We find that zero-emissions yard tractors and RTG cranes are cost-competitive with diesel today (Exhibit 3).
Overall, hydrogen powertrains appear economically competitive with battery-electric models for yard tractors and high-capacity forklifts, with hydrogen top handlers being significantly more expensive than their electric counterparts. The TCO of hydrogen RTG cranes was not evaluated due to that market segment already being captured by electric models.
Hydrogen yard tractors require more fuel expenditure than electric models, but this cost can be offset because hydrogen units benefit from lower upfront purchase prices after incentives are applied, making both powertrains competitive with diesel. Electric and hydrogen top handlers are both more expensive than diesel due to their large upfront pricing not being sufficiently mitigated by purchase incentives. Hydrogen forklifts are competitive with electric due to reduced infrastructure costs, but both alternative fuel vehicles are much more expensive than diesel, largely due to high upfront purchase prices. Electric RTG cranes are competitive with diesel due to the technology’s maturity and the support of purchase incentives.
However, these findings need to be verified with additional study. Publicly available data on model pricing and maintenance costs are sparse, with hydrogen fuel prices and infrastructure costs also largely uncertain.
Public and private finance can come together to enable turnover of cargo handling equipment
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.
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.
About Clean Industrial Hubs
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.