Do Sustainable Investments in Ports Improve Air Quality in Port Cities? Evidence from European Ports

Abstract

Ports are drivers of economic development, but at the same time, they create significant environmental pressures for port cities. Sustainable port development is an important aspect of urban and logistical planning in European coastal cities, helping to improve local air quality, the quality of life in port cities, and impact sustainable economic development. This research aims to analyze the relationship between investments in sustainable practices implemented in ports and air quality in port cities, based on a sample of five European ports observed from 2013 to 2024. The Fixed Effects (FE) estimation model was used as the estimation technique. The results indicate that higher investments in sustainable practices are associated with lower NO₂ concentrations in port cities. This highlights the significance of sustainable investments in improving air quality in port cities while advancing urban sustainability and contributing to economic development. This paper contributes to understanding the role of ports as an important link in the urban energy transition and provides guidelines for further integration of environmental policies into port and city planning.

1. Introduction

Ports play an important role in global trade and economic development, but they are also significant sources of environmental externalities. High levels of pollutant emissions occur in coastal and urban areas due to port activities and related road and rail transport. A large share of emissions from the maritime sector is concentrated near coasts and cities, increasing local populations’ exposure to air pollution, which negatively affects health and quality of life [1,2,3,4].

Ports are increasingly recognized as important actors in the energy transition and the decarbonization of maritime transport. Environmental policies are putting greater pressure on ports to adapt their strategic plans toward environmental sustainability, especially in terms of emissions reduction and energy efficiency [5,6]. In response to these challenges, European ports are progressively adopting sustainable practices in their operations. They aim to improve air quality by reducing emissions from port activities, increasing energy efficiency, and complying with European and international regulations. Sustainable port practices include implementing shore power systems, electrifying port operations, using renewable energy sources, developing alternative fuels and technologies, and digitizing and automating processes [6,7]. From an economic perspective, investments in sustainable practices serve as mechanisms for achieving sustainable economic development because they help reduce negative externalities, increase operational efficiency, and strengthen the long-term competitiveness of ports.

Although sustainable practices aim to improve air quality, their effectiveness varies. When successfully implemented, these practices can enhance operational efficiency, productivity, and service quality; therefore, generating benefits beyond environmental performance. Shore power systems and the electrification of port operations offer significant benefits [8,9,10,11]; however, high investment costs, technical limitations, and specific port characteristics can prevent the adoption of certain sustainable practices [12,13]. Additionally, introducing hydrogen infrastructure offers substantial potential for ports as energy hubs but presents institutional, technical, and security challenges related to implementation [14,15].

A growing body of literature examines the impact of port activities on the environment and the role of sustainable initiatives introduced in ports to reduce negative environmental effects. However, empirical evidence directly linking investments in sustainable port practices to changes in air quality in port cities remains limited. It is therefore important to examine whether observed reductions in NO₂ concentrations in port cities occur alongside increasing investments in sustainable port practices or whether they primarily reflect the effects of regulatory changes, technological progress, and broader decarbonization trends. Several factors can influence the reduction in NO₂ concentrations, including regulatory measures, transport decarbonization processes, and temporary disruptions such as those experienced during the COVID-19 pandemic. Therefore, this research does not attempt to establish a strict causal relationship between investment in sustainability in ports and emission reductions, but instead examines whether a decrease in NO₂ levels coincides with increased investment in sustainable practices in ports. The aim of this research is to analyze the relationship between investments in sustainable practices implemented in ports and air quality in port cities, particularly NO₂ concentrations. Empirical analysis of investments in sustainable port practices contributes to the literature on sustainable development by highlighting how environmental initiatives can be implemented without compromising economic efficiency. Through a comparative analysis of selected European ports, differences in the intensity, dynamics, and efficiency of sustainable investments in ports are identified. The remainder of the paper is organized as follows: Section 2 provides a theoretical framework; Section 3 describes the materials and methods; Section 4 presents research results and discussion; and Section 5 offers concluding remarks.

2. Theoretical Framework

This section reviews the literature on the impact of port activities on the environment and the development of sustainable port practices. The chapter also presents an overview of sustainable initiatives implemented in selected European ports, which form the empirical context of this paper.

2.1. Environmental Impact of Port Activities and Sustainable Port Development

Ports are essential nodes in domestic and international trade, serving as key points in the maritime transport of goods and passengers. Their impact on economic growth has been proven; therefore, continued investment in port infrastructure, technologies, and innovations is necessary to ensure long-term sustainable development [16]. Port activities are associated with a wide range of environmental externalities, particularly those related to air pollution. Most port emissions are produced by ships while they are in port, accounting for the largest share of air pollution in port cities. Additional emissions come from port machinery, freight vehicles, and other energy-intensive activities, which significantly affect air quality in port cities [7]. Numerous studies indicate that port-related emissions are spatially concentrated, burdening surrounding urban areas and increasing local populations’ exposure to polluted air [1,2,3,4]. Urban research emphasizes that large transport and logistics hubs significantly influence the spatial structure of cities and the concentration of economic activities. Therefore, their long-term sustainability is an essential part of the discussion on sustainable urban development [17].

Nitrogen dioxide (NO₂) is relevant in the context of ports because it is associated with diesel engines used in maritime transport. Scientific studies confirm that ship and port activities significantly contribute to elevated NO₂ concentrations, especially through emissions released during ship maneuvering and berthing in urban areas near ports [18,19,20]. The rise in environmental pressures and regulatory requirements has made the concept of green ports an important topic in the scientific literature. Green ports are defined as ports that prioritize environmental sustainability and adopt practices to minimize their ecological footprint [21]. Port authorities are increasingly using regulatory, market, and management tools to encourage emissions reductions [22]. In addition to financial incentives such as differentiated port dues and environmental rebates, port authorities support sustainability through a broader range of governance instruments. These include facilitating cooperation among maritime, logistics, and energy stakeholders and supporting the development of green shipping corridors. They also promote the coordination of activities for the decarbonization of industry in port clusters and the introduction of environmental and operational standards in ports. Through these mechanisms, ports serve not only as infrastructure providers but also as promoters and coordinators of a broader transition to maritime transport with reduced environmental impact [12,23,24]. Literature indicates that investments in sustainable port practices, such as electrification of port equipment, shore power supply for ships, and the adoption of cleaner technologies, have the potential to reduce local emissions and improve air quality in port cities [25,26]. Merk [12] notes that such investments are especially important in urban ports, where residents are more exposed to lower air quality. Therefore, green ports are increasingly seen as important contributors to a sustainable urban and energy transition. From an economic perspective, adapting business strategies in the maritime sector is essential for maintaining competitiveness and financial stability, with digitalization and strategic innovation playing important roles [27].

A significant portion of the literature examines the role of ports in the energy transition through the electrification of operations and the use of renewable energy sources. Shore power systems reduce emissions from ships’ auxiliary engines by allowing ships to connect to the power grid while at berth [28]. Scientific research confirms that implementing shore power systems reduces pollutants in port areas [8,9,10,11]. Ports are also increasingly planning and investing in renewable energy generation, such as solar and wind power plants [29,30,31,32]. More recent research addresses the development of hydrogen infrastructure and highlights its potential to reduce emissions from port operations. At the same time, ports are seen as energy platforms for the production, storage, and distribution of hydrogen [14]. Chen et al. [33] indicate that ports play an important role in international hydrogen trade, but their readiness in institutional, infrastructural, and regulatory frameworks remains limited. Additionally, research on hydrogen storage systems in ports notes that different storage technologies present significant technical, environmental, and safety challenges [15]. In this context, recent studies emphasize the importance of using integrated energy models in ports that combine multiple renewable energy sources [13,34,35,36,37].

2.2. Sustainable Practices in Selected European Ports

European ports are increasingly adopting sustainable practices to reduce negative environmental impacts. Moreover, they are required to comply with European and international regulatory frameworks. Sustainable practices include reducing pollutant emissions, increasing energy efficiency, introducing renewable energy sources, and electrifying and digitizing port operations [6,7]. This section analyzes selected European ports that have implemented various sustainable practices, which serve as the basis for the quantitative analysis presented later in the paper.

The Port of Rotterdam (Netherlands) is one of the leading examples of sustainable practices among European ports. As the largest port and industrial cluster in Europe, it plays a significant role in the energy transition. One of the most important measures in the Port of Rotterdam is the development of infrastructure for the capture and storage of carbon dioxide (CO₂). The Porthos project, a joint initiative involving the Port of Rotterdam Authority, will enable the capture of CO₂ from industrial plants in the port area, its transport, and permanent storage in empty gas fields under the North Sea [38,39]. Additionally, the Port of Rotterdam is introducing a shore power system that allows ships to switch off their engines while at berth, reducing emissions and noise levels in the port area [40]. The port is also developing as a key European hydrogen hub, whose goal is to stimulate the energy transition and reduce CO₂ emissions in industry and transport [41]. The Port of Rotterdam uses economic incentives, offering discounts on port dues to ships with better environmental performance, and encourages the monitoring of their own noise [42]. In addition to financial incentives, the port also facilitates cooperation within industrial clusters and supports circular economy initiatives within the port area. These initiatives aim to repurpose waste, biomaterial, hydrogen, and CO₂ as inputs for new industrial processes. The port supports projects for recycling plastics and batteries, as well as the reuse of industrial materials [42,43].

Unlike the port of Rotterdam, where the main port and industrial complexes are spatially separated from the city, the port of Hamburg (Germany) operates within the city limits. This adds an extra dimension to sustainable practices regarding air quality and the environment. One of the most important measures in the Port of Hamburg is the introduction of a shore power system, which helps reduce emissions of harmful gases and noise [44]. The Port of Hamburg implements initiatives to develop sustainable energy hubs that integrate new energy systems, including hydrogen and renewable energy sources [45]. Additionally, it is developing a network of hydrogen pipelines through the “Hamburg Hydrogen Industry Network” (HH-WIN) project. The goal of this project is to establish a hydrogen pipeline infrastructure that connects the production, import, and distribution of hydrogen with industry in the port and beyond [46].

The Port of Gothenburg (Sweden) highlights shore power systems as a key measure for implementing sustainable practices. The port has developed the Green Cable project, which enables tankers to connect safely and cost-effectively to electricity at berth [47]. In addition, the Port of Gothenburg is developing infrastructure for alternative and low-carbon fuels, aiming to become a hub for methanol supply and storage in Northern Europe and to develop a value chain for renewable methanol. It is also promoting the use of LNG as a transitional solution in the decarbonization of maritime transport [48]. The port’s sustainability efforts are further strengthened through the Tranzero initiative, which aims to reduce CO₂ emissions by 70% by 2030 [49]. The port provides economic incentives through discounts on part of the port dues for ships with better environmental performance, as well as additional incentives linked to the share of fossil-free fuel in annual consumption [50].

Another relevant example of sustainable practices in European ports is the Port of Barcelona (Spain), which promotes sustainability through a strong connection with the urban environment of the city of Barcelona. Like the previously mentioned ports, the Port of Barcelona prioritizes the implementation of a shore power system as a key sustainability measure. This system is being introduced as part of the Nexigen project, which aims to decarbonize port activities and reduce the impact of maritime traffic on the city’s air quality [51]. Additionally, the Port of Barcelona promotes the use of alternative fuels in maritime traffic. It develops projects related to hydrogen and other alternative fuels, while also encouraging the use of LNG as a transitional solution for reducing emissions [52]. Alongside energy measures, the Port of Barcelona undertakes environmental protection activities, including the management of air, water, and soil quality, as well as noise reduction. The port strives to integrate into the urban space and minimize the negative impacts of its activities on the local population [53].

The Port of Valencia (Spain) aims to achieve climate neutrality by 2030. The Valenciaport 2030 strategy includes greenhouse gas emission reduction, energy efficiency, digitalization, and environmental protection [54]. The shore power system is one of the most important decarbonization measures. At the same time, the port is investing in renewable energy production, particularly through the installation of photovoltaic systems on the roofs of terminals and port facilities [55]. The Port of Valencia is also developing hydrogen-related projects, with the H2Ports project testing the use of hydrogen in port equipment [56]. Furthermore, it undertakes various other activities aimed at environmental protection, such as monitoring air and water quality, waste management, and biodiversity conservation.

The analysis of selected European ports shows that ports are increasingly adopting sustainable practices, with approaches varying according to spatial, economic, and infrastructural characteristics. The introduction of shore power systems, the development of alternative fuels, and increased energy efficiency are common features in the analyzed ports. At the same time, individual ports are implementing specific solutions, such as infrastructure for CO₂ capture and storage in the port of Rotterdam, hydrogen networks in the port of Hamburg, a methanol supply and storage hub in the port of Gothenburg, and the integration of ports into the urban environment in the ports of Barcelona and Valencia. Sustainable practices have the potential to reduce emissions; however, differences in the type and intensity of investments highlight the need for further analysis.

Previous research has examined the relationship between port activities and air quality in port cities, but empirical evidence linking investments in sustainable practices to changes in air quality in port cities remains limited. Many existing studies focus on individual ports, short analysis periods, or specific technologies. This paper contributes to the literature in three ways. First, it empirically examines the relationship between investments in sustainable port practices and air quality in port cities. Second, it applies a panel analysis over a relatively long period (2013–2024) covering several European ports. Third, it provides a comparative analysis of the dynamics of investments in sustainable practices across several large European ports and their association with changes in air quality levels.

3. Materials and Methods

This section describes the methodological framework used to analyze sustainable practices in ports and their relationship with air quality in urban areas. The methodology provides a sample and data description, and outlines the econometric approach based on the fixed effects (FE) model used in the analysis.

3.1. Sample Description

A representative sample of European container ports was selected to analyze the implementation of sustainable practices and their contribution to improving air quality. The choice of ports was based on several criteria. The first was the availability of consistent panel data for the period 2013–2024. The second was the inclusion of ports classified as leading European ports that actively implement sustainable practices. The last criterion was that the ports operate within the regulatory framework of the European Union (EU), ensuring a comparable political environment regarding environmental standards and decarbonization strategies. Therefore, the study sample consists of five European ports: Rotterdam, Hamburg, Gothenburg, Barcelona, and Valencia. These ports represent diverse geographical locations, management models, and approaches to energy transition. Rotterdam and Hamburg are large industrial ports that combine shore power systems and hydrogen technologies [40,41,44,46,57]. Gothenburg aims for climate-neutral freight transport and plans to reduce CO₂ emissions by 70% by 2030 through expanding shore power and using fossil-free fuels [49]. Barcelona and Valencia, as major Mediterranean port centers, are focusing their decarbonization efforts on the development of hydrogen-related projects and on photovoltaic systems [58,59]. The diversity of the selected ports provides a solid basis for identifying best practices and for analyzing sustainable port development across different European regions.

3.2. Data, Variables, and Descriptive Statistics

To capture the dynamics of sustainable investments in the selected ports, the quantitative analysis uses panel data from 2013 to 2024. Data on total investments were collected from the ports’ official annual financial reports. For each European port selected, the share of investments in sustainable practices within total investments was estimated. This estimation combined the analysis of official annual port reports, reports from European and international institutions, and literature on the energy transition in the port sector. Most financial reports do not explicitly detail investments in sustainable practices, also known as green projects. Therefore, this research applied an assessment model based on time trends and port type. For each analyzed port, the total investment level was identified, and the percentage share attributable to investments in sustainable practices was then estimated. The estimated investments in sustainable practices are calculated as follows:

$$\widehat{ {Invest}_{it}}={TotalInvest}_{it}\times {\theta }_{it}$$

(1)

Invest_it = estimated investments in sustainable practices for the port i and time t,

TotalInvest_it = total investments from official annual reports for the port i and time t,

θ_it = estimated share (%) of investments related to sustainable practices for the port i and time t.

Expenditures related to environmental protection and decarbonization, such as shore power, renewable energy, hydrogen, carbon capture and storage, and digitalization, are aggregated to approximate the level of sustainability-oriented investments. Although this approach does not provide exact observed values for sustainable investments, it allows for the construction of a consistent time series that captures the approximated amounts invested in sustainable practices.

The starting point for estimating the percentage share of investments in sustainable practices is the findings of the European Sea Ports Organization [6,60] and the International Transport Forum [61]. These sources indicate that from 2013 to 2016, European ports allocated an average of 10–15% of their investments to sustainability projects. After 2017, this share rose to approximately 20–30%, as more investments were made in coastal electrification, renewable energy sources, hydrogen infrastructure, and decarbonization of logistics processes. These trends are confirmed by the ESPO Environmental Report 2023 [6], which states that the largest European ports have significantly increased the share of “green” investments in the last decade. This approach enables the creation of a consistent set of panel data on investment in sustainable practices, despite the lack of standardized reporting and consolidated data on such investments in port financial statements.

The share of sustainable investments in each analyzed port (Rotterdam, Hamburg, Gothenburg, Barcelona, and Valencia) was aligned with specific strategic documents and the respective phases of each port’s energy transition. The Port of Rotterdam plays a leading role in implementing hydrogen and electrification projects [62], with the share of sustainable investments increasing from 15% to 30% during the period 2013–2024. For Hamburg, based on reports from the Port of Hamburg [63] and Hamburger Hafen und Logistik AG [64], values ranging from 15% to 25% were used. For Gothenburg, an estimated share of 20% to 30% was applied [65,66,67]. In the southern European ports of Barcelona and Valencia, based on the Port of Barcelona Nexigen Plan and the Valencia 2030 zero emissions strategy, an increase from 10% to 30% in investment in sustainable practices was estimated [51,54,68,69]. The resulting variable should, therefore, be interpreted as an approximate indicator of the intensity of investments in sustainable practices rather than as an exact accounting measure.

Table 1. Sample ports and estimated range of investment in sustainable practices.

Port	Estimated Range of Investment in Sustainable Practices (%) from 2013 to 2024	Data Sources
Rotterdam	15–30%	Port of Rotterdam annual reports [62]
Hamburg	15–25%	Port of Hamburg annual reports [63]; Hamburger Hafen und Logistik AG [64]
Gothenburg	20–30%	Port of Gothenburg annual and environmental reports [65,67]; World Port Sustainability Program [66]
Barcelona	10–30%	Port of Barcelona annual reports [69]; Port of Barcelona Nexigen Plan [51]
Valencia	10–30%	Port of Valencia annual reports [68]; Port of Valencia 2030 zero emissions strategy [54]

Note: The reported values represent estimated ranges of investments in sustainable practices within total port investments based on the analysis of annual financial reports, port strategic documents, and institutional reports (e.g., ESPO, International Transport Forum). These estimates reflect general trends in sustainability-oriented investment activity rather than exact accounting values.

shows the ports used in the study, the estimated ranges of sustainability-related investment shares used to construct the investment variable for each port, and their corresponding data sources, while the exact annual shares are reported in Appendix A.

To link overall investment in sustainable practices to environmental impacts, the quantitative analysis uses data on nitrogen dioxide (NO₂) concentrations as the main indicator of air quality in port cities. NO₂ serves as a proxy for local air quality conditions related to port operations and hinterland traffic, as it is primarily associated with emissions from diesel engines used on ships, port machinery, and freight traffic. PM2.5 was also included in the analysis as an additional air quality indicator to assess the robustness of the results. Average annual NO₂ and PM2.5 concentrations for the observation period 2013–2024 were obtained from the European Environment Agency database [70].

The econometric model includes a set of control variables: the level of port activity, economic activity in the port area, and meteorological conditions. The level of port activity is measured using freight traffic, defined as the gross weight of goods handled in ports. Data on freight traffic were taken from the Eurostat database [71]. For capturing the economic activity in the port area, the GDP per capita variable at the NUTS 3 level (Nomenclature of Spatial Units for Statistics), expressed in purchasing power standards (PPS), was used and obtained from the Eurostat database [72]. This variable accounts for differences in local economic conditions and the level of economic activity in the port area, which may affect the demand for freight traffic and, consequently, the level of emissions. The model also includes variables representing meteorological conditions because they can significantly affect the dispersion and concentration of pollutants in the air. Data for average temperature and wind speed were obtained from the Meteostat database for the respective port cities [73]. The resulting panel data combines information on air quality indicators, investment in sustainable practices, port activity, local economic conditions, and meteorological factors, providing an empirical basis for analyzing the relationship between investment in sustainable practices and air quality in European port cities.

Table 2. List and explanation of the variables.

Variable	Description	Measurement Unit
Dependent Variables
NO2	Annual mean value for NO2	µg/m3
PM2.5	Annual mean value for PM2.5	µg/m3
Control Variables
Invest	Investments in sustainable practices	EUR
Freight	Freight traffic in ports	1000 tons
GDPpc	Gross domestic product per capita	PPS (EUR, NUTS 3 level)
Temp	Average temperature	°C
Wind	Wind speed	km/h

presents the variables used in the empirical analysis along with their definitions and measurement units.

Before testing the model, descriptive statistical analysis was performed as well as a test for the presence of correlation. The descriptive statistics for the variables included in the model are presented in

Table 3. Descriptive statistics of the variables.

Variable	Number of Observations	Mean	Standard Deviation	Minimum	Maximum
NO2	60	26.31188	6.240949	13.61	37.19
PM2.5	59	11.30946	2.816193	5.37	16.514
Invest	53	2.41 × 107	2.34 × 107	2,318,607	9.63 × 107
Freight	60	136,160.4	145,269	34,372	431,809
GDPpc	57	40,850.88	14,122.82	22,000	78,000
Temp	55	13.74	3.576031	9.1	19
Wind	55	13.86545	1.919029	9.6	16.8

.

The average NO₂ concentration is 26.31 µg/m³, and the average PM2.5 concentration is 11.31 µg/m³. The level of investment in sustainable practices and freight traffic shows significant variation between ports and over the years. GDP per capita also varies significantly, indicating differences in economic activity. Meteorological variables show relatively moderate variation throughout the observed period. The number of observations differs slightly across variables due to missing data for some years.

Before testing the model, the correlation between the variables was tested. The correlation coefficients are shown in

Table 4. Correlation coefficients.

	ln NO2	ln PM2.5	In Invest	ln Freight	ln GDPpc	Temp	Wind
ln NO2	1.0000
ln PM2.5	0.7779	1.0000
ln Invest	0.0233	−0.1359	1.0000
ln Freight	0.3049	0.1250	0.7775	1.0000
ln GDPpc	0.0226	−0.1713	0.7050	0.4173	1.0000
Temp	0.0366	0.4004	−0.6521	−0.4650	−0.8072	1.0000
Wind	0.6327	0.5512	0.5179	0.6265	0.3693	−0.1204	1.0000

.

NO₂ and PM2.5 concentrations show a relatively high correlation, which is expected since they come from similar sources of air pollution. There is also a relatively high correlation between freight traffic and investments in sustainable practices. This suggests a higher level of investment activity in ports with greater traffic. In order to check potential multicollinearity among the independent variables, Variance Inflation Factors (VIF) were calculated based on the basic model specification. The average VIF is 3.03, and the individual values are below the usual thresholds, which indicates that multicollinearity is not significantly present in the model.

3.3. Econometric Approach

The research uses the Fixed Effects (FE) estimation model. The FE estimation treats individual-specific characteristics that remain constant over time as fixed parameters, so it controls for unobserved heterogeneity and concentrates on variation over time. In practice, it removes all time-invariant characteristics by transforming the data, typically by centering around the mean of each unit. It is appropriate when the individual effects are correlated with the explanatory variables [74]. The FE estimator is relevant for this research, which investigates how the gradual adoption of sustainable practices in container ports affects air quality in port cities. Ecological indicators change over time within each port, while fundamental port characteristics such as geographical location, sea depth, climatic conditions, or governance structure remain constant. The FE estimator leverages variations within the port, enabling year-on-year changes in environmental performance to be linked to changes in investment variables, such as the installation of offshore energy facilities, the expansion of offshore wind or solar capacity, the electrification of freight handling equipment, or the introduction of environmental charges. This isolates the impact of sustainability-related measures from unobserved, time-invariant port characteristics. The limitation of using the FE estimator is that it cannot estimate the effects of time-invariant variables, such as the geographical position of the port on major shipping routes, its natural depth, or its long-standing institutional framework, because it eliminates all cross-sectional variation [74]. Moreover, the FE estimator utilizes only the variation within each port over time and does not account for variation between ports, thereby not directly exploiting systematic differences in average environmental efficiency between ports. Standard errors were estimated with clustering at the port level to account for potential correlation of errors within the same port over time. Time effects are captured using a linear time trend variable, which allows examination of the long-term evolution of pollution levels over the sample period.

The research estimates six econometric models to assess the stability and robustness of the results. The variable investment in sustainable practices (Invest) is defined differently across the first five model specifications in order to test the robustness of the relationship between sustainable investments and NO₂ emissions. The sixth model introduces PM2.5 as a dependent variable in order to test the robustness of the results using an alternative air quality indicator.

Model 1 uses the lagged value of investments in sustainable practices to address potential reverse causality between pollution levels and investments. If higher pollution levels occur, this may induce ports to increase investments in sustainable practices, which can lead to endogeneity. Therefore, the model uses lagged investment values to reduce the likelihood that current pollution levels influence current investment decisions. This approach also allows for a time lag in which the effects of investments in sustainable practices can be observed. The model includes control variables that reflect the level of port activity (Freight) and economic activity (GDPpc). A time trend is included to control for long-term changes in air quality levels that may result from technological progress or regulatory changes.

lnNO_2it = β₀ + β₁lnInvest_it−1 + β₂lnFreight_it + β₃lnGDPpc_it + β₄Trend_t + a_i + u_it 

(2)

lnNO_2it = the logarithmic value of concentration of NO₂ in the port i and time t,

lnInvest_it−1 = the logarithmic value of investments in sustainable practices in the port i and time t−1,

lnFreight = the logarithmic value of freight traffic in the port i and time t,

lnGDPpc = the logarithmic value of gross domestic product per capita in the port i and time t,

Trend = linear time trend

a_i = the unobservable time-invariant individual effects,

u_it = the relation error,

β1, β2, β3, β4 = the coefficients.

Model 2 uses a moving average as an alternative investment measure. This approach captures the cumulative effect of investments over time and mitigates possible short-term fluctuations in investment amounts.

Invest_it = MA(Invest_it)

(3)

In Model 3, investments are transformed using an adjusted logarithmic transformation. This allows the inclusion of observations that have very low or zero investment values. This approach provides an additional verification of the robustness of the results regarding different methods of measuring investments.

Invest_it = ln(Invest_it + 1)

(4)

In Model 4, the basic specification is expanded by including meteorological variables, specifically average temperature and wind speed. Meteorological conditions influence the dispersion and retention of pollutants in the atmosphere, which can affect pollutant concentrations. Therefore, these variables need to be controlled for in the analysis.

lnNO_2it = β₀ + β₁MA(Invest) + β₂lnFreight_it + β₃lnGDPpc_it + β₄Temp_it + β₅Wind_it + β₆Trend_t + a_i + u_it 

(5)

Temp_it = average temperature in the port i and time t,

Wind_it = wind speed in the port i and time t.

Model 5 presents investment as investment intensity relative to port activity. This provides a relative measure of investment in sustainable practices adjusted to the scale of operations of a particular port. This enables comparison of investment efficiency across ports of different sizes and traffic levels.

$${Invest}_{it}=\ln ({\displaystyle \frac{Invest it}{Freight it}})$$

(6)

In Model 6, the dependent variable is replaced with the logarithmic value of PM2.5 concentrations to test the robustness of the results using a different air quality indicator. This specification allows us to examine whether the relationship between sustainable investments and air quality remains consistent when an alternative pollutant measure is used.

lnPM2.5_it = β₀ + β₁lnInvest_it−1 + β₂lnFreight_it + β₃lnGDPpc_it + β₄Trend_t + a_i + u_it 

(7)

The logarithmic specification allows the coefficient to be interpreted as an elasticity. Investment in sustainable practices is expected to be negatively associated with NO₂ concentrations, which is consistent with theoretical expectations and the goals of green investments in ports. Freight traffic is expected to positively affect NO₂ concentrations since higher freight traffic is associated with more pollution. GDP per capita is expected to have a positive impact on NO₂ concentrations because higher economic activity is typically associated with greater transport intensity and industrial activity. Temperature may affect NO₂ concentrations through atmospheric chemical processes and pollutant dispersion, but the positive or negative effect is not defined. Wind speed is expected to have a negative effect on NO₂ concentrations because stronger winds can enhance the dispersion of air pollutants. The time trend is expected to have a negative effect on NO₂ concentrations since it shows long-term improvements in environmental regulations, technological progress and policies related to emission reductions.

4. Results and Discussion

This section presents the results of an econometric analysis examining the impact of investments in sustainable practices on air quality outcomes in the observed European ports.

Table 5. Results of the model testing.

	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6
Variables	ln NO2	ln NO2	ln NO2	ln NO2	ln NO2	ln PM2.5
ln Invest (t−1)	−0.053 **					−0.008
	(0.016)					(0.032)
ln Freight	0.025	0.099	0.158	0.136	0.243	0.619 **
	(0.188)	(0.177)	(0.153)	(0.166)	(0.146)	(0.214)
ln GDPpc	0.673	0.749	0.679	0.675	0.679	0.437
	(0.353)	(0.392)	(0.392)	(0.433)	(0.392)	(0.277)
Time trend	−0.073 **	−0.070 **	−0.066 **	−0.067 **	−0.066 **	−0.053 ***
	(0.017)	(0.016)	(0.017)	(0.017)	(0.017)	(0.007)
MA Invest		−0.102 **		−0.112 *
		(0.036)		(0.043)
Adj Invest			−0.085 **
			(0.030)
Temp				0.013
				(0.028)
Wind				−0.035
				(0.018)
Investment					−0.085 **
intensity					(0.030)
Constant	−2.886	−3.743	−3.980	−2.930	−3.980	−8.887 *
	(5.410)	(5.427)	(5.469)	(5.681)	(5.469)	(4.124)
Obs.	46	46	51	46	51	46
Within R2	0.874	0.882	0.835	0.893	0.835	0.665
No. of ports	5	5	5	5	5	5

Robust standard errors in parentheses; *** p < 0.01, ** p < 0.05, * p < 0.1. Notes: Standard errors are clustered at the port level. All models include port fixed effects.

presents the results of six model specifications examining the relationship between investment in sustainable practices and air quality in port cities. The coefficient of the investment in sustainable practices variable is negative and statistically significant in most specifications (Models 1–5). This indicates that higher investments in sustainable practices are associated with lower NO₂ concentrations. Data were analyzed using the statistical software Stata 15.

Model 1 uses lagged values of investments in sustainable practices. The results indicate a statistically significant negative relationship between sustainable investment and NO₂ concentrations. The coefficient implies that a 1% increase in sustainable investment in the previous year is associated with a decrease in NO₂ concentration, on average, by 0.053% in the current year, with statistical significance at the 5% level. In Model 2, a moving average is used to better capture the temporal effects of investments in sustainable practices. The coefficient of this variable is negative and statistically significant, indicating that a 1% increase in investments (measured by the moving average) is associated with a lower NO₂ concentration of about 0.102%, holding other variables constant. Model 3 uses investments transformed using an adjusted logarithmic transformation, and the results also show a negative and statistically significant effect of this variable on NO₂ concentration, which further confirms the robustness of the results. In Model 4, meteorological variables (average temperature and wind speed) are included to control for the influence of weather conditions on air quality. The investment variable, measured by the moving average of investments, is negative and statistically significant at the 10% level. The results indicate that a 1% increase in investments (measured by the moving average) is associated with a decrease in NO₂ concentration, on average, by 0.112%, assuming other variables in the model are held constant. Model 5 uses an indicator of investment intensity defined as the ratio of investment in sustainable practices and freight traffic. In this model, the coefficient remains negative and statistically significant, which indicates that greater investment in sustainable practices relative to port traffic is associated with lower NO₂ emissions. In Model 6, the robustness of the results is tested by using an alternative air quality indicator. The dependent variable in this model is the logarithmic value of PM2.5 concentration. The coefficient is not statistically significant, which is not entirely unexpected because PM2.5 reflects broader regional sources of pollution, while NO₂ is more closely associated with local traffic and port activities. In this model, freight traffic is positive and statistically significant, which indicates that higher freight traffic contributes to higher concentrations of PM2.5.

It is important to highlight the time trend variable, which has a negative and statistically significant coefficient in all models. The estimated coefficients for the time trend variable indicate that pollutant concentrations decrease by approximately 5–7% per year, holding other variables constant. This suggests that there is a stable, long-term trend of decreasing pollution levels over the observed period. This trend may be related to technological progress, stricter environmental regulations, and increased investment in sustainable practices. Overall, the results from all models confirm that there is a negative relationship between investment in sustainable practices in ports and NO₂ emission levels. Consistent findings across different model specifications and alternative investment measures confirm the robustness of these results.

The negative relationship between investments in sustainable practices and NO₂ concentrations can be explained by several mechanisms. Investments in sustainable port practices typically include electrifying port equipment, introducing shore power systems, improving energy efficiency, and adopting cleaner energy sources. These systems reduce emissions from berthing ships, cargo handling equipment, and port-related traffic activities. NO₂ emissions are strongly associated with diesel engines used in ships, port machinery, and trucks, so implementing sustainability-focused systems can improve air quality in port cities. It is also important to emphasize that the reduction in NO₂ concentrations may result from the combined effects of several factors, including investments in sustainable port practices, environmental protection regulations, technological progress, the decarbonization of transport, and temporary disruptions such as the COVID-19 pandemic.

Although the estimated annual impact of a sustainable investment on NO₂ reduction is relatively small, its cumulative effect over time can lead to significant reductions. This impact can be especially pronounced when combined with other measures. The delayed effect of sustainable investments indicates that it takes time to observe the results, specifically how investments in sustainable practices affect improvements in air quality. From a sustainable economic development perspective, the results indicate that improving a port’s environmental performance does not have to conflict with economic goals and can be achieved alongside long-term investments in sustainable practices.

The results of the study align with previous research highlighting that ports are significant sources of local air pollution, but also demonstrate the potential for sustainable investments to reduce pollution. The statistically significant negative effect of investments in sustainable practices on NO₂ concentrations is consistent with studies showing that shipping activities, port machinery, and other port-related activities are major sources of urban air pollution [1,2,3,4]. The findings build on research indicating that the introduction of shore power reduces emissions in port areas [8,9,10,11], as well as investments in other sustainable sources such as solar and wind power plants [29,30,31,32], and further extend this work by providing results based on a panel analysis of several ports over a longer period.

The estimated time trend is negative and statistically significant across all model specifications, which indicates a gradual decline in NO₂ concentrations during the observed period. This is consistent with the strengthening of environmental regulations and the increasing implementation of decarbonization strategies in European ports. This result supports arguments in the literature that a combination of regulatory measures and strategic investments by port authorities can improve air quality [22].

The important implications for shaping sustainable development policies for ports and port cities can be derived from the empirical results of this study. The results from several model specifications consistently show a negative relationship between investments in sustainable practices and NO₂ concentrations, strengthening the reliability of the findings. This empirical evidence supports continued investment in the energy transition of ports, which can have an impact on improving local air quality. The results also highlight the importance of long-term planning, as the positive effects of sustainable investments appear with a time lag. Therefore, policies based on short-term indicators may underestimate the real environmental benefits of sustainable projects. Because the effects of sustainable investments are cumulative and become visible after a delay, coordination among European, national, and local governments is important to ensure continued funding and consistent project implementation. This indicates a need to integrate port sustainability strategies into broader national and European climate policies. The research results also have practical implications for port management. Ports can utilize these findings as an empirical basis for informed investment decisions, particularly when balancing economic objectives with environmental requirements. Empirical evidence that investing in sustainable practices improves air quality in port cities can support the inclusion of sustainable projects in long-term port development plans.

Beyond the direct implications of the empirical findings, the results also suggest broader societal benefits of improving air quality in port cities. Reducing NO₂ in port cities directly improves the health and quality of life of citizens. Lower NO₂ concentrations can lead to long-term health benefits, such as reduced healthcare costs and improved overall well-being for local populations, thereby decreasing the social costs of pollution and strengthening the foundations of sustainable economic development in coastal and urban areas. A cleaner environment also increases the appeal of coastal cities for residents and visitors, positively affecting tourism development and the real estate market. This shows that policies promoting port sustainability provide local benefits that extend beyond the maritime transport sector.

5. Conclusions

The environmental impact of ports and port cities is a significant challenge for maritime development, especially given global climate change, increasing maritime traffic, and stricter regulatory requirements. Pollutant emissions in ports and port cities are primarily linked to shipping activities, port machinery, and land transport. These emissions affect air quality, the environment, and the health and quality of life of residents in port cities. Therefore, ports play an important role in achieving the decarbonization goals of the maritime sector and promoting sustainable development.

This paper contributes to the analysis of existing sustainable practices in selected European ports and conducts a quantitative panel analysis to examine the relationship between investments in sustainable practices in ports and air quality in port cities. The study finds a statistically significant negative relationship between investments in sustainable practices and NO₂ concentrations, which is confirmed across several model specifications. While these results indicate a consistent relationship between investments in sustainable practices and improved air quality, they should be interpreted with caution, as air quality outcomes may also be influenced by regulatory changes, technological progress, and decarbonization trends. The cases of Rotterdam, Hamburg, Gothenburg, Barcelona, and Valencia demonstrate that emission reductions are associated with a combination of sustainable solutions and targeted investments in port decarbonization. The approaches in these ports vary according to spatial, economic, and infrastructural characteristics, but they share a commitment to long-term investments focused on energy transition and improving local air quality.

Examples of successful ports confirm that it is possible to simultaneously improve air quality and operational efficiency, thereby influencing the long-term sustainable development and competitiveness of ports. Although initial investments in sustainable practices present a significant financial challenge, long-term benefits such as reduced operating costs, energy independence, and increased port attractiveness justify the investments. International policies and regulations also play an important role in encouraging the transition to green ports. To maximize effectiveness, it is required to have coordination among port authorities, the private sector, and public institutions, as well as to have the availability of financial instruments.

Although these findings provide valuable insights, it is important to acknowledge the limitations of this study. Since there is no standardized or separate accounting category for investments in sustainable practices, the variable “investment in sustainable practices” is constructed using official annual port reports, reports from European and international institutions, and literature on the energy transition in the port sector. Although this approach enables the analysis of long-term investment trends, these limitations should be considered when interpreting the results. The research sample, based on five large European ports, is relatively small, and the selected ports operate within the EU regulatory framework. Therefore, the results primarily reflect trends characteristic of large EU ports with advanced sustainability strategies. This limits the generalizability of the results, especially for smaller ports or those with different management, institutional, or regulatory frameworks. Additionally, due to limited statistical data, NO₂ and PM2.5 emissions were used as a pollution indicator. While they are relevant indicators of local pollution, the environmental impact of a port may also include other indicators. Although the analyzed ports are located in the EU and fall under the European regulatory framework, differences in national policies and financial instruments may also limit the interpretation of the results. Therefore, future research could include a larger sample of ports to enable comparisons of sustainable practices across different economic, institutional, and regulatory environments. Other pollution indicators could also be included to assess the broader impact of sustainable practices on the environment and the quality of life of the population. Additional recommendations for future research include a more detailed analysis of individual regulatory instruments and incentive policies aimed at promoting sustainable investments in ports.