Sustainability - Panama Canal

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The Green Route 

The Canal’s all-water route requires fewer cargo movements compared to freight transportation via air, truck or rail. Given the shorter traveling distance and larger TEU capacity it offers, the Canal reduces fuel consumption and therefore emissions, having a positive impact on the reduction of global greenhouse gases compared to other routes.  

In its years of operation, the Panama Canal has allowed vessels to save time and fuel by reducing voyage distances, representing a reduction of more than 850 million of tons of CO2 equivalent. 

Transparency and quality of service remains at the heart of the Canal’s objectives, fostering a sustainable future for global trade tacking actions to achieve the IMO and Paris Agreement global commitments. 

Carbon Neutral by 2030 

The Panama Canal is committed to sustainability, and therefore is laying the foundation, creating the tools, and identifying the changes needed to allow it to reach carbon neutrality by 2030. This process was announced in April 2021 and builds off the Canal’s long-standing efforts to minimize its environmental impact, from encouraging customers to reduce their carbon footprint to managing the natural resources of the nearby Panama Canal Watershed.  

While the Panama Canal contributed to a reduction of more than 13 million tons of CO2 equivalent emissions in 2020 by offering a shorter route for ships in comparison to the most likely alternative routes, the waterway recognizes the importance of making its own operation carbon neutral by the end of the decade. 

The decarbonization process will be gradual and involve new technologies, clean fuels, and research and development. Emissions will be reduced as much as possible by implementing measures and transforming operations before offsetting the remaining emissions. This process will also include phasing out the use of fossil fuels and integrating clean energy projects, energy efficiency measures, and conservation programs.  

The Panama Canal joined the Declaration of the “50 First Carbon-Neutral Organizations”, an initiative led by Panama’s Ministry of Environment to integrate national efforts to accelerate measurable climate actions. As part of the new national initiative, the Canal will develop an annual greenhouse gas inventory, as well as an action plan with measurable targets to reduce emissions. The Canal’s efforts will then be factored into Panama’s National Determined Contribution (NDC), established by the United Nations Framework Convention on Climate Change (UNFCCC), following the Paris Agreement. 

Industry’s Efforts and Tracking Emissions 

One year after launching the Green Connection Environmental Recognition Program, the Panama Canal enhanced its emissions tracking abilities through the Emissions Calculator – a tool that allows to assess the shipping lines’ greenhouse gas (GHG) emissions reductions per route, including the amount saved by transiting the Panama Canal over the most likely alternative route. The tool aims to incentivize customers to demonstrate strong environmental stewardship and adopt more sustainable itineraries. For example, a container vessel traveling from Asia to the U.S. East Coast saves about 12 percent in emissions when returning via the waterway rather than transiting the Suez Canal and would save 18 percent in emissions compared to sailing around Africa’s Cape of Good Hope. Since the program was introduced in 2016, the Emissions Calculator has shown that customers have saved 40 million tons of CO2 by choosing the Panama Canal route. 

After updating the tool to use georeferenced data in 2019, the Canal debuted a CO2 Emissions Dashboard building off information provided by the Emissions Calculator in January 2021. Over the past six months, the Dashboard has published monthly data on the CO2 emissions saved by vessels that chose to transit the Panama Canal compared to the most likely alternative route. Customers benefit from this information as it provides them visibility into how the route helps shipping lines reduce emissions with each transit. 

To date, 35% of the transits through the Panama Canal reflects highest standards of environmental performance, including 1,500 vessels that have applied to the Green Connection Environmental Recognition and other vessels with international standards such as the Environmental Ship Index. The Panama Canal is a member of the IAPH’s Environmental Ship Index (ESI)

Ocean Conservation 

During the seasonal migration of cetaceans, which include whales, dolphins and other large aquatic mammals, the Panama Canal promotes the implementation of maritime traffic separation schemes (TSS) which decreases the overlap between vessels entering or exiting the Canal and migrating whales. Vessels traveling through these areas on the Pacific side of the Canal are also required to proceed at a speed of no more than 10 knots, a practice known as Vessel Speed Reduction (VSR). This measure, first implemented in 2014, has significantly reduced the likelihood of serious incidents and accidents involving humpback whales and other cetaceans in the years since, assuring maritime safety and control of vessels transiting the waters surrounding the Canal. The measures have also lowered their greenhouse gas and pollutant gas emissions by an average of 75%, depending on the type, size, and fuel of each vessel. 

Environmental Stewardship 

The Panama Canal diligently manages the Canal’s water supply and actively protects its environmental resources, while enhancing and maintaining the sustainability of the Canal Watershed.  

For over a decade, the waterway has partnered with communities in the watershed to ensure their sustainable use of the area’s natural resources, while bolstering their quality of life. At the local level, the sustainable development and descarbonization strategy includes a watershed management component which encompasses programs and projects focused on the socioeconomic development of the area, seeking to improve the livelihood of the inhabitants of the watershed, but also actions to improve the territory, landscape management and therefore contributing with the carbon fixation in the vegetation while protecting the hydric resources. 

The Panama Canal runs various environmental programs that have a direct impact on the waterway’s operations, such as the Environmental Economic Incentives Program. Through this initiative, known as PIEA in Spanish, the Canal engaged local communities in the Watershed region through reforestation, environmental education, and economic incentive initiatives that integrate the conservation of the environment with a cleaner operation. 

By offering land titles and sustainable farming programs to local farmers, this initiative has led to: 

📍 Reduced rates of runoff, strengthening the Canal’s watershed management and water supply 

📍 The reforestation of over 8,000 hectares of land 

📍 The program has partnered with more than 1,900 people across 149 communities.

Related News  

Panama Canal – Member of Environmental Ship Index (ESI) 

Panama Canal’s Annual Reports