollution. Efficient lamps, fit- tingsandcontrolssavemoneyandimproveworking conditions (ESPO, 2013). Dolamic (2018) conducted the CBA for the installation of a new LED lighting system on one of the road sections of the port of Koper, in the garage for new vehicles, in a typical warehouse and at the container terminal. All simu- lations predicted cost savings between 65 and 80%, and an extra benefit in form of better and safer working conditions. About 85% of outdoor lighting within the port of Koper complied with the regula- tion on limits due to environmental light pollution already by the end of 2013 (Luka Koper, 2014). Air quality is affected not only by emissions from fuelcombustion,butalsobyparticulatesthatriseinto the air during manipulation with certain types of cargo, especially dry bulk. As residential areas and sensitivenaturereservessurroundtheportofKoper, Luka Koper built a closed conveyor system for unloadingshipsattheironoreandcoalterminaland equippedtheshiploaderwithananti-dusttelescopic pipe.Theyalsobuiltasystemofsprinklertowersand an aluminium barrier with a height of 11 m. By sprayingaspecialcellulosemixtureonthestockpiles, theycoverthecoalandorewithacrustthatprevents dust formation even in high winds (Luka Koper, 2019b). In addition to construction costs, there are almost no operating costs because the cellulose mixture is made from a waste product of the paper industry and the water used to clean the transport route around the terminal is collected, treated and reused. The economic result of the project is nega- tive, but the cost-effectiveness is high as the air quality, expressed in particulate matter (PM) con- centration,withintheportareaanditssurroundings isnowbetterthaninmost majorcitiesinSlovenia. 3.2.2 Energy measures The portof Koper islocated inthe North Adriatic, where the tides and waves are negligible and thus cannot be used as a source of energy. Also the wind conditions are not suitable for the installation of wind turbines, at least not such that could signifi- cantly contribute to the use of renewable sources. Ontheotherhand,theregionhasmanysunnydays, which makes the roofs of warehouses a good option for the installation of photovoltaic systems. Two solar power plants arepossible intheportofKoper. A 12 MWp plant (Mega-Watt peak) power that could be built by covering 84,000 m2 of roofs within the port (Luka Koper, 2017), and the larger one covering 700,000 m2 of open space parking lots within the port, which could produce about 115 million kWh of electricity annually and would cost about 155 million EUR (own calculation from Tavcar, 2019). The construction of the first solar power plant is economically feasible and is planned to be done in phases; at least 1.25 MWp should be constructed by 2025 and at least 3 MWp should be in operation by Table 2. Energy consumption at the container terminal of the port of Koper in 2015 and 2018. 2015 2018 Index Total energy [MWh]* 39,393 42,355 107.5 Total carbon footprint [mio kgCO2eq/year]** 11,505 12,552 109.1 Energy consumption per ton of throughput [kWh t] 5.09 4.45 87.4 Energy consumption per handled TEU [kWh/TEU] 49.82 42.85 86.0 Carbon footprint per ton of throughput [kg CO2eq/t] 1.49 1.32 88.6 Carbon footprint per handled TEU [kg CO2eq/TEU] 14.55 12.70 87.3 Note: *Energy equivalences used: 1kWh electricity ¼ 3.6 MJ and 1l diesel ¼ 38.29 MJ as conversion factors. **Equivalences used in carbon footprint calculation: 0.375 kgCO2eq/kWh for electricity and 0.276 kgCO2eq/kWh for diesel as used by Luka Koper. Source: own calculation, based on Luka Koper, 2016; Luka Koper, 2019a; interview in Luka Koper. 146 ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 2030. On average, the payback period is expected to be between 10 and 13 years as each rooftop project must be evaluated individually. The second project would result in a much longer payback period as it would require the installation of car roofs; however, it should be economically more feasible with the expected continued decline in the price of photo- voltaicsystems.Theadditionalbenefitofthisproject would be the protection of the new vehicles, which are one of the strategic cargoes in the port of Koper. Once built, these power plants would make the port energy self-sufficient, even if shore power is installed. OPS would reduce emissions from ships in port, since ships' auxiliary engines must be on throughout their stay in port to provide power on board. Ships have different engine configurations; however,diesel-mechanicalshipstypicallyhave2or 3 auxiliary engines installed, while diesel-electric ships have 4 to 6 auxiliary engines (GLMEEP, 2016). For example, a rather small container ship with a capacity of about 4000 TEU has three auxiliary en- gines, each with a power of 2320 kW, and each consuming 4.5 tonnes of fuel per day while in port. However, also much larger ships call to the port of Koper. From the beginning of 2020, the sulphur content in marine fuel must not exceed 0.5%, but still when burned a tonne of marine bunker pro- duces on average 3.17 tonnes of CO2, regardless of the fuel type or engine type, 0.02 S tonnes of SO2 (where S stays for sulphur content in fuel) and 0.057e0.087 tonnes of NOx, depending on the ma- rine engine (Psaraftis, 2008). Nevertheless, there is currently no practical reason for the installation of OPS in the port of Koper, as only one ship calling the port is equipped withtheappropriatesystem.TheinstallationofOPS on all terminals in the port of Koper would require an investment of approximately EUR 60 million (interview in Luka Koper) and the installation of a costly system on board the vessels, which the ship- ping companies are not willing to do.Moreover, the construction of the OPS would interfere with daily port operations and could jeopardise the reliability of port services, while the required transformers would permanently hinder the movement of land cranes and terminal vehicles. Operating OPS throughout the port would hugely increase elec- tricity demand and require a completely different system of power supply to the port; Slovenia is not ready for that either. The installation of OPS would perhaps make sense after the construction of the solar panels mentioned above. Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the deployment of alternative fuels infrastructure requires that at least by the end of 2025 a core networkofrefuellingpointsforliquefiednaturalgas (LNG) is available in seaports, not only for the refuelling of port equipment, but also for the pro- vision of bunkering facilities for ships calling at the port (Official Journal of the EU, L 307/1, 2014). The study on the gradual introduction of LNG terminal vehiclesintheportofKoperwascarriedoutin2016. It envisaged the acquisition of 95 land-based trans- port and handling units in the period from 2020 to 2030. The project is currently on hold as the port is not connected to the gas pipeline, which would require external supply by tank-trucks or boats, consequently increasing operating costs. However, as LNG becomes more and more important as an environmentally friendly solution for bunkering ships, not only for merchant vessels but also for tugboats, it might become necessary to install the LNG station in the port of Koper. At the same time, the LNG-fueled terminal equipment should be reconsidered, as the use of LNG, in addition to the economic advantages, brings many environmental benefits, such as the reduction of SO2 emissions by almost100%andthereductionofCO2emissionsby more than 25% compared to diesel-fueled equip- ment. In addition, emissions of particulate matter and NOx are also reduced. 3.2.3 Operational measures A relatively low-cost measure that can reduce energy consumption and thus emissions while maintaining operational efficiency is eco-driving and optimized routing of terminal equipment. The studies show that fuel consumption can be reduced by an average of 10e15% per year through eco- driving (Kristensen, 2009). The drivers of Luka Koper have been trained to use the equipment safely and properly and will also undergo the eco- driving training in the coming years. Anotherapplicablesoftmeasureisthescheduling of truck arrivals. This is called truck scheduling sys- tem(TAS)orvehiclebookingsystem(VBS)andcan, amongotherthings,leadtoabetterutilizationofthe (container)terminal.Itisparticularlybeneficialwhen usedtoreducethedwelltimeofreefercontainersat ports, as these are large consumers of energy. Luka Koper completed the VBS in November 2019, so the resultscannotyetbeevaluated. AtleastthirtyportsintheEUapplyenvironmental charges, meaning the environmentally friendlier ships according to the emissions ship index (ESI) or certification programmes (e.g. Green Award) pay lowerportfees.Thediscountscanrangefrom0.5%to 20% (EC, 2017). While the implementation of this measuremayimprovetheimageoftheport,itsvalue ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 147 is broader as it could help incentivize more sustain- able development of ships by supporting the adop- tion of cleaner fuels in maritime transport. Luka Koper has sent the initiative to introduce an envi- ronmentalchargingsystemintheportofKopertothe Maritime Administration of Slovenia and is still waitingforanofficialresponse. Moreover, the configuration of the terminals can lead to a change in energy consumption and improvedtrafficflowwithintheport.LukaKoperhas relocateditsRoRoterminal,whichwillresultinlower mileage of the new vehicles in the port and lower emissions. In addition, most of the traffic will be handledfurtherawayfromurbanareas. 4 Discussion and conclusions Portsareexpectedtoaligntheirperformancewith overall sustainability goals, i.e. deliver optimal eco- nomic and social outcomes while causing minimal environmental damage (UNCTAD, 2019). Measures taken by ports under the green port philosophy therefore become the main element of port strate- gies. These measures can be classified as organisa- tional or technical-technological; however, not all measures can be taken by all ports for various rea- sons, but mainly because of financial resources as many can be very demanding (Olesen et al., 2012) and thus expensive. Small ports usually have lower revenue per employee, lower earnings before inter- est, taxes, depreciation and amortisation (EBITDA) per employee, lower return on investment, higher operating costs and higher cost of capital per unit handled than larger ports. Smaller ports have lower revenues and, consequently, fewer resources for research and development and the investments associated with improving the port's sustainability. Adequate sustainability management is therefore rarelyfoundinsmallerports(Kuznetsovetal.,2015), but Luka Koper suggests otherwise. The port of Koper is a small port with a limited budget, e.g. Luka Koper investedV15.8 in 2018 with EBIT of V69.7 million (Luka Koper, 2019a,b), while the Port Authority in Rotterdam made aloneV 408.1 million of investments in the same year (Port of RotterdamAuthority,2019),whiletheinvestmentsof private operators are not known. However, with the sameenvironmentalimpactsasanyotherlargerport (in terms of elements,not volume).LukaKoper does not escape this; on the contrary, it is not only the economic benefits and profits that exclusively guide the company's decisions, but also the environmental performance. Environmental quality and portecity relations occupy an important place in the port's strategic orientations. Luka Koper has even set up a sophisticated measurement system with real-time publication of data so that the transparency of its environmental efficiency can be monitored at any time. Yet, as a small port facing the above-mentioned concerns, Luka Koper has to prioritise investments, eventhoughtheportisoneofthe83EUportsinthe coretransEuropeantransportnetwork(TEN-T)and thus eligible for co-financing of projects, especially those dealing with energy-saving and environmen- tally friendly solutions. Any investment decision requires extensive elaborates, which are per se expensive and time-consuming. Fig.3.AverageenergyconsumptionandcarbonfootprintfromthePortofKoper.Note:Weused1kWh¼3.6MJand1l diesel ¼38.29MJasconversion factors; we used total throughput as a productivity parameter. Source: Authors based on Luka Koper, 2016; Luka Koper, 2019a; Luka Koper, 2019b; interview in Luka Koper. 148 ECONOMIC AND BUSINESS REVIEW 2021;23:141e151 The strategic direction of the company is to ach- ieve high energy efficiency in all business processes carriedout inthe portarea.Ascan beseeninFig.3, energy consumption per tonne of cargo handled decreased by more than 20% between 2009 and 2018. This is also reflected in the carbon footprint of the entire port, which fell by almost 22% over the same period. The main objective of this paper was not to compare differentports, but toanalyzetheactivities of Luka Koper in terms of environmental perfor- mance. We focused on the measures taken by Luka Koper to reduce air emissions from the port's core activities. The specific organizational model of Luka Koper, with the potential clash of interests between privateandpublicownership,motivatedustoselect this port because private capital typically pursues revenue maximization from available assets and demand-driven infrastructure investments, while public commitments include social responsibility and involve decision making where negative exter- nalities are relevant, including the activities and measures to reduce air quality deterioration. The activities taken so far by Luka Koper are in line with EU directives and the concept of sustain- able development; the measures taken have contributed to reducing the carbon footprint of the port and improving air quality around the port without negatively affecting the throughput of the port. These measures are highly appreciated by local citizens, as evidenced by annual surveys. Although the monetary valuation of air emission reduction measures is challenging, studies show that the economic benefits of many air pollution controlmeasuresexceedtheircosts,evenwhenonly health impacts are assessed (e.g. Holland, 2014; Sofia et al., 2020). This can be seen also on the case of the port of Koper. Some of the measures taken, such as replacement of the terminal equipment, are necessary because the equipment has a limited lifespan.LukaKoperdecidedtobuymoreexpensive equipment, but equipment that is environmentally friendly and costs less to operate. On the other hand, some of the planned measures are not indis- pensable and require large initial investments, but are considered as long-term strategic solutions to reduce air emissions (energy measures) and ensure energy self-sufficiency of the port. The port of Koper is not only important for the local community, but also has a greater economic impact; therefore, the state should support Luka Koper to achieve high environmental standards and also implement certain environmental mea- sures. For example, Winkel and others (2016) claim thatifallportsinEuropeusedelectricityfromOPS in 2020, an estimated V2.94 billion in health costs could be saved and an approximate reduction in carbonemissionsof800,000tonscouldbeachieved. These benefits are far-reaching, and the costs of installing and operating OPS should not be borne solely by ports and shipping companies. Luka Koper also cannot offer differential charges for those cargoes that use rail transport, as the rail infrastructureisinadequateandtheutilizationrate is close to the limit, so the alternative to road transport is not always possible. However, there are plenty of other, either operational or techno- logical, measures to reduce air emissions, such as the reduction of the ship speed in the port aqua- torium and in the vicinity of populated areas or a bettersynchronizationbetweenshipandportwhen the ship arrives in port, improvements in landside operations etc. WhilethispaperprovidesinsightintoLukaKoper attitudes toward environmental issues with a focus onairquality,thereisstillmuchforfutureresearch. Air quality indicators could be analysed to form models related to port activity parameters, which would support management in decision-making processes. Other elements of port sustainability or portecity relationship, such as noise, traffic conges- tionorhealthproblemsoccurrenceinthelocalpop- ulation could also be investigated. And last but not least,environmentalaccomplishmentsofLukaKoper should be compared to ports with similar attributes butadifferentmanagementmodel. References Abood, K. (2007). 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