How ABP is turning maritime hubs into clean energy powerhouses

This
interview
is
part
of
the

Inside
the
Mind
of
the
CxO
series,
which
explores
a
wide
range
of
critical
decisions
faced
by
chief
executives
around
the
world.

Maritime
ports
have
long
been
engines
of
the
global
economy.
Of
crucial
importance
as
trading
and
supply
chain
hubs,
they
have
a
deep
history
in
commerce,
with
some
dating
back
thousands
of
years.
Now,
they’re
emerging
as
leaders
of
a
21st-century
tech-enabled
energy
transition.
Responsible
for
80%
of
worldwide
trade,
ports
host
and
service
a
range
of
adjacent
industries.
They’re
uniquely
positioned
at
the
nexus
of
an
ecosystem
of
businesses
urgently
responding
to
emerging
technologies,
geopolitical
risks,
and
climate
change.

The
climate
crisis,
in
particular,
has
been
a
catalyst
of
innovation
for
Associated
British
Ports
(ABP),
which
handles
a
quarter
of
the
UK’s
seaborne
trade.
The
company
has
been
privately
held
since
1982,
and
it’s
now
owned
by
a
mix
of
pension
and
sovereign
wealth
funds.
ABP’s
21
port
locations
and
8,600-acre
land
portfolio
are
central
to
its
strategy:
rethinking
and
repurposing
land
use
for
renewable
energy
projects
like
offshore
wind
and
solar
installation,
and
exploring
diverse
business
models,
including
partnerships
with
climate
tech
start-ups.

Max
Harris,
ABP’s
group
head
of
strategy
and
sustainability,
oversees
its
new
Energy
Ventures
Accelerator
(EVA)
program.
The
initiative
is
poised
to
help
deepen
the
port
operator’s
relationship
with
its
carbon-intensive
industry
customers,
including
shipping
companies
and
steel
manufacturers,
by
connecting
them
with
climate
tech
start-ups
that
can
help
tackle
big
challenges,
like
decarbonizing
industrial
heat.
It’s
also
a
chance
for
ABP
to
invest
in
potential
customers
of
the
future,
as
these
start-ups
seek
to
scale
commercially.

Harris
recently
talked
to

strategy+business
about
how
the
evolving
role
of
ports
creates
opportunities
for
ABP
to
test
new
business
models,
address
its
own
climate
challenges,
and
help
its
customers
advance
hydrogen
power,
offshore
wind,
carbon
capture
and
storage,
and
other
sustainability-related
goals.

The
following
is
an
edited
version
of
the
conversation.

S+B:
How
have
the
needs
of
your
traditional
ports
customers
changed?
MAX
HARRIS:
Decarbonization
is,
overwhelmingly,
the
main
megatrend
that
customers
want
to
talk
about.
These
customers
include
shipping
lines
and
logistics
companies
with
heavy-goods
vehicles
coming
in
on
ferries.
Aside
from
that,
it’s
about
supply
chain
cost
efficiency
and
having
greater
visibility
of
interconnected
operations.
But,
absolutely,
decarbonization
is
a
key
focus.
Access
to
green
power,
greener
fuels,
and
lower-carbon
fuels
is
important
for
our
customers,
and
that
access
is
seen
as
a
key
enabler
of
their
broader
strategic
ambitions.

One
of
the
biggest
challenges
that
we’re
facing
in
the
UK,
in
terms
of
our
net-zero
trajectory,
is
how
to
decarbonize
industrial
heat,
which
is
required
for
all
sorts
of
different
manufacturing
processes.
Hydrogen
is
the
leading
candidate
to
help
to
decarbonize
the
creation
of
industrial
heat.
But
the
challenge
is
to
provide
that
clean
hydrogen
at
a
competitive
cost,
where
the
green
premium
that
manufacturers
and
big
industrial
users
pay
is
not
so
significant
that
it
becomes
unattractive.
So
ABP
is
working
with
a
number
of
innovative
hydrogen
producers
that
are
looking
at
different
technologies
to
reduce
the
cost
of
hydrogen
production,
which
will
then
feed
into
industrial
users,
so
that
they
can
decarbonize
their
heat
production.
It’s
a
really
exciting
journey,
where
we
can
look
to
make
hydrogen
more
cost-competitive
whilst
also
driving
the
net-zero
agenda.

S+B:
This
seems
like
a
radical
departure
from
the
role
that’s
typically
associated
with
ports.
Can
you
tell
us
more
about
ABP’s
evolving
remit
as
a
modern
port?
HARRIS:
The
fundamental
role
of
ports
has
been
the
same
throughout
history:
lifting
cargo
on
and
off
vessels,
and
getting
it
to
end-customers.
That’s
still,
by
far,
the
majority
of
our
business.
But
we
deploy
a
mixture
of
business
models.
We
have
land
assets
and
infrastructure
assets.
Customers
come
and
use
our
land,
and
then
they’ll
pay
us
to
rent
it,
so
that’s
basically
a
landowner
model.
But
we’re
also
an
infrastructure
business,
because
our
customers
use
our
cranes,
our
quaysides,
our
jetties
and
marine
infrastructure,
and
sometimes
they
will
operate
the
terminals.

To
meet
the
needs
of
our
customers,
we’ve
broadened
our
business
model
from
facilitating
and
enabling
the
import
and
export
of
cargo
to
also
include
enabling
the
energy
transition.
It
doesn’t
mean
that
we’re
not
focused
on
trade
anymore:
that
will
always
be
the
foundation
of
our
business.
And,
really,
[these
new
business
models]
are
just
an
expansion
of
what
we’re
trying
to
do
by
looking
at
the
energy
transition
and
how
we
support
hydrogen,
carbon
capture
and
storage
[CCS],
and
offshore
wind,
for
example.

S+B:
How
are
you
leveraging
your
existing
assets
to
expand
your
business
models?
HARRIS:
There
has
been
a
business
shift
at
ABP
toward
an
increased
focus
on
land
assets.
We
see
this
as
part
of
a
broader
adjustment
in
the
industrial
landscape
of
the
UK,
where
there’s
a
shift
toward
those
low-carbon
infrastructure
types—hydrogen,
offshore
wind,
or
manufacturing
facilities
for
CCS.

Over
the
last
few
years,
we’ve
seen
an
increase
in
manufacturing
taking
place
at
our
ports.
A
great
example
of
that
is
Siemens
Gamesa’s
Green
Port
Hull
[GPH]
offshore
wind
[turbine]
blade-manufacturing
facility,
located
at
the
Port
of
Hull.
That’s,
by
far,
the
biggest
example
of
offshore
wind
manufacturing
in
the
UK,
using
state-of-the-art
technology.
Since
the
project
became
operational
at
our
port
in
2016,
GPH
has
supported
both
growth
in
the
UK
offshore
wind
sector
and
the
broader
European
deployment
of
offshore
wind.

Likewise,
we’re
seeing
that
manufacturers
want
to
be
located
at
the
heart
of
large
industrial
ecosystems,
including
our
ports
in
the
Humber
region
of
the
UK,
in
South
Wales,
in
Southampton,
and
in
East
Anglia.
We
see
the
use
of
our
land
beside
the
water
as
a
critical
driver
for
us
in
terms
of
attracting
investment
and
manufacturing,
which
brings
with
it
jobs
and
investment
in
coastal
communities.

Ports
are
also
perfect
locations
to
test
next-generation
technologies.
At
the
Port
of
Southampton,
we
worked
with
Verizon
to
deploy
the
first
private
5G
network
on
an
industrial
site
in
the
UK.
[Our
initiatives]
are
really
focused
on
industrial,
internet
of
things
use
cases.
And
one
great
example
of
that
is
how
we
work
with
our
automotive
customers
that
are
bringing
vehicles
into
the
UK
market.
With
better
5G
connectivity,
we
can
use
our
terminal
operating
systems
to
optimize
the
path
of
the
vehicles
from
the
ship
or
to
the
storage
location,
based
on
either
time
or
cost,
and
now,
carbon.
Having
better
5G
connectivity
really
makes
a
difference
not
only
to
supply
chain
cost
reduction
but
also
to
CO₂
reduction.

S+B:
Can
you
tell
us
about
ABP’s
approach
to
its
own
climate
change
challenges?
HARRIS:
We
can’t
credibly
talk
about
enabling
the
energy
transition
without
taking
care
of
our
own
house
when
it
comes
to
sustainability.
There
are,
inevitably,
a
number
of
challenges
that
we’ll
face
over
the
next
ten,
20,
30
years.
Rising
sea
levels
are
certainly
high
among
them,
and
that’s
one
of
our
biggest
long-term
risks.
So,
we’re
making
sure
that
our
quay
walls
are
the
right
height
to
protect
against
floods
and
storm
surges.
We
also
need
to
work
with
public
sector
authorities
around
broader
flood
defenses
and
support
them
in
their
investments.

As
part
of
our
sustainability
strategy,
we
have
an
operational
net-zero
target
of
2040.
One
of
the
ways
we
are
pursuing
this
goal
is
to
invest
in
solar
energy
generation.
ABP’s
ports
have
a
lot
of
warehouses
with
roof-mounted
solar
panels,
to
optimize
the
use
of
space
for
renewable
energy
generation.
Alongside
onshore
wind
turbines,
we
have
32
megawatts
of
installed
capacity
for
clean
energy
generation
around
our
ports,
and
that
reduces
our
reliance
on
the
UK’s
national
grid
and
allows
us
to
use
cleaner,
cheaper
power.
In
addition,
our
customers
can
take
advantage
of
that
cleaner,
cheaper
power
at
our
ports:
We
own
the
local
grid
around
our
port
assets.
Many
of
our
ports
are
large-scale
industrial
sites
reaching
over
1,000
acres
in
size.
So,
we
sell
power
to
our
tenants
and
our
customers
on
those
port
sites.

S+B:
With
sustainability
playing
a
greater
part
in
business
strategy,
we’re
seeing
C-suite
roles
evolve.
Can
you
tell
us
a
bit
about
your
role,
and
why
ABP
has
decided
to
unite
strategy
and
sustainability
in
one
office?
HARRIS:
There
are
three
elements
to
my
role.
Firstly,
I
lead
on
corporate
strategy
development
and
implementation.
This
goes
hand
in
hand
with
developing
and
delivering
our
sustainability
strategy.
And
then
a
new
piece
of
my
role,
one
that
crosses
both
strategy
and
sustainability,
is
taking
the
first
steps
into
innovation
and
supporting
start-up
ventures.
This
is
a
new
commercial
model
we’re
looking
to
explore—to
make
sure
that
we
can
support
the
changing
needs
of
our
customers
as
the
energy
transition
takes
hold
and
as
decarbonization
becomes
the
norm
for
the
UK
economy.

Sustainability
is
inherent
in
our
business
model and
our
commercial
focus,
because
all
of
our
major
customers
are
either
challenged
by
the
decarbonization
imperative,
seeking
to
reduce
emissions
and
pivot
their
business
to
a
cleaner
future,
or
they’re
looking
to
scale
their
clean
energy
initiatives,
which
requires
a
lot
of
investment
infrastructure
enablers—which
we
can
help
provide.
Our
coverage
across
those
different
segments
of
the
UK
economy
means
that
our
role
in
enabling
the
energy
transition,
and
broader
sustainability
objectives,
is
massive.

S+B:
Tell
us
about
ABP’s
Energy
Ventures
Accelerator.
How
did
the
idea
for
this
climate
tech
start-up
platform
first
take
shape?
HARRIS:
It’s
gone
from
a
seed
of
an
idea
around
corporate
venturing
to
a
groupwide
strategy
anchored
in
using
our
land
more
effectively
and
supporting
growing
green
energy
markets
such
as
hydrogen
and
offshore
wind.
We
know
who
the
established
players
are
in
those
markets,
but
we’d
also
like
to
explore
who
the
emerging
players
are
and
how
we
can
work
with
them.
[Start-ups]
don’t
necessarily
have
the
balance
sheet
strength
to
be
a
traditional
ABP
customer,
because
we
look
to
sign
ten,
15,
20-plus-year
contracts.
They
can’t
necessarily
commit
to
that
length
of
contract.
So,
we
needed
to
come
up
with
a
different
commercial
model
in
order
to
work
with
those
types
of
start-ups—moving
into
commercial
scale
operations
and
looking
to
really
commercialize
the
products
that
they’re
manufacturing.

S+B:
Give
us
an
overview
of
the
accelerator.
What
types
of
technology
solutions
are
you
zeroing
in
on?
HARRIS:
The
Energy
Ventures
Accelerator
is
a
12-month
program
to
identify
the
highest-potential
energy
transition
start-ups
in
the
hardware
space.
Our
existing
customers—steelworks,
oil
refineries,
cement
works—are
looking
to
decarbonize,
and
they
need
technology
and
these
hardware
solutions
to
get
there.
And
we
want
to
build
relationships
with
the
big
players
of
the
future:
the
start-ups
that
will
become
scale-ups
that
will
become
fully
established
industrial
players.
Our
thesis
is
that
our
existing
customers
will
also
be
the
start-ups’
customers.
So,
we’re
looking
to
attract
the
best
and
brightest
international
start-ups
to
come
to
our
ports
to
leverage
our
land
and
infrastructure
assets,
and
also
to
meet
our
customer
base
and
meet
the
local
stakeholders,
local
government,
local
councils,
and
local
enterprise
partnerships.

We’re
working
with
Plug
and
Play,
a
large
Silicon
Valley–headquartered
innovation
platform
and
VC
investor;
but
they
don’t
just
do
software—they’re
also
focused
on
hard
tech
deployment.
The
Energy
Ventures
Accelerator
is
all
about
hardware.
It’s
not
SaaS
[software
as
a
service]
solutions
or
AI.
This
is
about
physical,
tangible
products
being
manufactured,
like
offshore
wind
components.
There
are
over
65,000
start-ups
in
Plug
and
Play’s
global
network.
They
have
a
window
into
a
whole
different
world
than
we’re
accustomed
to
working
in,
and
so
they
can
help
us
broaden
our
reach.

S+B:
Give
us
an
example
of
how
these
sorts
of
partnerships
might
work.
HARRIS:
One
good
example
of
ABP
working
with
start-ups
to
support
innovative
solutions
is
when
we
worked
with
Terberg,
which
manufactures
terminal
tractors.
They
wanted
to
test
hydrogen
propulsion
units
within
their
terminal
tractors.
So
we
worked
with
them
and
with
Air
Products,
a
customer
of
ours,
to
trial
these
terminal
tractors.
It
went
really
well,
and
our
staff
and
employees
tested
the
fuels,
using
hydrogen
versus
diesel.
And
we’re
going
to
do
a
lot
more
of
that,
where
we’re
working
with
early-stage
businesses.

We’re
looking
at
a
few
different
start-up
collaboration
models.
On
the
one
hand,
there’s
pilots
and
proof-of-concepts,
through
which
start-ups
can
test
their
technology
at
our
port
sites,
also
working
with
our
existing
customers
to
trial
real-world
applications.
On
the
other,
we
might
take
equity
stakes
in
start-up
businesses
in
exchange
for
discounted
leases
and
commercial
support.
But
we
could
also
look
at
special-purpose
vehicles—companies
set
up
specifically
to
build
a
product
in
one
of
our
ports,
and
then
we
do
a
revenue-sharing
agreement,
for
example.

We
also
provide
go-to-market
support,
connecting
start-ups
with
our
customers
and
with
the
broader
industrial
scene,
especially
in
places
like
the
Humber
and
South
Wales.
Part
of
those
investments
could
be
cash-based.
And
then
there
are
other
models,
like
a
go-to-market
partnership,
where
ABP
plus
the
start-up
can
offer
solutions
to
shipping
lines,
for
example,
to
help
decarbonize
their
operations.

S+B:
Fast-forward
ten
years,
when
these
new
projects
and
pilots
will
have
had
a
chance
to
develop.
What
will
ABP’s
port
operations
and
business
look
like?
HARRIS:
There’ll
be
at-scale
deployment
of
carbon
capture
on
large
industrial
units
around
our
ports.
That
captured
CO₂
will
be
used
for
alternative
fuels—e-fuels,
synthesized
hydrogen,
and
CO₂
that
supports
low-carbon
[maritime]
shipping
through
e-methanol
and
low-carbon
aviation
through
sustainable
aviation
fuel.

Our
customer
base
will
be
more
diverse.
Our
existing
customers
will
have
made
huge
progress
on
their
decarbonization
journeys
and
will
be
joined
by
new
types
of
customers
at
our
ports—big
hydrogen
companies,
floating
offshore
wind
developers
and
manufacturers.
I
see
our
ports
as
focal
points
for
a
really
vibrant,
dynamic
mix
of
medium-sized
companies
that
are
growing
and
that
are
really
innovating,
together
with
large
players
that
are
also
innovating
in
order
to
decarbonize
their
operations.
I
think
ports
are
going
to
be
a
real
center
of
gravity
for
the
industrial
energy
transition,
and
so
all
the
investment
that
we’re
making
and
all
the
investment
that
our
customers
will
make
on
top
of
that
is
going
to
make
a
really
big
impact
on
net
zero
in
the
UK.