In response to the intensifying impacts of climate change, the Panama Canal Authority has revealed a noteworthy shift in investment priorities, underscoring a commitment to channel more capital into sustainability initiatives.
The canal authority has earmarked $8.5 billion for capital investments, and a large chunk of that is intended for decarbonization initiatives, outpacing the massive investment made in previous groundbreaking expansion of the waterway.
“We plan to embed sustainability into capital investments worth over $8.5 billion in the next five years, surpassing the $5.4 billion required by the Panama Canal Expansion Program,” the canal authority said.
The canal, a global maritime artery, underwent a historic expansion with the introduction of new locks in 2016, a colossal effort to accommodate larger vessels and increase overall transit capacity.
Out of the said amount, the largest portion ($3.5 billion) will be assigned to infrastructure and equipment, including the installation of a photovoltaic plant, and the purchase of electric vehicles and hybrid tugs.
More than $2 billion more will be dedicated to new sustainability-focused initiatives.
Implementing a more robust water management system is also expected to require an additional $2 billion investment.
The remaining funds of more than a billion dollars, will support digital transformation and decarbonization-focused improvements at the waterway.
The canal authority is working with the World Bank and International Finance Corporation (IFC) on a Greenhouse Gas emissions inventory. The inventory is expected to be published within six months.
Later this year, the canal expects to complete a climate risk assessment and commit to the Science Based Targets initiative (SBTi), encompassing both short and mid-term reduction goals.
This will set the stage for the implementation of more aggressive actions to meet the goals. The overall aim is to achieve net zero carbon emissions by 2050.
“To meet this target, we will pursue meaningful action and engagement, working with the entire maritime value chain to create an enabling environment for climate-resilient operations and development.
By transforming our business, we are confident that we will enable our customers and employees to also transform, allowing all to overcome climate risk and succeed in a new climate economy,” the canal authority said.
To that end, Deputy Administrator Ilya Espino de Marotta was appointed as the first Chief Sustainability Officer for the Panama Canal in January 2024, signaling a commitment to a comprehensive sustainability strategy.
The Panama Canal, like many global waterways, faces substantial economic and social impacts from the effects of climate change.
Last year, confronted with drought, the canal adjusted daily transits to strike a balance between customer service and safeguarding the water supply for Panamanians.
On October 3, 2023, Gatun reservoir faced a daily deficit of three million cubic meters due to low rainfall.
By October 31, 2023, daily transits were gradually reduced to conserve water amid the driest October on record.
However, by December 15, 2023, water-saving measures and improved rainfall allowed for an increase in daily transits to 24 in mid-January.
Source: Offshore Energy
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