The Panama Canal will open a new transit slot exclusively for low-carbon emissions vessels this fall as the trade artery reaffirms its dedication to achieving net-zero carbon emissions by 2050.
As of Oct. 5, the Panama Canal Authority (ACP) will implement the first phase of a weekly “net-zero slot” for Neopanamax vessels, which are larger container ships that have a maximum length of 1,215 feet and a 44-foot draft.
This slot will not be offered through an auction but through a selection process during the period held between 30 and 15 days before the transit date. The slot will be allocated to vessels based on cargo condition and capacity. Cargo-laden vessels and those with larger tonnage capacity will have priority, the ACP says.
Container ships represented 23 percent of transits throughout the Panama Canal in February, the most among all vessel categories.
They already have initial booking and transit priority through the canal compared to their counterparts like dry bulk carriers and chemical tankers, which enabled them to largely circumvent many of the long queues caused by the months-long drought that took place throughout the second half of 2023 into early 2024.
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The new slot would benefit container shipping giants ordering more dual-fuel vessels for their fleet, and is designed to further push these carriers toward their decarbonization initiatives, according to the ACP.
“By motivating investment in vessels capable of using low-carbon fuels and energy-efficient technologies, we are recognizing and rewarding our clients who are leading the transition toward a more sustainable future, while we await the development of regional infrastructure and logistics that will allow us to make steady progress toward global decarbonization goals,” said Ilya Espino de Marotta, the ACP’s deputy administrator and sustainability officer.
Vessels that can gain access to the net-zero slot will be able to choose the transit date within the week offered and have a guaranteed transit window of 24 hours.
The first phase will accommodate vessels equipped with dual-fuel engines that use fuel with a carbon intensity of less than 75 grams of carbon dioxide equivalent per megajoule—a unit used to measure the carbon intensity or greenhouse gas emissions associated with producing and consuming a fuel or activity—from extraction to combustion.
Specifications for a second phase are planned for 2026 and will be announced at a later date. Vessels will have to submit a technology screening report that evaluates energy efficiency technologies applicable to the ship.
The announcement followed recent modifications to the canal’s long-term slot allocation (LoTSA) system, which is the auction process established last year for Neopanamax vessels to secure transit slots up to a year in advance.
Based on customer recommendations, starting April 27, the Panama Canal will introduce an option where LoTSA slots customers can request swaps and substitutions with each other.
As many as 38 vessels across Neopanamax and smaller Panamax ships pass through the canal daily.
The added net-zero slot and the LoTSA swap come as the Panama Canal itself remains the center of U.S. foreign policy concerns. The canal has been of interest to U.S. President Donald Trump, who has asserted that he wants to “take back” the canal over allegations of Chinese influence over the waterway.
Trump’s rhetoric likely had a hand in the sale of two of the ports on both sides of the canal, in which Hong Kong-based port operator CK Hutchison Holdings transferred majority ownership of the Balboa and Cristóbal hubs to an entity led by BlackRock that also includes Mediterranean Shopping Company (MSC).
That sale has caused an uproar in China and Hong Kong alike, with Chinese President Xi Jinping reportedly furious over the deal’s occurrence.
Nevertheless, a Bloomberg report Wednesday indicated that the Hutchison-BlackRock deal is moving ahead as scheduled, with the parties still aiming to sign an agreement as planned by April 2.
Both deals within the larger $23 billion transaction—the agreement over the Panama ports and the wider sale of 41 other CK Hutchison ports—are progressing, the publication said.
Business tycoon Li Ka-Shing, the chairman of CK Hutchison and Hong Kong’s richest man, may be the fall guy as the ports shift ownership.
According to Bloomberg, Beijing has instructed state-owned companies to pause new deals with Li and his family. Existing tie-ups are not affected. Under the directive, state enterprises wouldn’t immediately get approval for business activities linked to Li.
A report from the South China Morning Post disputes this directive as “not true.”
China’s primary antitrust regulator is looking into the ports sale for potential national security and antitrust violations.