Baltic Transport Journal 6/2022

№ 6/2022 (110), NOVEMBER/DECEMBER

ISSN 1733-6732

Baltic Transport bimonthly-daily companion

Journal

S U S TA I N A B I L I T Y Sustainability demands a well-to-wake approach to new fuels

OFFICIAL MEDIA PARTNER OF:

MARITIME European and Baltic shipyards’ performance in 2021 MARITIME The carbon capture and storage value chain in shipping

The Port of Opportunities The Port of HaminaKotka is a versatile Finnish seaport serving trade and industry. The biggest universal port in Finland is an important hub in Europe and in the Baltic Sea region.

Welcome to the Port of HaminaKotka!

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Dear Readers,

W

hen dispatching the ‘Season’s Greetings’ e-newsletter last year, we did not wish you for 2022 to return to some pre-corona “normal,” realising that times are – and will continue to be – hard. We were, unfortunately, prophetic, as just two months into the year, a barbaric war was set in motion just around the Baltic Sea region’s corner. I would like to take this opportunity and wish our neighbours in Ukraine freedom, peace & swift recovery. Many worldwide – and from our corner of the globe, too – had, are, and will support your efforts. I tip my hat to their generosity, but, most of all, salute you for your bravery and fortitude. Our Dear Readers, around this special time of the year as well as in the coming months, please remember about & aid those most in need.

I am acutely aware of the biting inflation; yet, there are things, there are important things, and there are also Important Things. A Big Thank You in advance!

Other than that, this is your latest & greatest instalment of our journal, as always packed to the brim with stellar reads. Traditionally, the year’s last issue hosts an analysis of Baltic and European shipyards’ performance. Because we also publish the updated version of the New Silk Road Map by year-end, the Report section features a China-focused article, this time from the Mercator Institute for China Studies, on what we can expect from Xi’s third tenure. There is also a follow-up piece to the ‘gender’ article from BTJ 5/22, with another round-up of why the maritime industry keeps women at bay – for all the wrong reasons. The sector’s reluctance to let more female seafarers in and provide them with better working conditions is nothing more than an exercise in futility.

Other splendid reads also put the finger on the industry’s pain points, including the rough sea towards climate neutrality. Bureau Veritas highlights why we need to start measuring greenhouse gas emissions on a well-to-wake basis to move the sustainability needle. Another class, the American Bureau of Shipping, takes us closer to why carbon capture & storage on board ships can make a big difference. Regarding future marine fuels, SEA-LNG nuances the bunker discussion by getting into the nitty-gritty of CO2 reductions of the different forms liquefied natural gas can come in. In turn, Ballard Power Systems makes a case for hydrogen fuel cells and their role in making the transport sector greener. Speaking of greening the industry, one can make art of it as well, as detailed in an article by Hasenkamp, a specialist in art and other cultural & historical heritage logistics.

As for the Heritage corner, it, like the 5/22 edition, does proud an anniversary, this time the 190th birthday of the Göta Canal that crisscrosses Sweden. In this Transport miscellany, we hope to give birth to a new custom, namely writing about alcohol that, this way or another, is linked to transport & logistics. Moreover, this issue’s entry on the subject ties to our other practice: reporting on the alternative uses of shipping containers.

EDITORIAL Baltic Transport Journal Publisher

BALTIC PRESS SP. Z O.O. Address: ul. Pułaskiego 8 81-368 Gdynia, Poland office@baltictransportjournal.com

www.baltictransportjournal.com www.europeantransportmaps.com Board Member

BEATA MIŁOWSKA

Managing Director

PRZEMYSŁAW OPŁOCKI

Editor-in-Chief

PRZEMYSŁAW MYSZKA przemek@baltictransportjournal.com

Roving Editor

MAREK BŁUŚ marek@baltictransportjournal.com

Proofreading Editor EWA KOCHAŃSKA

Contributing Writers

JARLE COLL BLOMHOFF, FRANÇOIS CHIMITS, PAUL DELOUCHE, STEVE ESAU, JACOB GUNTER, NIKOLAY GEORGIEV NIHRIZOV, ANTONIS NIKITAKIS, BEN PALMER, THOMAS THERKILD PETERSEN, GEORGIOS PLEVRAKIS, FITZWILLIAM SCOTT, GREGOR SEBASTIAN, JOHN SOUTHAM, ANDRZEJ URBAŚ, ROMAN WISST, MAX J. ZENGLEIN

Art Director/DTP DANUTA SAWICKA

Head of Marketing & Sales PRZEMYSŁAW OPŁOCKI po@baltictransportjournal.com

If you wish to share your feedback or have information for us, do not hesitate to contact us at: editorial@baltictransportjournal.com

Contact us:

PRZEMYSŁAW OPŁOCKI tel.: +48 603 520 020

I wish you nothing but a merry (pun intended) read!

Przemysław Myszka

Cover

Port of Oxelösund ISSN 1733-6732

№ 6/2022 (110), NOVEMBER/DECEMBER

Baltic Transport bimonthly-daily companion

Journal

S U S TA I N A B I L I T Y Sustainability demands a well-to-wake approach to new fuels

OFFICIAL MEDIA PARTNER OF:

MARITIME European and Baltic shipyards’ performance in 2021 MARITIME The carbon capture and storage value chain in shipping

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Go to www.baltictransportjournal.com and click: SUBSCRIPTION or contact us at subscription@baltictransportjournal.com Photo: Canva

6/2022 | Baltic Transport Journal | 3

LINER SERVICE EUROPE GREAT LAKES

The first and only yearround liner service between Europe and the Great lakes Quick transit time | Through bills of lading | Onward connections using Spliethoff’s European and American logistic network | Line-supplied containers, project, heavy lift, steel, forest products and bulk| Calling various Great Lake ports, including: - Valleyfield QC - Cleveland OH - Duluth MN - Ramey’s Bend ON - Chicago IL - Monroe MI www.spliethoff.com or greatlakes@spliethoff.com

CONTENTS

20 3 3 8 10 12 14 16 17 18 19 62

REGULAR COLUMNS

Editorial BTJ calendar of events Market SMS What’s new?

Map news Made in China What’s in the Cabinet Venture forth Chart of the issue: DHL’s Logistics Trend Radar 6.0 Heritage corner : Celebrating the 190th birthday of the 190 km long canal

by Przemysław Myszka 64 Transport miscellany 66 Who is who

MARITIME

20 A big (cruise) fish in a small pond – European and Baltic shipyards’ performance in 2021

by Marek Błuś 24 Like it or not – A dinosaur industry not willing to bend – for all the wrong reasons

by Ewa Kochańska 28 Hit the (bio)gas – How will bio-LNG stack against other marine fuels in shipping’s race towards sustainability

by Steve Esau 30 A bad idea?

– The risks of unconventional cargo carriage

by John Southam, and David Richards 32 Capturing the complexities – The carbon capture and storage value chain in shipping

by Georgios Plevrakis 36 From aware to ready – Yards and vendors must act promptly to comply with upcoming IACS cyber security requirements

by Jarle Coll Blomhoff 40 The OCEAN project – Re-drawing navigation systematically to make it safer – for people, ships, and animals

by Fitzwilliam Scott 6/2022 | Baltic Transport Journal | 5

1,600 tonnes on the move.

For your heavylift project, our crane even travels at full load. www.liebherr.com

Maritime cranes

CONTENTS

54

NEWSLETTER BPO

54 The Baltic Ports for Climate

by Andrzej Urbaś 55 A new scene for Baltic ports

by Andrzej Urbaś

42

SUSTAINABILITY

42 Into perspective – Sustainability demands a well-to-wake approach to new fuels

by Paul Delouche 44 Here & now – Powering zero-emission vessels with hydrogen fuel cells

by Thomas Therkild Petersen 46 The art of sustainable transport – Transporting and storing pieces of art and culture – sustainably

by Roman Wisst

49

REPORT

49 Is this time different?

– The structural economic reform challenges for Xi’s 3rd term

by François Chimits, Gregor Sebastian, Jacob Gunter, and Max J. Zenglein

56

TECHNOLOGY

56 Digitalisation relies on connectivity – Meeting shipping’s exponential demand for data bandwidth

by Ben Palmer 58 Charterers embarking the data ship – How the new regulatory landscape and data-gathering technology will foster greater owner-charterer collaboration

by Nikolay Georgiev Nihrizov 60 New thinking enters an age-old field – Solving shipping’s AI dilemmas

by Antonis Nikitakis 6/2022 | Baltic Transport Journal | 7

BTJ CALENDAR OF EVENTS GreenTech for Ports and Terminals Conference, 22/02/23, DE/Hamburg, greentech.ptievents.com GreenTech will be joining our calendar of dedicated events for C-level port & terminal representatives as our first and long-awaited live edition for sustainable, smart ports. With nearly a decade of experience hosting flagship events for Ports and Terminals, PTI is pleased to launch this platform for our community to collaborate and share knowledge which will empower ports & terminals to decarbonise and strive for net zero status in the coming decades.

Transport Week 2023, 14-15/03/23, PL/Gdynia, www.transportweek.eu Expert speakers and a fantastic audience will once again tackle topics that shape the current face of the transport sector, from geopolitics, through market analysis to infrastructure development. Transport Week 2023 will feature the first edition of the Baltic Ports for Climate conference, organized in cooperation with the Baltic Ports Organization. The event will focus on an in-depth analysis of the progression of climate change in the Baltic Sea region, as well as showcase various climate-related projects currently underway in Baltic ports.

Container Terminal Automation Conference, 4-15/03/23, DE/Hamburg, ctac.ptievents.com CTAC 2022 returned for its 6th edition in 2022, marking a comeback to live events for the container terminal industry. The event provided the best forum for networking, learning and knowledge sharing. CTAC will be back again in 2023, so register your interest to secure a super early bird discount before it’s too late!

Intermodal Freight Forum Europe, 11/04/23, intermodal.ptievents.com In February 2022, PTI’s Intermodal Freight Forum Europe covered the pressing challenges and trends in intermodal freight transport – from data standardisation, to addressing the lack of capacity in ports and rail, as well as digitalisation and interconnectivity in the supply chain.

transport logistic, 9-12/05/23, DE/Munich, www.transportlogistic.de/en The world’s leading trade fair for logistics, mobility, IT, and supply chain management has been taking place in Munich since 1978. The trade fair, accompanied by a conference programme, presents the optimal solutions for every requirement, combining innovative products, technologies, and systems with pooled expertise and a strong sales focus.

Smart Digital Ports of the Future, 16-17/05/23, NL/Rotterdam, sdp.ptievents.com For the first time since 2019, Smart Digital Ports of the Future returned to a live, in-person event in May 2022 in Rotterdam. The event was attended by the industry’s leading innovators and representatives from the world’s smartest ports. In 2023, Smart Digital Ports of the Future will return to Rotterdam even bigger and better. Register your interest to cut a hefty discount off the event tickets when they go live.

TOC Europe 2023, 13-15/06/23, NL/Rotterdam, tocevents-europe.com/en/home With an unrivalled 40+ year heritage, here is the place to learn from and network with the world’s leading port decision-makers, policy experts, solution providers and more underneath one roof, enabling you to both supercharge your strategies and make your port operation visions a reality. Whether your focus is on adapting to the unpredictable economic climate and current shockwaves of the pandemic or simply embracing preview the exciting new technologies revolutionising the sector, join us on the road back towards growth at the essential container supply chain event.

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8 | Baltic Transport Journal | 6/2022

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The Port of Szczecin-Świnoujście:

The Port of Klaipėda:

Tonnage-wise, the handling of liquefied natural gas (LNG) rose the most – by 885kt to 3.01mt (an increase of 41.5% year-on-year).

General cargo turnover, in total, amounted to 13.57mt, noting a yearon-year increase of 13.9%. Liquid bulk throughput also rose – by 14% yoy to 5.88mt. On the other hand, the handling of dry bulk contracted by 53.5% yoy, down to 7.67mt. Klaipėda’s January-September 2022 cargo traffic totted up to 27.13mt (-19.3% yoy).

26.66mt handled in I-IX 2022 (+7.5% yoy)

767,365 TEUs handled in I-IX 2022 (+60.7% yoy)

The Port of Szczecin-Świnoujście’s volumes [thousand tonnes] General cargo (excl. timber), of which Wheeled (ferry) cargo Liquid bulk, of which LNG Coal Other dry bulk Iron ore Grains Timber Total Container traffic TEUs

I-IX 2022 13,391.7 10,950.3 5,015.6 3,015.2 2,608.6 2,331.0 1,888.4 1,262.7 165.5 26,663.5

yoy -2.0% -1.3% +31.5% +41.5% +21.9% +4.6% +29.9% -8.7% +53.2% +7.5%

54,140

-15.4%

The Port of Turku:

2.31m passengers served in I-X 2022 (+109% yoy) On the freight side, the Finnish seaport handled 1.78mt over 2022’s ten months, down 12.5% year-on-year. International cargo traffic contracted by 11.6% yoy to 1.72mt, while cabotage by 33.5% yoy to 53.9kt. Some 88.8k trucks & trailers went through Turku’s quays (-14.7% yoy). The port also took care of 2,221 TEUs (-16.7% yoy).

The Port of HaminaKotka:

11.93mt handled in international & domestic traffic in I-IX 2022 (+8.8% yoy) Exports totalled 8.11mt (-1.9% year-on-year), imports – 3.27mt (+24.7% yoy), while cabotage added the remaining 545kt (+601% yoy). The Finnish seaports also took care of more containers, up 2.1% yoy to 462,952 TEUs.

Finnlines:

572k ro-ro cargo units carried in I-IX 2022 (-1.9% yoy) Photo: Port of Szczecin-Świnoujście

The Port of Liepāja:

5.65mt handled in I-IX 2022 (+11.6% yoy) Dry bulk, the Latvian seaport’s leading trade, advanced by 10.8% yearon-year to 3.69mt. General cargo turnover came in second with 1.69mt (+29.4% yoy), followed by 236.6kt of liquid bulk (-37.4% yoy). Some 52.9k trucks & trailers went through Liepāja’s quays (+25.9% yoy) – counting 22t per one ro-ro cargo unit (the country’s average for 2021 wheeled traffic) – and 10,847 TEUs (+25.2% yoy). The Latvian seaport also served 71,512 passengers over 2022’s first three quarters (+118.2% yoy).

The company’s fleet also transported 1,084kt non-unitised freight, an increase of 4.1% year-on-year. Fewer vehicles (excluding passenger cars) were carried, down 20.2% yoy to 99k. More passengers travelled with Finnlines in January-September 2022, up 17.1% on the corresponding period last year.

The Port of Riga:

17.31mt handled in I-IX 2022 (+13.3% yoy) Dry bulk handling rose the most – by 27.6% year-on-year to 10.41mt, followed by general cargo, which advanced by 5.5% yoy to 5.76mt. On the other hand, liquid bulk contracted by 31.6% yoy to 1.14mt. Riga’s container terminals took care of 350,093 TEUs (+13.8% yoy). The Latvian seaport welcomed 73.3k cruise travellers (vs 2,005 in I-IX 2021).

The Port of Gothenburg: 655k TEUs handled in I-IX 2022 (+6.3% yoy) The Swedish seaport’s rail container traffic advanced even faster – by 13.2% year-on-year to 385k TEUs. At the same time, 426k ro-ro cargo units and 155k vehicles went through Gothenburg’s quays, up by 1.4% yoy and down by 18.4% yoy, respectively. Bulk turnover totted 16.68mt (+12.1% yoy), of which liquid amounted to 16.4mt (+11.6% yoy) and dry – 284kt (+55.2% yoy). Some 1.2m ferry & cruise passengers were served in the reported period (+121% yoy).

Photo: Kasper Dudzik/Port of Gothenburg

10 | Baltic Transport Journal | 6/2022

MARKET SMS HHLA’s sea container terminals: 4,869k TEUs handled in I-IX 2022 (-5.7% yoy) The company’s three facilities in the Port of Hamburg took care of 4,605k TEUs (-2.3% year-on-year), while the three outside Germany – the remaining 264k TEUs (-41.7% yoy). On the other hand, HHLA’s intermodal division transported more containers January-throughSeptember 2022, up 0.9% yoy to 1,266k TEUs. Rail accounted for 1,054k (+3.3% yoy) and road for 211k (-9.4% yoy).

Photo: Thies Rätzke /HHLA

The Port of Helsinki: 11.42mt handled in I-IX 2022 (+7.6% yoy) The Finnish seaport’s leading trade, unitised freight, advanced by 6.2% year-on-year to 9.6mt, including 6.71mt of wheeled cargo (+8.3% yoy) and 2.9mt of containerised goods (+1.5% yoy). Helsinki also took care of 1.02mt of dry bulk (+8.7% yoy) and 702.5kt of break-bulk (+32.5% yoy).

The port’s international cargo traffic totted up 11.34mt (+7.3% yoy), of which exports – 5.94mt (+3.3% yoy) and imports – 5.41mt (+12.1% yoy).

Cabotage added 79.6kt (+75.6% yoy). A total of 530,499 trucks & trailers went through Helsinki’s quays (+8.3% yoy). At the same time, the port handled 365,144 TEUs (+2% yoy). Helsinki’s ferry passenger traffic amounted to 6,005,676 travellers (+156% yoy): 4,771,081 to & from Tallinn (+131% yoy), 1,050,131 – Stockholm (+741% yoy), 122,247 – Travemünde (+56.2% yoy), 32,459 – Mariehamn (-50.5% yoy), and 29,758 classified as “others” (+90% yoy).

Ferries serving Helsinki’s traffic also transported 1,088,540 private vehicles (+64.9% yoy). The port welcomed 160,030 cruise guests (+2,360% yoy).

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Port Canaveral goes for a second LHM 600 Liebherr Maritime Cranes will supply the Florida seaport with a brand-new mobile harbour crane in December 2023, featuring a few tweaks relative to the one delivered in 2019. The latest addition will have a lifting capacity of 154t and a jib length of 61 metres (three more than Canaveral’s first LHM 600). Its 20-container reach will accommodate boxes stacked nine-high on the deck.

The updated LHM 600 will have a redesigned cab, including a coupling of joystick and armrest to help make crane control more precise & safer as well as increase operator comfort. In addition, the manufacturer will put in place a revised air-conditioning concept to account for Florida’s hot & humid climate that can cause window fogging. “The second LHM 600 purchased by Port Canaveral is built for the future. It boasts a contemporary exterior design and is more digitally advanced and efficient. Assistance and partial automation systems are made possible by a sophisticated crane control system, evolved sensor integration, and digital information transfer,” Liebherr highlighted in a press release. Captain John Murray, CEO of Port Canaveral, commented, “We’re pleased to add this major acquisition to our port to better meet the demands of an expanding portfolio of diverse cargo. We’re projecting the pace of growth in cargo handling to be very significant over the coming year. This crane will provide greater lift capability that will also meet the needs of the developing commercial space enterprise in our region [the port’s first LHM 600 lifted a record number of boosters for space projects in the fiscal year of 2020].”

Photo: Liebherr Maritime Cranes

Ventplac and HHLA TK Estonia’s new Mantsinens First, the dry bulk & break-bulk terminal operating in the Latvian Port of Ventspils has taken hold of a Mantsinen 120 mobile harbour crane.

The machinery offers 92 feet of outreach and a capacity to handle up to 800t/hr (Ventplac’s leading trade is forest products such as roundwood and different grades of woodchips and pellets, as well as loose bulk goods like aggregate). Next, HHLA TK Estonia’s new gear of the 120 DER model is equipped with a diesel engine as well as electric motors. The machinery can handle up to 620t/hr of bulk goods. HHLA TK Estonia says it procures certified renewable electricity only, underlining that its new Mantsinen 120 DER is emission-free while in electric mode. “The equipment proved its high quality and operational reliability at the first use. Two ships were already serviced and loaded with 30,000 tonnes of Estonian grain and pellets each,” Riia Sillave, HHLA TK Estonia’s CEO, highlighted. She furthered, “Our new crane serves our customers faster, and with plugging it onto the shore power grid, it is the next step in our sustainability path.”

Photo: HHLA TK ESTONIA

Molslinjen on the go: buys another line and battery systems

GMP buys another batch of Kalmar machinery

EQT Infrastructure, the Stockholm-based owner of the Danish ferry line since 2021, has entered into a definitive takeover agreement with Igneo Infrastructure Partners, who own ForSea. The transaction is subject to the approval of the Swedish and Danish competition authorities and is expected to close in early 2023. The parties have agreed not to disclose the sale price. ForSea operates on the Helsingør-Helsingborg service with five ferries (including two already and one soon-to-be electric), carrying about 6.0m passengers, 1.0m of their cars, and 450k trucks per year. “We are incredibly proud of what ForSea has become and achieved under our eight-year ownership. A global sector leader within decarbonisation, a strong and resilient business able to withstand pandemics, and a modern and reliable infrastructure operator. ForSea has a great future ahead of it,” Hamish Lea-Wilson, Partner at Igneo Infrastructure Partners, commented. Meanwhile, Molslinjen has chosen the Swedish Echandia to supply its two fully electric ferries, scheduled to enter into service in 2024, with almost 7.0MWh of battery power. “The total cost of ownership, combined with the products’ high level of safety and low weight were key factors in selecting Echandia as a battery supplier. In addition, choosing a system with a longer lifetime makes perfect sense from a sustainability perspective,” Ole Berg-Hansen, Molslinjen’s Chief Engineer, highlighted. The 116.8 m long ferries will offer room for 600 passengers and space for 188 cars. Their 3.1MWh and 3.8MWh battery systems will be charged in 20-25 minutes, respectively, with green energy. Additionally, the two will be autonomous sailing-ready, including automatic docking and charging at the quay. OSK-ShipTech has designed the newbuildings, with Cemre Shipyard putting them together. The new ferries will serve Molslinjen’s brands’ routes: Samsølinjen’s Kalundborg-Ballen and Alslinjen’s Bøjden-Fynshav.

The Finnish manufacturer will supply Générale de Manutention Portuaire (GMP) from the Port of Le Havre with 12 hybrid straddle carriers. The cargo handling equipment is scheduled for delivery by the end of Q3 2023, increasing GMP’s Kalmar fleet to over 50, of which 24 are hybrid straddle carriers. The order also includes a preventive maintenance contract. “Kalmar has been a trusted partner of ours for decades already, and their proven technology and commitment to developing eco-efficient solutions are a perfect fit to our sustainability targets. The hybrid straddle carrier solution will support our terminals in achieving their environmental goals while also boosting the efficiency of container moves at the same time,” Louis Jonquière, CEO of GMP Le Havre, commented. Mikko Mononen, VP of Sales, Kalmar, also said, “We are delighted to further strengthen our already excellent relationship with GMP and continue our shared journey on the road towards a more sustainable future for cargo handling operations. We are investing continuously in R&D efforts to develop more eco-efficient solutions, and we are pleased to see that our customers share the same priorities. We are also very proud that with this order, we have sold over 500 Kalmar hybrid straddle carriers globally since their introduction to the market in 2013.”

12 | Baltic Transport Journal | 6/2022

WHAT’S NEW? Konecranes to supply Gävle to grow with a cement terminal London Gateway Terminal SCHWENK Sverige, the Swedish company of the German SCHWENK Building Materials Group, with ASCs has signed a 25-year lease agreement with the Port of Gävle. Following the deal, SCHWENK The Finnish manufacturer will deliver 18 automated stacking cranes (ASCs), the first eight

by Q3 2023 and the remaining ones in H1 2024. The new machinery will join London Gateway Terminal’s fleet of 60 non-Konecranes ASCs. The integration will involve replacing the existing remote operating stations and installing a new fleet management system with performance monitoring tools.

“The new fleet of Konecranes ASCs will be equipped with Konecranes’ in-house automation technology across the board. This will include automated handling of road trucks.

This is based on Konecranes’ routine calibration-free solution, which enables steady hit rates over time, reducing the number of exceptions that the remote operator must handle,” Mattias Karlsson, Konecranes’ Sales Director of Port Solutions, said. He added, “The new fleet management system will be implemented for both the non-Konecranes and the Konecranes ASCs, harmonising remote operation across the ASC fleet.”

Sverige will set up a 90kt/year capacity terminal on Quay 1. Construction works should start in Q1 2023, with the first cement shipment arriving by year-end.

Färjerederiet’s biggest investment ever – inked The Swedish Transport Administration’s ferry company has commissioned the Holland Shipyards Group to construct four hybrid ships. The 86 by 14.2 m domestic traffic ferries, which will serve Stockholm’s archipelago, will be delivered starting from summer 2024 one piece a year. The newbuilds, usually running on electricity, will also feature backup HVO diesel engines. The entire investment (totalling SEK1.0b) will also cover eight automooring Photo: Swedish Transport Administration installations, four charging stations, a simulation centre likewise one for operating the vessels remotely. The ferries will perform certain operations automatically (autonomy level 2), such as mooring and hoisting/lowering their ramps for vehicle load- and unloading. The charging will take around four minutes. The ordered ferries will help realise Färjerederiet’s Vision 45, in which the company’s fleet becomes climate-neutral by 2045.

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Auto Achieve reaches the Baltic UECC’s latest hybrid gas-run car carrier has berthed at the Port of Gothenburg, where she received her name and joined the weekly service that links the Swedish seaport with Zeebrugge, Drammen and Esbjerg. The 169 by 28 m ship can carry up to 3,580 vehicles across ten decks. Auto Achieve joins her sister ships, Auto Advance and Auto Aspire, constructed by Jiangnan Shipyard and christened in Zeebrugge in October 2022. The company says that the trio exceeds the International Maritime Organization’s (IMO) requirement for a 40% reduction in carbon intensity by 2030. “With new IMO carbon intensity regulations just around the corner and the looming prospect of higher costs for using conventional marine fuel, we are convinced that our timely investments in these newbuilds will make a real difference for the environment and for business. That is called sustainability progress,” Glenn Edvardsen, UECC’s CEO, commented.

Photo: Port of Gothenburg

LTG Cargo tests a new north-south rail corridor The Lithuanian rail freight haulier is trialling the feasibility of connecting the country with northern Italy via Duisburg. The test run saw trailers sent from Kaunas to Cervignano near Trieste through the German dry port. Once regular, the service will run twice a week.

Color Line’s two vessels on sale The Norwegian shipping line removed the Color Viking ferry from the Sandefjord-Strömstad service and the Color Carrier ro-ro from the Kiel-Oslo one, putting them up for sale.

The company says that high energy prices, macroeconomic uncertainty, and worsened framework conditions had led to the decision. Color Line adds that other factors came into play, too: halving the tobacco quota for residents of Norway as well as reducing the allowance scheme for Norwegian seafarers in the country’s budget for 2023. Color Carrier embarked on her last journey in Color Line’s livery on 14 November 2022, while Color Viking – six days later. The Color Hybrid ferry continues to serve the Sandefjord-Strömstad crossing.

Viking Line buys into Eckerö The Ålandic company has purchased 17.1% of shares, for nearly €10.3m, of the Finnish holding also located in Mariehamn on the Åland Islands. Viking Line has carried out the transaction with its own funds. Commenting to Ålands Sjöfart, Viking Line’s CEO Jan Hanses did not reveal whether the two companies will merge. He underlined that the share buy was done to keep Eckerö’s stock on Åland. The Eckerö Group comprises a few shipping lines that operate in the Baltic, including the Helsinki-Tallinn, Vuosaari-Muuga, and Eckerö-Grissleham ro-pax services.

The Group’s Eckerö Shipping disposes of a fleet of three ro-ros. Eckerö also holds the Birka Cruises brand, the operations of which were terminated in 2020 due to the coronavirus pandemic (the company’s Birka Stockholm has been laid up since that time and is up for sale).

14 | Baltic Transport Journal | 6/2022

Photo: Eckerö Line

MAP NEWS TSG takes in another container ship Thor Svecon Group (TSG) chartered the 1995-built, 133 by 19 m, 660 TEUs capacity Perseus, which the company deployed on the NorvikRotterdam-Hull service on 8 November 2022. “We have seen the need for a fourth vessel for some time, and now that time has come.

Starting from Sweden’s newest port, Stockholm/Norvik, feels like a natural step and completely in line with our goal to strengthen our position in east coast shipping,” Eric Hjalmarsson, TSG’s CEO, said. Lawrence Yam, Hutchison Ports Stockholm’s CEO, added, “The extended connectivity from Stockholm/Norvik to Rotterdam is going to provide our customer more options and even more flexible and faster transit to the major hub port in Europe. A direct linkage to Rotterdam would enable connectivity to new services and to different parts of the world. We are very happy to see that SUN Line [TSG’s brand] is seeing the benefits of starting up a new service that will give their customers the fastest transit to the Greater Stockholm Area.” TSG also runs the Mälar-Benelux & Hull network, connecting the ports of Västerås, Södertälje, Oxelösund, Antwerp, Hull, and Amsterdam. Three vessels serve it: Alrek (360 TEUs), Frej (304), and Odin (304).

Photo: Oost Atlantic Lijn

New intra-Germany intermodal service Hector Rail and Samskip have launched the thrice-a-week Duisburg-Rostock connection for containers and trailers (including non-cranable). The 700 m long trains link Duisburg Hohenbudberg and Rostock Trimodal. Arrivals at the latter are synchronised with Hansa Destinations’ ro-ro service between the German seaport and the Swedish Nynäshamn. “There has been a clear need to increase capacity between Germany and Scandinavia based on growing trade volumes and new requests, but high diesel prices and continuing driver shortages are also steering more cargo away from the road,” Gert-Jan Meijer, Head of Trade, Sweden, Samskip, said. He Photo: Euroports Germany furthered, “Offering an additional high-frequency service option consolidates the competitive edge that multimodal has over road haulage in terms of reliability in the supply chain.” Meijer also underlined, “Our larger customers want to do more using lower carbon options, new customers are knocking on the door, and it’s fair to say that there is a general mood in Germany that now is the time to switch away from roads.”

New sea container service between the Baltic and North seas Containerships has launched a weekly loop that links the ports of Bremerhaven, Gdynia, Gävle, Klaipėda, and Wilhelmshaven. The new service will also take care of 45’ containers. From Gävle, Containerships offers intra-Sweden haulage by road and rail.

6/2022 | Baltic Transport Journal | 15

MADE IN CHINA EBRD-COM circumventing Russia rail study The European Commission (COM) is funding an analysis carried out by the European Bank for Reconstruction and Development (EBRD) on identifying the most sustainable transport connections between Central Asian economies and the extended Trans-European Transport Network (TEN-T) of the EU. The study, set for completion by the summer of 2023, will also include action proposals, such as where infrastructure investments should go. The study aims to enable the Middle Corridor to take over the volumes thus far transported through Russia and Belarus along the Northern Corridor of the New Silk Road. EBRD estimates that some 80k TEUs will follow the Middle Corridor this year, close to its max capacity of 100-120k. In contrast, the Northern Corridor saw 1.5m 20’s between Far East Asia and Europe in 2021. “A diversion of transit cargo exceeding 10 per cent of the Northern Corridor’s tonnage will require large investment across the entire corridor, and its economic efficiency is yet to be assessed. The EBRD estimates immediate investment needs for Middle Corridor infrastructure upgrades to be in the region of €3.5 billion,” the organisation said in a press release.

The initial findings point to several key challenges standing in the way, including high tariffs, insufficient sea shipping capacity and irregular shipping networks, port performance inefficiencies, lack of international agreements, shortage of European contacts in Central Asia, non-electrified railroads, rolling stock in need of modernisation, and the Caspian Sea being not always navigable. “Eventually, the success of the Middle Corridor will depend on the ability of all countries along the route, including Kazakhstan, to work seamlessly, eliminate trade barriers and set up regular and reliable freight schedules. If the Middle Corridor is to become a viable transportation alternative, it must offer a predictable and reliable environment for all parties involved,” EBRD summed up.

New China-Poland e-commerce & postal rail service Xi’an Free Trade Port Construction and Operation has linked Xi’an and Małaszewicze with a 12-day transit time service that carries e-commerce parcels & international letters. In Poland, the shipment is taken over by Polish Post for onward distribution throughout Europe.

Third rail terminal between China and Kazakhstan Shahrat Nureshev, the Kazakh Ambassador to China, has revealed that a third rail border crossing will be added to handle containerised freight passing between the two economies as well as in transit to and from Europe. The new facility will be in Tacheng in the Ili Kazakh Autonomous Prefecture. However, no more details were presented. The Tacheng terminal will join Alashankou and Khorgos, which handle 90% of China-Kazakh rail cargo.

COSCO drops its DGT shares The Chinese have sold their 30% stake in Duisburg Gateway Terminal (DGT) to duisport, the dry port’s authority. The deal was already cut in June 2022, but the news bit kept hidden until late October. The €100m-worth DGT is an investment launched in 2019 by duisport and COSCO (each holding 30% of the project’s shares), with the help of HTS and Hupac (the remaining 40% split in half). The brownfield multimodal project, to be erected on Duisburg’s coal island, will span 235k m2 and comprise 12 rail tracks (730 m long), three barge berths, and 60k m2 of container depot plus a further 20k m2 reserved for warehouses. The facility’s handling capacity is estimated at 800-850k TEUs/year, taken care of by six gantries.

DGT is scheduled to come online in mid-2023. Construction works kicked off this March.

New China-Italy rail service Before November 2022’s end, Hupac had started connecting Xi’an and Milan. Transit time amounts to 25-28 days. The service’s trains cross the Chinese border in Manzhouli, running on their way to Italy via Russia, Belarus, Poland, Germany, and Austria.

"THE BEST MAP OF THE NEW SILK ROAD! MARCO POLO*

* NOT A REAL QUOTE / BUT WOULD BE IF MARCO POLO WAS HERE WITH US – CLICK THE IMAGE OR SCAN THE QR CODE AND CHECK FOR YOURSELF! /

16 | Baltic Transport Journal | 6/2022

WHAT’S IN THE CABINET The 2022 CEF Transport Call A total of €5.12 billion has been made available under the newest Connecting Europe Facility (CEF) call for proposals. The single-stage deadline is set for 18 January 2023. The envelope includes €1.62b (general) and €2.0b (cohesion) for TEN-T Core Network projects, €250 & €350m for projects on the TEN-T Comprehensive Network, €400m and €150m for smart and interoperable mobility, €1.2b and €375m for alternative fuels infrastructure, €100m for sustainable and multimodal mobility, €100m and €150m for safe and secure mobility, and €330m for adopting the TEN-T to civilian-defence dual use (the MilMob call, launched on 12 May 2022, has received 63 projects requesting over €1.3b; their evaluation process is expected to be concluded by the end-December 2022).

EMSA reports on alternative fuels The European Maritime Safety Agency (EMSA) has updated its report on the potential of biofuels in shipping and released its analysis of ammonia as marine fuel. These reports aim to support the European Commission in the ongoing work on the Fit for 55 package, particularly on the FuelEU Maritime proposal. “As a ‘drop-in’ fuel which could replace conventional fossil fuels without substantial engine modification, biofuels can offer an immediate alternative for the existing fleet. The report finds that many of the existing maritime regulations can be transferred from fossil fuels to biofuels, and the safety risks are broadly similar. However, the research notes that the future availability of sustainable biofuels may be in question, given the size of any potential demand from the maritime sector,” says EMSA. On the latter, the organisation commented, “Based on the growing interest for ammonia-fuelled vessels and in projects to produce green ammonia, the report concludes that ammonia is likely to transition to a marine fuel which could enter the market quickly and offer a zero or near-zero carbon solution. However, despite the maritime sector’s extensive experience in handling ammonia as cargo, there is currently little accumulated industry knowledge in its use as a fuel, indicating a need for further understanding of the potential safety-related risks and other challenges it poses. In addition, the study has identified a number of barriers to the widespread deployment of ammonia, including access to renewable electricity for its green production, and technology and regulatory gaps which could prevent its immediate application.” Maja Markovčić Kostelac, EMSA’s Executive Director, summed up, “The reports [...] are just a first step in our research into the potential of different alternative fuels and power solutions, and form part of the support we provide at this critical moment in the maritime sector’s voyage towards decarbonisation. Throughout our work, we keep the safety aspect of alternative fuels firmly in our focus, as the transition to true maritime sustainability can never be complete without the safety dimension.”

Pre-combustion carbon capture The American Bureau of Shipping (ABS) has issued a new technology qualification for a pre-combustion carbon capture system (based on the thermocatalytic decomposition, TDC, process) developed by the Norway-based hydrogen company Rotoboost. The company’s TCD allows for continuous hydrogen production and carbon capture onboard marine vessels by converting natural gas into hydrogen and solid carbon with a liquid catalyst. The resulting gas can be used for fuel cells or as a blend-in fuel for combustion engines or gas-fired boilers. The process can reduce overall carbon emissions by up to 100%, depending on the heating method. In addition, the two say, using hydrogen as a blend-in fuel promises to significantly reduce the methane slip Photo: Rotoboost from combustion engines and reduce particulate matter emissions by capturing carbon in solid form before combustion. “Decomposing methane into hydrogen and solid carbon is an intelligent way to implement a carbon capture and storage solution onboard gas-fuelled ships. This method reduces the storage need onboard, and the solid carbon can be used in the production of fuel cells and batteries and can be recycled again and again. This technology is one that promises to accelerate the energy transition, supporting global decarbonization goals,” Georgios Plevrakis, VP of Global Sustainability, ABS, highlighted. Kaisa Nikulainen, Rotoboost’s CEO, added, “The system can be scaled up modularly step-by-step to meet progressing emission regulations while being cost-effective for shipowners compared to green fuels or conventional carbon capture systems.”

The Green Shipping Challenge Responding to the Green Shipping Challenge formulated by Norway and the US in May 2022, several Norwegian organisations from across shipping, business, class, and finance have teamed up to make the maritime sector zero-emission. Participants in the Norwegian collaboration will strive towards halving shipping’s footprint by 2030, in line with Norway’s climate goals. Alongside efforts to improve existing vessels’ energy efficiency, the partners undertake to develop, design and build future eco-friendly ships. According to them, achieving the 2030 national climate target will require 700 lowand 400 zero-emission ships in Norway alone. The partnership involves GCE Blue Maritime, NCE Maritime CleanTech, the Confederation of Norwegian Enterprise, the Federation of Norwegian Industries, the Norwegian Shipowners Association, Norwegian Coastal Shipowners, Maritimt Forum, Havila Voyages, Hurtigruten, Kongsberg, and DNV. Norwegian financial partners with maritime patronage will utilise capital instruments to support green measures and projects by providing risk capital and financial advisory services in line with regulatory requirements and expectations. “Norwegian government support for green initiatives and infrastructure development for fossil-free energy sources will also play a key role,” the parties have said in a press release.

6/2022 | Baltic Transport Journal | 17

VENTURE FORTH OFFSHORE HYBRID ENERGY PARK • The Dutch-Norwegian company SolarDuck will erect a 5.0MW offshore floating solar farm as part of RWE’s 760+MW Hollandse Kust West (HKW) VII offshore wind energy investment. The project will become operational in 2026. In mid-July 2022, RWE and SolarDuck signed a collaboration agreement to develop floating solar parks. Specifically, to accelerate the learnings on SolarDuck’s floating solar technology, RWE agreed to invest in the first offshore pilot in the North Sea. “This is a flagship project for SolarDuck and an important milestone for the wider OFS [offshore floating solar] industry. SolarDuck, being the first to build a hybrid project

at this scale, will demonstrate the robustness of our solution, prove the important role of system integration in building future-fit energy systems, and enable the scaling of the technology to accelerate its adoption,” Koen Burgers, SolarDuck’s CEO, commented. In October 2022, SolarDuck announced it would partake in a joint industry project (24 partners, five observers) to standardise and develop regulations and guidelines for offshore floating solar energy. The HKW VII site is located in the North Sea, about 53 kilometres off the Netherlands’ coast. Once up & running, the farm will produce enough energy to supply almost one million Dutch homes. •

SAMSKIP TO CONTINUE SAILING ON BIOFUELS • The shipping line has extended its agreement with GoodFuels, committing its four container vessels to carry on running on the latter’s MDF1-100 biofuel. Samskip’s Endeavour, Innovator, Hofell, and Skatafell will sail on the biofuel formulated from sustainable waste streams (from the EU’s Renewable Energy Directive list; the product also holds the International Sustainability and Carbon Certification). According to Samskip, sailing on GoodFuels’ MDF1-100 will result in 45kt CO2 savings by 2022-end. “Sustainable marine biofuels offer a viable way for Samskip to cut CO2 emissions by 90% so that our ships and freight customers reduce their carbon footprint in the interests of the planet. It would take the equivalent of 1.7 million trees to offset this amount of CO2 emissions,” Erik Hofmeester, Samskip’s Head of Vessel Management, said. He furthered, “As part of Samskip’s relationship with GoodFuels, freight owners also become part of a scheme where the lower ocean carbon footprint is auditable as carbon credits in the supply chain.”

Following biofuel trials in 2019, Samskip began routinely running main engines on board the 800-TEU Samskip Endeavour as part of services between the Netherlands and Ireland. The company included

Innovator on the Netherlands-UK service last year before adding Hoffell and Skatafell on the Iceland-UK-Netherlands route in 2022. Bunkering for all four ships takes place in Rotterdam. “Initially using a biofuel blend which achieved a 30% CO2-reduction, more competitive pricing enabled Samskip to integrate a 100% biofuel from 2021 and achieve the 90%-reduction,” said the company in a press release. Max Verloop, Marketing Lead at GoodFuels, also shared, “Verifiable performance is proving to be a key advantage for sustainable marine biofuels as a drop-in replacement for conventional oils. Clearly, several solutions are required to decarbonize shipping overall, but biofuels are proving their case on scalability – one of the key challenges facing any low carbon fuel alternative.” The two parties also underlined in a joint statement, “In June, IMO’s Marine Environment Protection Committee published a new ‘Unified Interpretation’ which makes the first explicit acknowledgement that marine biofuels satisfy the requirements of MARPOL (The International Convention on Marine Pollution).” Negotiations are already underway covering a 2023 supply contract, with one scenario on the table extending the agreement to chartered vessels. •

HHLA HANDLES AMMONIA • The first test shipment of ammonia was brought in a tank container on board one of Hapag-Lloyd’s vessels to HHLA’s Container Terminal Altenwerder (CTA) in Hamburg. The delivery results from the March 2022-signed agreement between HHLA and Abu Dhabi National Oil Company, wanting to test the hydrogen supply chain from the United Arab Emirates to Germany. The ammonia will be used by the Hamburgbased company Aurubis for test runs for the climate-neutral conversion of gas-intensive copper wire production. More ammonia deliveries will be shipped to other customers in Germany in the coming months.

“We at HHLA are very proud to be part of the joint, successful development of a secure supply chain for hydrogen carriers from the United Arab Emirates to Germany. In order to use hydrogen and its derivatives as an energy carrier on a large scale in the future, we need a reliable, climate-neutral and efficient transport chain from the producing countries such as the United Arab Emirates to the German and European customers,” Torben Seebold, Member of HHLA’s Executive Board, commented. HHLA says its CTA is climate-neutral, meaning that this part of the ammonia supply chain adds no emissions. •

CIRCLE K’S E-TRUCK CHARGING STATION OPENS IN GOTHENBURG • The facility offers six public charging points for heavy-duty lorries, with each bay providing up to 360kW of power. There is room for adding more bays (even 1.0MW). Apart from the bays, the facility offers a fenced, CCTV parking lot for about 40 trucks. The station also comprises amenities (showers, toilets, and food & drinks). Within one year, it will be possible to tank hydrogen at the station (720 kg of capacity, one bay, 15 trucks/day).

“The station’s opening at exactly the right place, in terms of both timing and location. Serial production of electric heavy goods vehicles is up and running, and vehicles have been ordered by actors with a lot of traffic at the port. By the end of the year, electric heavy trucks will be a common sight in the port, and it will just keep on growing from there. So, this 18 | Baltic Transport Journal | 6/2022

station comes at just the right time – the transition is taking place here and now, and as far as the port is concerned we’re delighted to be able to work with Circle K to provide the necessary infrastructure,” Elvir Dzanic, the Gothenburg Port Authority’s CEO, commented. Lennart Olsson, Senior Manager Pricing at Circle K Sweden, also said, “The station is a magnificent flagship and a real milestone along the way to a future of greener transport operations. We’re incredibly happy and proud to be leading the way on this journey and of what we’ve achieved, such as the collaboration with the port. The station’s strategic location and smart structure mean that we’re well-prepared for the market’s future needs for different fuels. This station has the potential to become an important hub in the transition.” •

CHART OF THE ISSUE

New & Returning Trends

Refocused Trends

Remodeled Trends

Source: DHL

6/2022 | Baltic Transport Journal | 19

European and Baltic shipyards’ performance in 2021

A big (cruise) fish in a small pond

by Marek Błuś If 2020-end left Baltic shipyards with any dreams of blossoming, the beginning of this century’s third decade buried all hope of turning the region into a multi-yard cruise ship construction hub. Whereas the 2021 production measured in gross tonnage (GT) grew by about 10%, two other crucial figures did not change much: handed over vessels and shipyards counting new deliveries – 24 and 11, respectively (read: stagnation).

As usual, some names disappeared from the shipbuilding list: Flensburger Schiffbau-Gesellschaft (FSG), Pella and Yantar, while others joined the rooster: Admiralty and Safe (both back after four years of absence) as well as MV Werften, which was our greatest hope but proved to be nothing more than a flash in the pan.

Baltic Tab. 1. Vessels GT 100 and above built by Baltic shipyards in 2021 – in gross tonnage order Name Costa Toscana Sibir Aurora Botnia Crystal Endeavour1 SH Minerva Salish Heron Pola Gali Norvezhskoye More Coey Viking Cooper Viking Ruth Börkur Vilhelm Thorsteinnsson Havskjer Silver Arctic Pavel Leonov Piltun Fodnes Astrid-Marie Antarctic Vingaskär Pomor North Sea Slattenberg Total 1 2

Flag Italy Russia Finland Bahamas Malta Canada Russia Norway

GT 186,364 28,494 24,036 20,449 10,617 8,728 6,305 5,098

Shipyard Meyer Turku Baltic RMC MV Werften Helsinki Remontowa Nevsky Vyborg

Type Pax (cruise) Icebreaker Ro-pax

4,799

Remontowa

PSV

Karstensen

Fishing

Remontowa

Remontowa

General cargo Pax/general cargo Rescue Ferry2

Karstensen

Fishing

Onego Karstensen Safe

Tug

Pax (cruise) Ferry2 General cargo Fishing

Denmark Iceland Norway Russia Norway Sweden Ireland Sweden Russia Denmark Norway

New name: Silver Endeavour Double-ended ro-pax

20 | Baltic Transport Journal | 6/2022

4,319 3,409 3,162 3,061 3,030 2,596 1,622 1,398 499 498 450 417 332,428

Nevsky

For the second time in a row – and the third time in Baltic shipbuilding history – a single delivery accounted for over half (56%) of the annual production. We are witnessing the birth of a new custom: the same phenomenon occurred in 2022 and is expected to hold in the coming years. The Finnish subsidiary of the German Meyer Werft advances by leaps and bounds – from GT 100k in 2019 to over GT 180k last year, dominating the regional output with one hand tied behind its back.

The yard’s position will only solidify in the near future: Royal Caribbean International’s (RCI) order of the Icon of the Seas will get Turku’s production over GT 200k in 2023, up to more than GT 300k in 2024 thanks to two deliveries for RCI and TUI. Turku’s Costa Toscana was also the biggest ship built in Europe last year, ahead of another of Meyer’s GT 180k+ ‘sailing hotels,’ AidaCosma.

Fishing

Photo: Costa Crociere

MARITIME And here is where the good news from the cruise sector ends.

MV Werften delivered its first – and last – GT 20k cruiser (called a “megayacht”), leaving the bankruptcy trustee with a single unfinished hull of GT 200k (the ship will be completed for Disney Cruise Line, probably in 2025). Although Helsinki Shipyard (former Arctech) wrapped up two expedition cruisers year after year, the company found itself in trouble following contract cancellation for a third and final cruiser in the series, and, additionally, because of the export licence withdrawal for an icebreaker ordered by the Russian company Norilsk Nickel.

The pure freight sector reached its historical bottom in 2021 by delivering two small general cargo ships constituting 2.8% (GT 9.5k) of the whole Baltic output. If the delivery of Tennor Ocean

by FSG is postponed – a round zero will be floated out in 2022. FSG, the leading European maker of ro-ro ships, disappeared from the 2021 delivery list due to its insolvency and restructuring.

On the other hand, there is nothing fishy about the part of the shipbuilding industry that offers solid hope, namely fishing.

The sector is dominated by a single builder: Karstensen.

Among the 24 deliveries in 2021, ten were fishing vessels, with Karstensen putting together eight. The company from Skagen has 16 ships in its order book. The yard’s ‘hull factory’ (Karstensen Poland) will move in 2023 from Gdynia, located there since 2018, to the historic site of the former Stocznia Gdańska (lately Nauta) – to the area used in the 19 th century

by Schichau-Werke from Elbląg to erect its second plant.

Photo: Wasaline

Tab. 2. Vessels GT 100 and above built by Baltic shipyards in 2022 – in gross tonnage order (provisional) Name Carnival Celebration MyStar1 Tennor Ocean1 Ural1 SH Vega Severniy Polus Kapitan Vdovichenko Astrid Artemis Altera Myggenes Monsun Strażak-28 Total 1 2

Flag Panama Estonia Malta Russia Panama Russia Denmark UK Finland Denmark Norway Poland

GT 183,521 50,629 32,770 28,476 10,617 9,843 9,055 4,697 3,215 1,399 600 498 368 335,688

Shipyard Meyer Turku RMC FSG Baltic Helsinki2 Admiralty Karstensen

Type Pax (cruise) Ro-pax Ro-ro Icebreaker Pax (cruise) Research Fishing

CRIST

Ferry

Karstensen

Fishing

Remontowa

Firefighting

Delivery expected in December 2022 Former Arctech

Photo: Swan Hellenic

Photo: MV Werften

Photo: SCHOTTEL

6/2022 | Baltic Transport Journal | 21

MARITIME Tables 1 and 5 can raise doubts because of two seemingly lacking deliveries – the Russian sister ro-paxes Marshal Rokossovky (GT 20,661) and General Chernyakhovsky (GT 20,724). Nevsky Shipyard was indeed their contracting firm. Still, both were built by the Turkish Kuzey Star and travelled to St. Petersburg without tug assistance. It means that the two were outfitted

and equipped with all the viable systems in the South. At their homeport, a brass plate with the shipyard’s name should only be attached to the front of the bridge, plus some minor jobs carried out. As such, our lists assign the ships to the yard that completed the drive and other systems required by regulations for safe, independent navigation.

Europe Cruise ships, totting up to 65% of the GT delivered from the Baltic in 2021, were even more important for Europe’s shipbuilding: 17 vessels in total, +23% in GT to 70% of the continent’s output (vs 13 cruisers and 68% of market share in 2020). In Italy, cruisers constituted 93% (!) of all GT, Germany – 99% (!!), France – 97% (!!!), Finland – 89%, and Norway – a “mere” 51%. Production was concentrated in two industrial groups: Fincantieri delivered GT 544k from its Italian and Norwegian (the Vard brand) yards, and Meyer made GT 538k from its German and Finnish plants.

Italian production was complemented, so to say, by the ro-pax GNV Bridge (GT 32,581) from Visentini Shipyard. Although a domestic service ferry, it would rank as Europe’s 10th biggest in 2021. Other notable mentions include three non-cargo carrying vessels: the cable-layer Leonardo da Vinci (GT 27,937) from Vard, the polar icebreaking research and supply ship Nuyina (GT 22,867) built by the Dutch conglomerate Damen for Australia, and the mining vessel Benguela Gem (GT 20,503) – also from Damen but for the diamond industry in Namibia.

Even as European deliveries grew by 19% in 2021, the output was still below the two million GT mark, accounting for some 3% of global completions. Where are deglobalisation and homeshoring when Europe’s shipbuilding industry needs them?

Tab. 3. European shipbuilding countries’ performance in 2020-2021 (thousand gross tonnage)1 No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Country Italy Germany Finland France Norway Netherlands Russia3 Spain Romania Poland Croatia Denmark UK Portugal Greece Bulgaria Total

3

Photo: BCFerries

22 | Baltic Transport Journal | 6/2022

2020 518 309 182 138 102 121 131 46 – 13 15 9.0 7.0 10 1.0 3.0 1,605

yoy -3.3% +21.0% +21.4% +36.2% +71.6% +3.3% -18.3% +54.3% – +84.6% +53.3% +133% +157% +/-0% +300% -100% +18.8%

2021 order book 2 3,100 1,623 1,100 1,060 70 200 150 300 200 160 200 32 15 50 4.0 6.0 8,270

Statistic based on the location of the contracting/outfitting shipyards At the end of the year Shipyards in the European part of the country only Sources for Tabs. 3 and 5: national and associations’ statistics corrected by own research 1 2

Photo: Karstensen

2021 501 374 221 188 175 125 107 71 44 24 23 21 18 10 4.0 – 1,906

Photo: Karstensen

MARITIME Tab. 5. Top 10 shipbuilding countries in the world in 2019-2020 (million gross tonnage)

Tab. 4. Cruise vessels built by European shipyards in 2021 – in gross tonnage order

1

Name Costa Toscana AidaCosma

GT 186,364 183,774

MSC Virtuosa

181,541

MSC Seashore Odyssey of the Seas Valiant Lady Rotterdam Viking Venus Silver Dawn Le Commandant Charcot Viking Octantis Crystal Endeavour Hanseatic Spirit Ultramarine National Geographic Resolution SH Minerva Golden Horizon Total

170,412 167,704 108,192 99,935 47,842 40,855 31,283 30,114 20,044 15,651 13,827 12,786

Shipyard Meyer Turku Meyer Werft Chantiers de l’Atlantique Fincantieri Meyer Werft

MSC Cruises

MV Werften Vard Brodosplit

Royal Caribbean Virgin Voyages HAL Viking Ocean Silversea Ponant Viking Ocean Silversea TUI Cruises V Ships Leisure

Ulstein

Lindblad Expeditions

Fincantieri

Vard

10,617 Helsinki 8,784 Brodosplit 1,330,130 1

No 1 2 3 4 5 6 7 8 9 10

Owner/operator Costa Crociere Aida Cruises

1

Country China South Korea Japan Philippines Italy Germany Vietnam Finland Taiwan France Total Top 10 Total world

2021 26.91 19.70 10.70 0.63 0.50 0.37 0.37 0.22 0.20 0.19 59.79 60.60

2020 23.25 18.48 12.94 0.61 0.52 0.31 0.58 0.18 0.32 0.14 57.33 57.80

yoy +15.7% +6.6% -17.3% +3.3% -3.8% +19.4% -36.2% +22.2% -37.5% +35.7% +4.3% +4.8%

2021 order book1 77.00 57.00 19.50 1.64 3.10 1.62 0.97 1.10 0.22 1.06 163.21 172.37

At the end of the year

GTLK Europe Brodosplit-Plovidba

Former Arctech

Photo: Fjord Shipping

Photo: Karstensen

Photo: Fiskebåt

Photo: Karstensen

Photo: Remontowa Shipbuilding

6/2022 | Baltic Transport Journal | 23

A dinosaur industry not willing to bend – for all the wrong reasons

Like it or not

by Ewa Kochańska Statistics from western countries, and recently also globally, highlight that female students regularly outnumber their male counterparts in higher education institutions. Women are progressively making their way into industries previously viewed as ‘male-only,’ taking over positions that men are increasingly not qualified to fulfil. However, despite growing opportunities for females in the maritime industry, the sector still has one of the least gender-diverse workforces in the world. The second instalment of the Gender Diversity Booklet. Heading towards an inclusive work culture – prepared

by Anglo-Eastern Maritime Training Centre in cooperation with Women’s International Shipping & Trading Association, the International Seafarers’ Welfare and Assistance Network, and the International Chamber of Shipping – dives into the reasons why women still struggle to establish themselves on the seas. The findings are based on data gathered via an online survey of active female seafarers who gave their opinions on attitudes, discrimination, and harassment in the maritime industry.

T

he survey for the latest Gender Diversity Booklet included female maritime workers from 78 countries, 90% of whom worked on cruise ships, with the remaining employed on various freighters (such as tankers, container, off-shore supply vessels, and other general cargo). The 1,128 respondents gave examples of their experiences of sexual misconduct, bullying and gender stereotyping, as well as undesirable working conditions and poor access to female-specific healthcare.

Because I’m a female According to research, a diverse workforce leads to better problem-solving and decision-making by bringing in various viewpoints, abilities, and experiences.

Such an environment leads to higher worker engagement and reduced employee 24 | Baltic Transport Journal | 6/2022

turnover, improving the company’s reputation as well as its productivity and profitability.

However, a study by Harvard Professor Letian (LT) Zhang of leading companies from 24 industries in 35 countries shows that gender diversity makes companies more productive only as long as there is a “widespread cultural belief ” that gender diversity is important. This is why the maritime industry must take steps as a sector to diversify its workforce and change its culture to start reaping full benefits from female engagement at all levels.

The Gender Diversity Booklet survey results show that the main challenges female maritime workers face include discrimination, harassment, bullying, isolation, and a fixed mindset. For women, discrimination is frequently their first experience in maritime during the

recruiting process. Females reported being scrutinised for their perceived physical inaptness, lack of leadership experience, or for having to balance family and work life.

Further, many responses highlighted mental harassment cases. Examples given by female seafarers working on non-cruise ships included being told not to leave their rooms after 9 pm or to wear only “certain type of clothing” around their male counterparts. They are also being given cutesy nicknames or called “dear” and “honey” (while male officers go by their actual names). A second officer on board a bulk carrier recalled: “I can’t socialise with the crew without facing a mixture of harassment. Males assume that I’m sleeping with someone I have good conversations with.

This creates friction on board and constant harassment. If I make any mistake, everyone assumes it’s because I’m a female.”

MARITIME

A third engineer on board a chemical tanker : “Although I have experienced this in my early sailing period when I was junior, the machinery overhaul jobs and tasks were not given to me. I was told to stay in the engine room, fill the engine room log book and check the parameters. Seniors were not very confident of my ability and they used to accompany me every time to see whether I could complete the task. I was asked to arrange the control room as they assumed being a girl I know how to keep things tidy and neat. I was asked to make coffee for seniors all the time in the breaks. Chief Engineer, in fact, called me once to his cabin and asked for a cup of coffee which I declined saying that I was doing some work in the engine room.”

Sexual harassment (unwanted sexual conduct in verbal, non-verbal, or physical form) is also a major issue for women seafarers. One example cited in the survey results was from a third officer on board a tanker: “I have been told that women are only meant for bed, bearing children and not fit to work on ships. I have faced many situations where my opinion wasn’t taken. I have been policed for talking or being ‘extra friendly’ with people who were batchmates or just workmates.”

Bullying and cyberbullying can be problems as well, showing up as repeated harassment in the form of hostile or vindictive behaviour, in person or online, causing the victim to feel threatened or intimidated.

Additionally, the feeling of isolation in the maritime sector is a critical factor that works against women. While many maritime organisations have aggressive recruiting programmes for female seafarers, the survey respondents said that, especially when starting, they felt ignored, their capabilities were constantly questioned, and they had to work extra hard to prove themselves.

Nevertheless, the survey respondents stated that in many instances, with time, their male colleagues started accepting and appreciating them. The challenges women in the maritime sector face often involve a fixed mindset of people in charge, not those they interact with daily. While acceptance of women in maritime is on the rise, “research shows that there is a reluctance to promote women to senior positions,” showing stereotypical thinking from the senior-level leadership. The issue of shipping

companies continuing to hesitate to hire and promote women is directly related to their fixed mindsets about gender roles; jobs such as sailing, particularly on non-cruise vessels, are still considered an occupation reserved only for men.

All of these issues experienced by female seafarers can lead to “anxiety, poor sleep, depression, loss of appetite, headaches, exhaustion or nausea. Victims feel humiliation, mistrust, anger, fear and sadness,” states the Gender Diversity Booklet.

have to deal with poorly fitting personal protective equipment, possibly causing severe injury. This situation also conveys that women’s safety and well-being are unimportant to the company.

Similarly, working conditions on board ships leave women seafarers lacking. In particular, the Gender Diversity Booklet highlighted the need for separate toilets for women near the work area, which are clean and well-lit, with locks and proper waste bins. A female seafarer on a cruise ship described having only one bathroom for women near the crew mess but far from the working area, while her male co-workers had several bathrooms nearby.

Access to personal hygiene products, as well as disposal bins for sanitary waste, can also be an issue on ships. A third officer on board a gas tanker described: “I ended up doing a longer trip, and I asked if they would supply sanitary products to female seafarers unable to disembark due to COVID-19.

The male office staff asked me to repeat my question as this

Women often try to alter their own behaviour to avoid, for example, harassment and bullying, while the harA second engineer assers continue with on board a bulk carrier: “On their everyday routines.

Discrimination causes stress my first ship the Chief Engineer and low self-esteem, which can came down during the night lead to depression and a nervrounds with the 2/E, drunk, as ous breakdown. Harassment and bullying on the ship can usual and tried to hold me by quickly result in victim withthe waist while I was filling drawal and loss of commitment the log book.” to their job and ship.

Considering these situations’ mental and physical load, female seafarers are at a higher risk of physical accidents. Another serious consequence of working in such a male-dominated and stressful environment is that some women in the maritime industry showed their own unconscious bias, believing that some jobs were better suited for men than females due to these genderrelated abuses.

Unprepared The challenges of working in a male-dominated industry such as maritime are not only psychological.

Often these sectors are ill-prepared in terms of equipment to accommodate women.

For example, females at sea

6/2022 | Baltic Transport Journal | 25

MARITIME

Poorly Fitting Personal Protective Equipment

A deck cadet on board a container: “female sized coveralls!! We are not shaped like boxes!!!! Also, on my ship we never had size ‘small’ of anything! Let alone an XS!”

issue obviously hadn’t occurred to anyone.

Whilst they said they would look into it, sanitary products never arrived.”

Access to healthcare providers able to handle female medical issues has also been a challenge. The Gender Diversity Booklet advises that a medical officer trained to address female health challenges is a must on board ships. The employer also needs to provide medical confidentiality, easy access to a shore specialist for a second opinion, and job security in assuring that even if on medical leave, the seafarer will be rehired once the issue is resolved.

This leads straight into a discussion about maternity constraints, a loaded topic in almost every industry. One of the main reasons why women do not consider a career as a seafarer is balancing career and motherhood. Allowing for shorter contracts and having a clear maternity leave policy could alleviate some concerns. “Paid maternity leave is a core element of the health and economic protection of women workers and their children over the perinatal period. A vast majority of countries have adopted statutory provisions for paid maternity leave. This entitlement is associated with positive health outcomes for women and their children (ILO, 2012b).”

Leveraging the strengths of all talents The second edition of the Gender Diversity Booklet underscores that 26 | Baltic Transport Journal | 6/2022

diversity and inclusion training can make a company more productive. They encourage employees to open their minds to new perspectives and eliminate biases and stereotypes, improving, at the same time, productivity and communication within the company, employee cooperation, creativity, and out-of-the-box thinking.

On the other hand, a lack of psychological safety can have far-reaching repercussions. Seafarers who are afraid or uncomfortable to speak up, and do not feel appreciated by their company, may not point out or admit to errors and lack the motivation to take the initiative to fix or stop mistakes. If workers are not fully committed, the company is unable to “leverage the strengths of all its talent,” and productivity suffers.

The survey also asked respondents for their suggestions on how to address the issues brought up in the questionnaire.

The responses included, among others, creating an environment of trust and respect; providing equal opportunities, equal pay, and fair treatment; encouraging more women to work at sea, to be present on the board and in leadership positions; creating an environment where women feel comfortable reporting issues and complaints; bringing about transparency in hiring procedures; providing training on gender sensitisation and eliminating unconscious bias and discrimination; and making fair evaluations based on work performance alone.

The Gender Diversity Booklet also presented some steps encouraging psychological safety at the workplace, founded on cultural awareness, anti-harassment and anti-bullying policies. An all-inclusive workforce must include diverse teams drafting company policies which must have “buy-in at all levels” to ensure commitments to policy implementation even at the highest levels. The policies must include an action plan “with clear and measurable time-bound targets to support the implementation of the policy.”

For a company to thrive, it is crucial to develop and implement unbiased recruitment processes, cultural awareness, and prevention of harassment and bullying.

The hiring process must be gender-blind with a focus on skills and experience. The interviewing panels must be diverse, job descriptions need to be gender-inclusive, and hiring procedures should be reviewed continuously. There must be no bias against any gender, race, religion (or the absence thereof), or nationality in the hiring process, as well as in the workplace itself; the working environment must be rooted in mutual respect among all employees, free of harassment and discrimination.

One of the most effective ways to prevent harassment and bullying is to investigate all complaints immediately while taking prompt action to rectify the situation. This sends a clear message of what type of behaviour will not be tolerated at the company. “Strict disciplinary action

MARITIME

When employees feel psychologically safe at work, they feel comfortable being themselves and are likely to:

• •

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Express ideas and opinions

Try new things

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Engage in resolving conflicts constructively

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Encourage feedback

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Ask for assistance

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Exchange information with one another

Appreciate and respect others

Show empathy and concern

must be taken against offenders, and assis- for promotion and, if possible, year-round recognising and nominating women role tance should be provided in reporting to employment to sustain women in the mar- models within the organisation. authorities/criminal justice system.” itime. Further, it is vital to provide women The survey results of the second ediAlso, all A thelack workers must take action seafarers with mentoring programmes tion of thepeople Genderdon’t Diversity of psychological safety at work has major repercussions. When feel Booklet to prevent harassment and report it if it where females in higher positions offer underscore that to benefit from all that there seems be dangerous The This seafarers mayworkplace feel uncomfortable occurs. It iscomfortable imperative to protect those to support and guidancesilence. to new hires. a diverse offers, the maritime who file complaints against victimisacan be initiated by giving a conference sector-wide must become more are welcomtalking about the possible errors in the system and may lack initiatives. When people tion. It is equally important to clarify that guidance call from female senior employ- ing to women seafarers. Research shows fully committed, the organisation lostjust anjoining opportunity to leverage strengths of “malicious not complaint and false/forged ees for womenhas cadets the that workplace the diversity is something evidence may result in legal and/or dis- ship for the first time. A 24/7 hotline for top candidates desire when searching all its talent. ciplinary procedures.” women seafarers should also be available. for work, which means that attracting The Gender Diversity Booklet also top talent to an organisation depends on A necessity advises that gender sensitisation it. A diversified workforce also signals Gender diversity is only possible if it is should be included in the International to investors that the company is wella company-wide effort; therefore, it needs Convention on Standards of Training, managed and engages in commonly-recto be visible, particularly in the organi- Certification and Watchkeeping for ognised best practices (studies even show sation’s senior positions. For example, Seafarers. The process of gender sen- an increase in stock prices after a comsenior personnel should be transparent sitisation targets societal stereotypes pany wins a diversity-related award). about company diversity challenges or about men and women as “unequal entiBut perhaps most convincingly, statistics complaints and address them instantly. ties” and the misconception about their from educational organisations and workThe efforts to strengthen gender diversity roles. Since in the maritime there still places across the globe show that women are should include setting diversity goals, is a mindset that females are not capa- coming into the maritime. Enabling them encouraging referral programmes, and ble of doing certain tasks, it is essen- to join the ranks trouble-free is not only consciously hiring more women. tial for employers to empower women by the right thing to do; it’s not even what will It is essential to track the progress of offering company initiatives, rewarding ultimately pay off. It is a necessity – whether female hires and provide opportunities achievements of female employees, and one likes it or not.

When that happens, productivity suffers.

6/2022 | Baltic Transport Journal | 27

How will bio-LNG stack against other marine fuels in shipping’s race towards sustainability

Hit the (bio)gas

by Steve Esau, COO, SEA-LNG

The bio-version of liquefied natural gas (bio-LNG) can meet a significant proportion of future shipping demand and will be among the cheapest sustainable alternative marine fuels. In its pure form, bio-LNG could cover up to 3% of the total energy demand for shipping fuels in 2030 and 13% two decades later. As a drop-in fuel blended (20%) with fossil LNG, it could cover up to 16% and 63% of the total energy demand in 2030 and 2050, respectively.

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hat is one of the key predictions made in a new independent report conducted by Nanyang Technological University’s Maritime Energy and Sustainable Development Centre of Excellence. The report also forecasts that the average cost for delivered bio-LNG will fall by 30% by midcentury vs today’s values, mainly driven by the reduced expense of producing biomethane in large-scale anaerobic digestion plants.

This makes bio-LNG one of the cheapest sustainable alternative marine fuels, compared to biomethanol and electro-fuels, including e-ammonia and e-methanol.

The study, commissioned by SEA-LNG, confirms that bio-LNG has considerable potential as a solution for the decarbonisation of the shipping sector thanks to the mature and commercially available technologies for fuel production and use onboard, existing delivery infrastructure, plus its competitive cost compared to other sustainable biofuels and electro-fuels.

Growing demand – and supply The LNG-fuelled fleet is growing rapidly, with vessels propelled by dual-fuel engines representing some 38% of all tonnage on order. Owners and operators of gas-fuelled ships worldwide (such as CMA CGM, Furetank, Baleària, TT-Line, UECC, Tote, and Harvey Gulf International) have all used bio-LNG bunkers in response to upcoming regulation and customer demand.

We are already seeing a growing number of strategic collaborations driving the development of bio-LNG production forward: Scandinavian Biogas, for example, has just signed a multi-year agreement worth approximately three hundred million Swedish crowns for the supply of liquid biogas to the transport sector in the Nordic region. Energy company St1 has made an investment decision to construct a biogas upgrading & liquefaction refinery in Sweden after securing long-term offtake contracts, while Latvia’s Agrofirma Tervete to supply equipment for a bio-LNG production plant in the Latvian Tervete.

28 | Baltic Transport Journal | 6/2022

Meanwhile, Gasum’s network already counts 17 biogas plants across Finland and Sweden, with the company regularly supplying bio-LNG bunker to regional players.

Sustainable sources Bio-LNG is derived from the liquefaction of biomethane. This gas is produced from the degradation of second-generation biomass, including non-food energy crops, agricultural residues, manure, biowaste, and wood and forestry waste. As a second-generation fuel – unlike most biodiesel – its production will not interfere with food, fodder or fibre supply chains, and its production avoids land use changes.

Importantly, when manure is used as a feedstock, biomethane production avoids releasing methane emissions into the atmosphere. Current management practices involve using manure as a fertiliser on crop fields, where it decomposes, venting methane into the atmosphere.

In general, bio-LNG can reduce greenhouse gas emissions by up to 80% vs marine diesel – if methane leakage in the production process and onboard methane slip are minimised. In the case of bioLNG produced from anaerobic digestion of manure, if avoided emissions are considered, then bio-LNG can achieve negative emissions ranging from -121% to -188% compared with diesel.

Cost comparison Although the cost of bunker bio-LNG is relatively high compared to fossil fuels, it is cheaper than most other alternative fuels. In the best-case scenarios, where biomethane is produced from manure and agricultural residues in Asia and delivered to major eastern ports, the cost of bio-LNG could fall to $20/GJ by 2030 and $15/GJ by 2050.

Sustainable biofuels such as UCOME made from waste cooking oil are generally cheaper. Still, feedstock availability is low.

Biomethanol and bio-LNG have similar costs per unit of energy, with the former being slightly more expensive due to the gasification technology required in its production.

Electro-fuels will be significantly more expensive than biomass-derived fuels.

Among these e-fuels, liquid e-hydrogen has the lowest production costs; however, its high transport and delivery costs make it the most expensive bunker fuel. The production costs of e-methanol and e-LNG are similar and have comparable costs for transport and bunkering per unit of energy.

It should also be remembered that while a gallon of methanol is cheaper to store and transport compared to an equivalent volume of LNG, it carries far less energy due to its lower energy density.

E- ammonia is generally cheaper to produce as, unlike e-methanol and e-LNG, its production does not require CO2. That said, there are major uncertainties about fuel handling systems and engine technologies, which are only at the research or pilot stage. Further data on onboard conversion system costs and efficiency are needed before e-ammonia’s cost competitiveness can be determined.

Future availability The adoption of bio-LNG in shipping will be linked to the widespread use of biomethane across other sectors to grow the overall supply pool. It will require regulation in two key areas. Firstly, national and international standards for biomethane injection into gas grids. Secondly, a commonly accepted, preferably legally binding, certificate of origin scheme to facilitate efficient trading in biomethane in its gaseous and liquefied forms and reduce transportation costs.

Logistics considerations The upstream production costs of biomethane can be reduced by optimising the size and location of future biomethane plants by reducing the cost of biomass collection and transport. The best-case scenario is represented by medium-sized plants close to farms and biomass waste collection points, such as cities for food waste and slurry, animal farms for manure, and agricultural sites for residues.

MARITIME Fig. 1. Potential availability of bio-LNG for the shipping sector in 2030 and 2050 over total shipping energy demand, with different blending rates with fossil LNG

Source for all figs.: SEA-LNG

Fig. 3. Bio-LNG from anaerobic digestion total cost range in 2020, 2030 and 2050, compared with fossil LNG bunker price

Fig. 2. Scheme for the evaluation of bio-LNG availability for shipping

Fig. 4. Alternative fuels energy cost comparison (per unit of output energy from the engine)1, 2, 3

1 2 3

Dedicated supply chains for shipping involving on-site liquefaction and transport of bioLNG by trucks and bulk carriers are appropriate for demonstration purposes. Still, they do not make economic sense for large-scale implementation due to very high infrastructure costs. Utilising existing LNG infrastructure and logistics should therefore be incentivised.

The lowest costs are achieved when biomethane is injected into the gas grid and virtually transported to liquefaction plants and LNG terminals using existing infrastructure and instruments such as Green Gas Certificates and Biomethane Guarantees of Origin for trading. This would require

Including transport & bunkering costs (bio-LNG and e-LNG transport cost is based on fossil LNG, thus implying the use of existing infrastructure) Assumed engine conversion efficiency: 45% (50% for liquid hydrogen used in a fuel cell) The higher and lower ends of the spectrum represent 2030 and 2050 costs, respectively

an appropriate regulatory framework like that already in place for green electricity in some regions of the world, including Europe.

Part of the mix The global shipping industry faces unprecedented challenges as the pressure to meet climate targets grows. Over the next

couple of decades, alternative fuels and propulsion systems may emerge. However, LNG is, for the moment, the only commercially viable and scalable alternative marine fuel, offering the shipping industry a low-risk and incremental pathway to decarbonisation, starting now and continuing through bio- and e-LNG into the future.

Founded in 2016, with numerous high-profile members including shipping companies, ports, LNG suppliers, bunkering companies, infrastructure providers, original equipment manufacturers, classification societies, banks, and brokers, SEA-LNG is a multi-sector industry coalition whose members work together to demonstrate the benefits of LNG and its variations as a marine fuel throughout the entire value chain. Head to sea-lng.org for more info.

6/2022 | Baltic Transport Journal | 29

The risks of unconventional cargo carriage

A bad idea?

by John Southam, Loss Prevention Executive, and David Richards, Director Claims, North P&I Club Amid a shortage of container ship capacity and soaring rates for transporting containerised freight, carriers are increasingly exploring alternatives, including the potential for getting bags, flexible intermediate bulk containers or intermediate bulk containers on board dry bulkers. While more and more bulk carrier operators are considering carrying cargoes that would usually be containerised, not all goods are suited to this shipping method. Those still willing to explore the opportunity should be aware of the associated risks.

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et us start with bagged coffee, a high-value commodity, with current prices around $6.0/kg for arabica beans and roughly half that for robusta. Carrying coffee beans using any recognised method presents challenges for the carrier. The beans are highly hygroscopic, which means they absorb a significant amount of moisture from the air, making them vulnerable to condensation that wets the bag and encourages fungal growth. This risk is exacerbated when the coffee beans – grown in warm, humid regions – are transported to cooler climates, as is frequently the case.

Condensation that forms on steel structures – ‘ship’s sweat’ – is the primary source of wetting. Even when carrying bagged coffee using dry containers as per standard industry practice, the same risk is present: with limited ventilation, moist 30 | Baltic Transport Journal | 6/2022

air is not properly expelled. Cardboard or kraft-paper lining is often used to protect the cargo, but the effectiveness of this method is disputed. Similarly, the effectiveness of building ventilation channels into the stow is unproven, while hold ventilation may also be limited in its efficacy. Dunnage can prevent cargo-to-steel contact, but applying enough to have the desired effect can prove challenging. Such is the risk of wetting damage and the difficulty of preventing it that cargo expert BMT advises against carrying bagged coffee in cargo holds altogether. A further danger in transporting bagged coffee in break-bulk is crushing damage caused by the weight of the cargo loaded above.

Second, chemicals. Some of them, like sodium metabisulphite, have traditionally been carried in containers but are now put in jumbo bags as break-bulk cargo.

If overloaded or poorly stowed, jumbo bags can split, causing their contents to leak into the hold. This not only presents a health hazard to those working in the hold but can also cause damage to adjacent cargo and the surrounding steel structure.

Third, car parts. Parts used in the manufacturing of vehicles are increasingly finding their way on board bulk carriers as break-bulk cargo, usually packed within crates and/or palletised. Shippers must ensure that the crate or packaging affords adequate protection and is properly stowed and secured in the hold.

Carefully scrutinised While adapting to new customer requirements and solving capacity issues to keep trade flowing is nothing new in the shipping industry, requests to carry cargo unconventionally should be carefully

MARITIME

Photos: Canva

scrutinised, notably when dealing with dangerous or high-value loads.

Given reported shortages in reefer capacity, there are particular concerns around high-value goods requiring temperature control, like some pharmaceuticals. For example, carrying such cargo in IBCs across the top of a bulk stow of grain may prevent effective fumigation and ventilation, leading to contamination.

Cover may be prejudiced where unconventional cargo arrangements mean a shipment cannot be carried per a safe and proper system (or if the carriage is imprudent for some other reason). The carriage of rare and valuable cargo may require advanced approval from the vessel manager. Any

change in risk due to the carriage of an unconventional cargo requires prompt disclosure to the protection and indemnity club to ensure that cover remains in place.

Legal advice should be sought when a charterer requests a carrier to transport cargo using unconventional methods.

Depending on the charter-party terms, such an order may be illegitimate, specifically where compliance would be impossible or unsafe. Owners may wish to explore taking a letter of indemnity from a charterer who requests unconventional carriage arrangements.

North P&I is a leading global marine insurer providing P&I, FD&D, war risks, hull and machinery, and ancillary insurance to over 250 million GT of owned and chartered tonnage. The S&P Global ‘A’ rated Club is based in Newcastle upon Tyne, UK with regional offices and subsidiaries in Australasia, China (Hong Kong and Shanghai), Greece, Ireland, Japan, Singapore and USA. North is a leading member of the International Group of P&I Clubs (IG), with over 12% of the IG’s owned tonnage. The 13 IG clubs provide liability cover for approximately 90% of the world’s ocean-going tonnage and, as a member of the IG, North protects and promotes the interests of the international shipping industry. Head to www.nepia.com to discover more.

6/2022 | Baltic Transport Journal | 31

The carbon capture and storage value chain in shipping

Capturing the complexities

by Georgios Plevrakis, Vice President, Global Sustainability, American Bureau of Shipping (ABS) Shipowners and organisations in the maritime industry are considering all available options to expedite their transition towards a low-carbon operating environment while serving an ever-growing transport demand. One area identified with potential for progress – and a business case – is carbon capture and storage (CCS), but the need for scale is considerable.

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ccording to the United Nation’s Intergovernmenta l Pa nel on Climate Change and the International Energy Agency (IEA), the annual global capacity for carbon capture will need to increase from 50 million tonnes of carbon dioxide in 2020 to 800mt of CO2 per year by 2030 – and more than 5,000mt by 2050. This represents a 16-fold increase by this decade’s end and a 100-fold increase by mid-century in carbon capture capacity.

It is estimated that total global storage capacity is between 8,000 gigatonnes (gt) Fig. 1. CO2 separation technologies

Source for all figs.: ABS

32 | Baltic Transport Journal | 6/2022

and 55,000gt, and even the lowest estimate far exceeds the 220gt of CO2 expected to be stored from 2020 to 2070, according to the IEA’s Sustainable Development Scenario. About 75% of the estimated storage is onshore in deep saline formations and depleted oil & gas fields, while the remaining quarter of capacity is offshore.

The science behind capturing CO2 For shipping to decarbonise, choosing the right pathway will be complex; but all paths will require using carbon capture technologies at scale alongside low-carbon

fuels. The carbon technologies include CCS, Direct Air Capture (DAC) and bio-energy with CCS, which is the process of capturing and storing CO2. Carbon can be separated using several methods, including membranes, solid sorbents and liquid sorbents, all of which have been proven effective in onshore carbon capture projects.

The capture of CO2 can occur pre-combustion (syngas), post-combustion (endof-pipe solutions) and by using oxyfuels.

The captured CO2 is then compressed into a liquid state and transported by pipeline, ship or truck. The post-combustion

MARITIME Fig. 2. Carbon dioxide shipping chain

method yields a product that requires additional drying, purification and compression before transportation. This is the most mature technology, but the low partial pressure of the CO2 in the flue gas is a big downside.

DAC technologies directly capture CO2 from the atmosphere instead of a point source. The captured material can be stored in deep geological formations, used in food processing or combined with hydrogen to produce syn-fuels. It is an approach receiving increased focus from both private and public sectors.

A unique business case From the shipping industry perspective, transporting CO2 by ship has a unique business case. The schematic of the CO2 shipping chain from the source to storage illustrates the process of CO2 capture from a power plant, liquefaction and storage. It is then loaded onto a CO2 carrier, delivered to the destination port, and connected to the endpoint transmission line.

The CCS value chain is extensive and has implications well beyond the shipping industry, which will nonetheless play a crucial role in transporting CO 2 between the points of capture and storage/industrial utilisation.

Regarding technical feasibility, the longdistance transportation of CO2 poses no more risk than natural gas transmission since the asset technology is mature and many CO2 pipeline networks already exist.

However, pipeline transportation costs depend on distance. As such, shipping can be considered for specific applications.

It is estimated that the CO2 as a commodity market could increase by 1-7gt of CO2 per year by 2030 as new routes to CO2 utilisation are unlocked, such as usage in fuels, chemicals and building materials.

The transformation of CO2 into low-carbon fuels could be the earliest large-scale application of CCS technology, overcoming

the challenge of electrifying industrial heat and creating a roadmap towards producing low-carbon fuels in volume.

Projects in development Studies have shown that vessel shipment is economically preferable to pipelines for distances greater than 700 km and quantities exceeding 6.0mt of CO2 per year. As of April 2022, four liquid carbon dioxide (LCO2) carriers are in operation (mostly in service for the food and beverage industry). Three others are currently on order by various operators, including for Equinor’s Northern Lights project, built specifically to service the burgeoning need for transporting liquid CO2 for offshore sequestration.

The Northern Lights project involves developing infrastructure to transport CO2 from capture sites by ship to a terminal in western Norway for intermediate storage before being transported by pipeline for permanent storage in a reservoir 2.6 km under the seabed. This project is one component of the Norwegian government’s Longship CCS project and is expected to have a capacity of 1.5mt of CO2 per year as part of phase one. Once the CO2 is captured, it is expected to be transported by newly delivered ships, injected and permanently stored underneath the North Sea. The plan is to expand capacity by an additional 3.5mt based on the market demand.

There are many other initiatives in the pipeline, such as the Acorn CO2 SAPLING project in the UK. Additionally, offshore storage capacity has been identified off the coast of Japan (considered a fit case for source-to-sink matching due to the presence of concentrated CO2 emitters near the coastline).

Vessel demand According to a 2018 study by the European Zero Emission Technology and Innovation Platform, it is estimated that 600 vessels will be required to support CO2

transport for the burgeoning CCS sector in Europe. Although the study was EU-specific, the CO2 carriers will support the development of the carbon value chain worldwide.

As of April 2022, three vessels have been ordered for offshore sequestration purposes, and if the market follows the IEA estimate of needing a 16-fold increase in CCS capacity by 2030 and a 100-fold increase by the middle of the century, it is estimated that the number of vessels required will be 48 and 300, respectively.

In response to the growing demand, Hyundai Heavy Industry and Korea Shipbuilding & Offshore Engineering have developed a design for a new 40,000 m 3 LCO2 carrier. ABS and Daewoo Shipbuilding & Marine Engineering are developing designs for a 70,000 m 3 very large LCO2 carrier and have recently obtained design approval. The 853 by 145 ft vessel will be one of the largest LCO2 carriers certified by a classification society.

The offshore sequestration market may take off more quickly than the onshore market due to permitting complexities near population centres and the need for pipelines to transport the CO 2 .

Although onshore storage capacity is extensive, it may not convert into viable projects. Depending on the momentum of initial project successes, offshore projects may provide a path for accelerating the deployment of LCO2 vessels.

Impact on alternative fuels As an end-of-pipe solution to reduce vessel emissions, CCS is still in its infancy; current land-based CCS equipment cannot be used on ships because its power consumption and space requirements present huge challenges. Also, the system’s capture efficiencies are not proven, and storage on board can be difficult.

While solidification has been proposed to minimise the impact of wave movement, integrating a CCS system on board would 6/2022 | Baltic Transport Journal | 33

MARITIME Fig. 3. IEA’s estimates for onshore vs offshore CCS market – in million tonnes of CO2 (2030 and 2050)

industry. Though still in the early phases of their development in offshore applications – in particular, the DAC technology is at a very early developmental stage and there remain significant efficiency challenges related to its implementation – carbon capture technologies will nevertheless provide a proven and realistic solution to lowering emissions during the transition phase away from the use of fossil fuels.

Transporting captured carbon onboard ships requires efficiency improvements for the technology to provide a sustainable long-term solution. Significant uptake

Photo: Northern Lights

involve additional capital and operational costs from retrofitting. There would need to be a clear value chain for captured carbon to be economically viable. Nonetheless, the carbon value chain presents a massive opportunity for the oil & gas, maritime and shipping industries, as well as for engine and turbine manufacturers.

Control system manufacturers that design onboard CCS devices will need to find ways to make their products costcompetitive and resolve the CO2 storage, power consumption and space issues on vessels. Once proven technically feasible, 34 | Baltic Transport Journal | 6/2022

end-of-pipe solutions can be rapidly deployed to support decarbonisation.

Maritime carbon economics Driven by the need for decarbonisation, carbon economics is emerging as a major new force in the maritime

of CCS technologies will be realised when a set of enablers – primarily the maturity of onboard CCS storage technologies and the further development of liquid CO2 carrier designs – is in place and can facilitate the development of the broader ecosystem.

Founded in 1862, the American Bureau of Shipping (ABS) is a global leader in providing classification services for marine and offshore assets. Our mission is to serve the public interest as well as the needs of our members and clients by promoting the security of life and property and preserving the natural environment. ABS’ commitment to safety, reliability and efficiency is ever-present. Visit ww2.eagle.org to learn more.

Yards and vendors must act promptly to comply with upcoming IACS cyber security requirements

From aware to ready

by Jarle Coll Blomhoff, Group Leader Cyber Safety & Security, Control & Bridge Systems – Ship Classification Maritime, DNV The International Association of Classification Societies’ (IACS) unified requirements (URs) for cyber security – due to come into force on 1 January 2024 – herald a shake-up for the supply industry.

They will require the full spectrum of critical onboard control and navigation systems to comply.

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ew technology and increasing automation and digitalisation are combining to streamline the efficiency of the maritime industry. But along with the increasing number

of integrated vessels featuring multiple interconnected systems comes the threat of remote attacks that can potentially gain access to or impact critical onboard control systems.

Optimal cyber security needs to be in place to ensure vessels remain in operation and to safeguard the safety of the crew, passengers, assets, and the environment.

It is critical to implement optimal preventative measures against cyber attacks Shipping is the backbone of global trade, and the potential disruption that attacks could cause, not to mention the danger to life and property, is a clear temptation for cyber criminals and state-sponsored hackers. It is imperative to protect both corporate infrastructure and individual ships amid increasingly high vessel connectivity. Most people are aware of the risks; 36 | Baltic Transport Journal | 6/2022

the focus is now on implementing optimal preventative measures.

While corporate IT systems are considered ‘mature’ with a lot of attack surfaces, attacks are still most likely to have a financial impact on a company rather than directly on vessel operations (low-consequence).

However, operational technology (OT) on board a ship or offshore mobile asset is

increasingly connected to shore-based IT systems, providing a potential ‘back door’ for attackers. Cyber security must protect this low-maturity, high-consequence digital infrastructure so that a ship can stay safe and moving despite being attacked.

You can’t risk losing the main engines or any other system considered essential and important under SOLAS rules.

MARITIME New IACS unified requirements focus on cyber risks of on-board systems While regulations like the International Maritime Organization’s cyber resolution from 2021 require owners, operators, and managers to consider overall cyber risks, there are no concrete requirements at the systems level. However, this is now changing, as IACS just published new URs that will oblige both yards as system integrators and system vendors to build cyber security barriers into their systems and vessels.

The URs will apply to everything computer-based on-board such as main-engine control systems, steering, cooling systems, fire detection, communications systems (including public address systems), and navigation systems – basically, anything that is integral to making the ship move, navigate, and operate safely.

Our team is also working on autonomous shipping, where class qualification of autonomous pilot tools such as object

detection will also be very important. Any kind of decision-support system that provides critical navigation advice to the captain and contributes directly to steering the vessel will also be subject to the URs in future.

The URs will apply to all newbuilds contracted after 1 January 2024 and will also serve as non-mandatory guidance for existing ships as well as new vessels contracted before that date.

DNV is ready to apply IACS-compliant cyber secure rules to newbuilds The URs are minimum prescriptive requirements agreed by all IACS members. Any class society appointed to oversee a newbuild naturally deals with the shipowner and the yard, but from that date they will also need to check that all vendor systems meet the requirements. How individual class societies implement the URs can vary,

but for DNV-classed vessels our organisation is ready now to apply its existing IACScompliant Cyber Secure rules to existing vessels and current newbuilds, as well as work closely with system suppliers to support a smooth transition in 2024.

With more than 100 vessels contracted so far for voluntary approval, as well as

a larger range of automation and navigation system suppliers type-approving their systems with us, we believe DNV and the industry is on a good path. DNV class rules and the IACS URs use the IEC 62443 standards that address OT cyber security in a holistic way, including both technical and process-related aspects.

New URs ensure holistic cyber security of on-board equipment Firstly, UR E26 aims to ensure the secure integration of both OT and information technology (IT) equipment into the vessel’s network during the design, construction, commissioning, and operational life of the ship. This UR targets the ship as a collective

entity for cyber resilience and covers five key aspects: equipment identification, protection, attack detection, response, and recovery.

Secondly, UR E27 aims to ensure system integrity is secured and hardened by thirdparty equipment suppliers. This UR provides

requirements for cyber resilience of onboard systems and equipment plus additional requirements relating to the interface between users and computer-based systems onboard, as well as product design and development of new devices before their implementation on board.

Source: DNV

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MARITIME

Photo: Canva

System delivery across different industries DNV believes that one strength of the new URs is that they are built on concrete requirements and based on internationally recognised IEC 62443 standards for control-system cyber security. This will greatly

support suppliers that deliver their control systems across different industries.

It is also positive that the two URs are complementary. UR E27 lets suppliers focus on developing cyber-security barriers through,

for example, a type approval of their system, so that yards and owners will have a range of pre-approved systems to choose from when implementing the requirements of UR E26 into their vessel designs and operation.

Steps vendors should take in view of the time pressure The fact that yards and vendors will have to verify critical systems to meet the requirements represents a big change for the industry given that control systems have a long lifespan and development processes are timeconsuming. Especially smaller vendors are likely to face resource challenges meeting the requirements within the tight time frame.

There are less than two years left and vendors and yards will need this period to assess and verify that their control systems are compliant. We encourage all vendors to,

firstly, go through their portfolios and systematically assess which products/systems can they make cyber secure enough to still be in use after 1 January 2024. This pertains especially to vendors offering digital services in the cloud to prevent leakage of, for example, key environmental data.

Vendors should then make a detailed analysis of what needs to be done, and execute those actions followed by testing and getting type approval. To keep systems safe, they will need to look at attack surfaces,

log-in security barriers, and configuration protection. They will also need to protect USB removable device interfaces and network interfaces, especially links to shore, as well as implement consistent patching so software is continually up-to-date.

They should also ensure that back-up and recovery procedures are in place to return the system to a safe state. If a system goes down, you should be able to recover it sufficiently to continue critical operation and ensure key technical functionality.

How can we help?

DNV can help in two main ways, by type approval for equipment and systems, either separately or as part of its Cyber Secure notation for a new ship, as well as by providing advisory services from its independent DNV Accelerator unit (which can help vendors examine all the above challenges on their

journey towards type approval). Our experts aid customers with support system risk assessment/improvements, penetration testing and training in a third-party witnessing role, as well as system documentation if desired.

Even before the new IACS URs come into force, DNV is already conducting type

approval of various automation and control systems with major suppliers on a voluntary basis. For example, DNV has already type-approved key systems from ABB, Kongsberg and Wärtsilä, and is working on the same for several other control and navigation systems.

Type-approved systems reduce risks and documentation work of newbuild projects We are fortunate to be the preferred class partner major suppliers choose to work with on type approvals. They value us as a discussion partner based on our experience and expertise. We take the process very seriously as it ref lects our brand value.

In addition, when vendors choose to get a system type-approved by us, it will reduce risks and uncertainties of newbuild projects, as well as reduce the documentation that each vendor needs to provide for each vessel.

Detailed cyber security documentation is something that a supplier would like to limit

the distribution of, hence a type-approval certificate plays more than one role.

We encourage all yards and vendors who are in doubt over what the upcoming IACS URs will mean for them and what to do to reach out. Whatever challenges you are facing, I am 100% certain we will be able to support you.

DNV is one of the world’s leading classification societies and certification bodies, helping businesses assure the performance of their organisations, products, people, facilities and supply chains. DNV delivers worldrenowned testing, certification and technical advisory services to a broad range of industries, including the maritime sector and the energy value chain (renewables, oil and gas, and energy management). Visit www.dnv.com to find out more.

38 | Baltic Transport Journal | 6/2022

Re-drawing navigation systematically to make it safer – for people, ships, and animals

The OCEAN project

by Fitzwilliam Scott Navigational accidents at sea are infrequent, but even so, when they do happen, they can have a devastating effect. Arguably, risks are increasing as ships grow larger and world trade expands. Even the best technology can create problems if human factors are not considered when designing ships, vessel equipment, human-machine teaming & interaction, and the planning and execution of the jobs on board.

That is why the European Commission has awarded Horizon Europe funding to the Operator-Centred Enhancement of Awareness in Navigation (OCEAN) project: to improve navigational safety for all vessels.

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CEAN – launched in October 2022 and due to run until 2025 – is focused on enhancing operator navigational awareness to reduce the frequency of severe accidents like collision and grounding, likewise to preserve the life of marine mammals and mitigate the risk presented by floating obstacles to smaller ships.

The initiative will contribute to an improved understanding of accident root causes and strive to reduce the resulting human, environmental, and economic losses through socio-technical innovations supporting ship navigators.

The consortium behind the project, coordinated by Western Norway University of Applied Sciences, includes 13 partner organisations across seven different European countries representing the industry, academia, NGOs, and end users.

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Fundamental recognition The ambition of OCEAN is to contribute to the mitigation of navigational accidents by supporting navigators to do an even better job than they do presently. The project consortium will address the most pertinent elements contributing to events-turning-accidents: training, technical, human or organisational factors, operational constraints, processes & procedures, and commercial pressures.

It will also recommend improvements and amendments to regulations, standards, and bridge equipment design approaches.

A critical aspect of the project will be enhancing human decision-making rather than replacing it, a clear recognition – in this age of all-things-technology-&-automation!

– that technological solutions should support human decisions. Another essential project facet will be its focus on all maritime navigation decision-makers: leisure, fishing,

commercial, naval, etc. For instance, the danger of lost containers may be reported by a freighter but could cause a devastating accident with a cutter or sailboat. The project will also pay attention to protecting sea mammals, such as whales and dolphins, from all forms of watercraft – thus creating an improved environment for coexistence.

The project recognises that mariners are fundamentally very competent at what they do. Being a product of skills honed by experience, careful training, adequate equipment, effective practices, rules & regulations, as well as a strong professional culture, navigators safely steer the worldwide commercial fleet that supports the globe with an essential service. From this position, OCEAN seeks to enhance navigational awareness ‘on the spot’ and to improve the performance of evasive manoeuvring to avoid collision with near-field threats.

MARITIME

Photo: Canva

To that end, the project will deliver and demonstrate several human-centred innovations. For example, a 4D situation awareness display will improve the visualisation of navigational hazards, integrating current bridge information systems with marine mammals and lost floating containers detection & tracking capacity specifically developed within the project.

Sharp as a navigator A key OCEAN project convergence point is the overall navigation situation assessment made by the operator. Superior to the discrete data currently available on radar or the electronic chart display and information and automatic identification systems, the objective is to provide an integrated, designed-for-the-purpose, uncluttered, and focused presentation of near-field threats and navigational hindrances. This way, the operators’ mental load will be eased while sharpening their attention and awareness, eventually leading to significantly fewer accidents and incidents – scaled for all mariners regardless of the size of their craft.

The vehicle for this purpose is an improved situation awareness display, the design process being co-creative and humancentred. Considering the completeness of the information provided, adding presence data on marine mammals and stranded containers is needed. Yet, while visualising data from present bridge systems is a question of interfacing primarily, obtaining data on the latter two will require a substantial data collection, processing and distribution effort.

The project will also design and implement a European navigational hazard data

infrastructure to feed multi-source observations and hazard predictions relating to floating containers and large aggregations of marine mammals into the existing distributed maritime warning infrastructure.

OCEAN seeks to transfer this data ecosystem to a relevant European organisation for deployment and maintenance. The project aims to demonstrate practical abilities to improve safety, protect the environment, and enhance commercial productivity.

Industry stakeholders will also be invited to join the project on a volunteer basis but with opportunities to engage in the conversion, influence development, and benefit from conducting real-life trials.

En route to new standards The common wisdom is that the maritime industry is somewhat conservative, which has slowed the uptake of user-experience-infocus technology. It is a viewpoint arguably supported by current international standards, which lend themselves to designing, implementing and testing specialist bridge equipment as individual components rather than systems. Only a single global standard relates to the bridge from this vantage point.

Conceptually, however, the OCEAN project subscribes to the socio-technical worldview where humans, organisations,

and technology are considered the main constituents of a total work system. The project partners ascribe to systems engineering, an interdisciplinary field of engineering and management that focuses on designing, integrating and managing complex systems over their life cycles. Moreover, the project work will be governed by human-centred thinking and methodologies.

It is, at present, a universal assumption that when a ship is equipped per the carriage requirements of the International Convention for the Safety of Life at Sea, the navigator has adequate technical support to navigate and manoeuvre safely.

However, the International Maritime Organization’s equipment performance standards do not explicitly include considerations relating to factors like fatigue, boredom, inadequate bridge procedures & resource management, commercial pressures, display clutter, improper settings of technical devices, limited experience, and environmental challenges (poor weather, among others) – and how these, separately or in conjunction, can cause the human operator to lose the overview. It is within our technological reach to make them, alongside other non-human ‘sea users,’ feel safe, as well as de-risk big-&-small sailing as far as possible.

Co-funded by the EU research & innovation agenda Horizon Europe and UK Research and Innovation (with UK participants supported by grant numbers 10038659, Lloyd’s Register, and 10052942, The Nautical Institute), the OCEAN consortium of 13 members represents seven European (coastal) countries. Head to ocean-navigation-awareness.eu to meet the project partners, stay up-to-date with the initiative’s progress, and explore the opportunities of becoming an industry stakeholder with advanced access to deliverables.

6/2022 | Baltic Transport Journal | 41

Sustainability demands a well-to-wake approach to new fuels

Into perspective

by Paul Delouche, Strategy Director, Bureau Veritas Marine & Offshore Decarbonising shipping in isolation does not make sense. If we are to make a genuine difference for the climate’s sake, then we need a cross-sector approach not only to develop and scale up new fuels – but also to properly evaluate the environmental impact of alternative fuel options, from their production to their use on board. If we are to achieve true decarbonisation in shipping, we need to assess whether the different fuel options gradually being adopted will actually reduce the amount of greenhouse gas (GHG) emissions released in the atmosphere. And we can only do that by taking a well-to-wake (WtW) approach – by looking upstream and across sectors to understand the production and logistics changes occurring as society as a whole develops new sources of power and new fuels.

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he shipping sector’s current decarbonisation regulations are based on a tank-to-wake (TtW) approach. To this day, the International Maritime Organization’s Data Collection System and Carbon Intensity Indicator regulations do not include emissions before onboard combustion. However, the EU has notably proposed a WtW approach when drawing up its FuelEU Maritime regulations, which are under discussion.

This is an important development: TtW and WtW calculations can vary significantly. Carbon-free fuels can generate higher WtW emissions than the fossil fuels that they are intended to replace, depending on how they are produced.

Our recent white paper, Alternative Fuels Outlook for Shipping – an Overview of Alternative Fuels from a Well-to-Wake Perspective, reports that typical WtW emissions of ammonia and liquid hydrogen, as currently produced from natural gas, are typically higher than those of liquefied natural gas (LNG), marine gas oil and very low sulphur fuel oil, based on 100-year global warming potential (GWP).

Therefore, to decarbonise shipping, ammonia and hydrogen – and indeed all new fuels – will need to be manufactured from low-carbon supply chains.

This positions electro-fuels (e-fuels), produced from renewable energy, as one of the most promising options to achieve true decarbonisation in WtW terms, alongside second-generation biofuels produced sustainably from renewable feedstocks.

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Upstream variation All fossil-based fuels emit more GHG emissions throughout their entire value chain than second-generation biofuels and e-fuels.

Methane slip is a crucial consideration when using LNG as fuel, as it increases a ship’s GHG emissions, especially in low-pressure engines (although still delivering a GHG emission reduction vs traditional marine fuels).

Methane leaks are another critical consideration. Upstream methane emissions occur during extraction, processing, transportation, and onboard handling before combustion. These leaks depend highly on the production pathway and location. For example, shale gas production sites are likely to have more leaks than conventional natural gas wells.

The WtW emissions of e-fuels will depend on the type of renewable energy used to produce them. For example, hydropower generally has a lower GHG emission factor than solar power: green hydrogen produced with the former will therefore be greener than one made with the latter. However, WtW emissions may also depend on how the photovoltaic solar panels or the cement used for the hydropower infrastructure are manufactured.

Even within the same production pathway, a fuel’s impact may change depending on how it is delivered. A fuel produced with renewable energy but transported over long distances to its final use point may have higher WtW emissions than a fuel produced and used locally. For example, e-methane produced from solar panels and transported over long distances in

a cryogenic state will, in general, have greater WtW emissions than locally consumed e-methanol produced from a wind farm.

The complexity of measuring emissions The downstream components of WtW calculations vary according to each ship’s design. TtW outcomes can, for instance, be impacted by using fuel cells, combustion engines, turbines, or the installation of emission abatement technologies.

Additionally, in the case of ammonia, for which no engines are currently commercially available, the impact of nitrous oxide (N2O) emissions on overall GHG emissions remains uncertain. This creates the potential for a new emissions problem.

According to the Intergovernmental Panel on Climate Change, N2O has a 100-year GWP 273 times higher than CO2’s.

Hydrogen is an indirect greenhouse gas, reacting with other GHGs in the atmosphere to increase their GWP. A recent UK government study has estimated that fugitive hydrogen has a GWP of between 6.0 and 16 over 100 years.

In addition to GHG emissions, understanding air pollution from NOX, sulphur oxides (SOX) and particulate matter is essential when assessing alternative fuel contenders. These pollutants can affect climate change and also have a direct impact on human health. LNG, liquefied petroleum gas, and methanol all significantly reduce air pollution. Theoretically, SOX emissions could be reduced by 99%, though a small amount will be emitted from the pilot fuel

SUSTAINABILITY

Photo: Canva

used in combustion (between 1.5% to 5% of pilot fuel used in dual-fuel engines).

The ethics of biofuels Biofuels have low SOX emissions and are a turnkey solution that can be used in existing engines with some precautionary measures and offer immediate CO2 emission reductions. Biomass to make biofuels is theoretically available everywhere, limiting the transportation required for distribution. They can also be used in blends with fossil fuels to reduce emissions without needing modifications to a vessel’s tanks or engines. In an ideal scenario, with production increasing sufficiently, ships could refuel sustainably at any port. However, the feedstocks and factories for producing second- and third-generation biofuels need further development to supply the necessary volumes – and here, too, examining production pathways is essential.

Sustainable development requires an integrated approach that encompasses social and environmental concerns, which is a major consideration for the uptake of biofuels. The biomass used to make them must itself be produced sustainably, as the first step in the biofuel supply chain. Yet, there is currently no globally accepted standard or certification available to broadly assess the sustainability credentials of biofuels from end to end.

Additionally, certain resources that can be used as biomass, such as fields, forests and crops, may be needed to meet other, more basic human needs. First-generation biofuels, produced from purpose-grown food crops, may create undesirable competition with food markets. Extra biofuel demand could also spur additional land to be converted for feedstock cultivation. The ethical allocation of resources is fundamental to the concept of sustainability and, therefore, should be non-negotiable when planning biofuel supply chains and production.

Then again, developing the needed infrastructure to produce advanced biofuels (second- and third-generation) using mostly waste materials from forestry activity and agricultural residues could be seen as an opportunity to create jobs locally and build a sustainable bio-economy.

The real climate impact of new fuels Decarbonising the maritime sector using new fuels will require a tremendous amount of low-cost renewable energy. Based

on average e-fuels production efficiency of 50%, it is estimated that the shipping industry would today require 20-24 exajoules of renewable electricity if e-fuels were to replace all fossil fuels used by the entire shipping sector (the global primary energy consumption totted up to about 600 exajoules in 2019, of which some 9.0EJ came from wind & solar).

Large-scale access to renewable electricity will be pivotal to producing e-fuels and hydrogen. Additionally, a cross-sector approach will be needed to share resources such as wind and solar power between maritime and other sectors. In addition, ammonia (and therefore hydrogen) is used in fertilisers and is vital to securing the world’s food supply.

This sort of a consideration is beyond the scope of WtW calculations but necessary to achieve true sustainability. Given the complexity and importance of the task of decarbonising shipping, the best way forward is to collaborate: to share knowledge and resources across the industry and beyond, having the complete picture of what real impact new fuels will have on the climate.

Bureau Veritas is a world leader in laboratory testing, inspection and certification services. Created in 1828, the Group has 80,000 employees located in more than 1,600 offices and laboratories around the globe. Bureau Veritas helps its clients improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility. Visit group.bureauveritas.com to discover more.

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Powering zero-emission vessels with hydrogen fuel cells

Here & now

by Thomas Therkild Petersen, Product Line Manager Marine, Ballard Power Systems Europe Hydrogen fuel cells are successfully powering thousands of commercial vehicles on roads around the world. Fuel cells are also being integrated into marine vessels building on their success in the heavy-duty transport sector. Why? Because fuel cells are plug-and-play zero-emission replacements for internal combustion engines. They are an essential technology that will help the marine industry address its greenhouse gas emissions (GHG-E) on the water and in ports.

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or shipowners and operators globally, zero-emission mandates and regulations are a fast-approaching reality in an industry which currently accounts for 3% of the world’s GHG-E. However, with a worldwide commercial fleet of 90k+ ships, ‘going green’ is not easy.

The pace of decarbonisation has largely depended on new and emerging technologies, often involving long development time, proof of concept, and pilot testing.

This is where Ballard’s FCwave™ fuel cell module is breaking new ground, typeapproved by DNV earlier this year as the first implementation-ready solution for next-gen zero-emission vessels. This type approval represents a breakthrough in commercialising fuel cell modules for ships and a significant industry recognition certifying that FCwave™ meets the stringent safety, functional, design, and documentation requirements necessary for decarbonising the marine industry.

Modular & scalable Hydrogen fuel cells are compatible with modern electric and hybrid architectures – and they generate the electricity that powers the vessel. Like batteries, they produce electricity, but hydrogen fuel is the energy carrier with fuel cells – meaning the power system will produce electricity for the ship for as long as hydrogen is 44 | Baltic Transport Journal | 6/2022

available. FCwave™ is a high-power, adaptable power generator in a hybrid electric system that incorporates fuel cells and batteries working seamlessly together to deliver efficient, zero-emission power.

The modular & scalable design of fuel cells (200kW/module) facilitates easy and adjustable deployment, which integrators can configure for specific vessel requirements. They provide long-range operations with consistent power delivery throughout the duty cycle. Refuelling is fast, and fuel cells are proven reliable in many critical heavy-duty applications, with long service life and few maintenance intervals.

Hydrogen is a safe and f lexible energy storage solution, highly suitable for marine vessels. Like onboard modules, the refuelling infrastructure is scalable and can easily grow along with the f leet as hydrogen consumption increases.

Additionally, large-scale projects focused on producing hydrogen from renewables are emerging worldwide. When a ship is fuelled with renewable hydrogen, it becomes a true well-to-wake zeroemission vessel, as the only ‘emissions’ released are water vapour and heat.

New & existing The first fuel cells are already beginning to prove their value at sea and in

ports, currently powering many smaller vessels and handling equipment. In November 2022, two 200kW FCwave™ fuel cell modules were successfully installed on Norled’s Hydra. With the first sea trials beginning in December 2022, Hydra will start using liquid hydrogen and proton exchange membrane (PEM) fuel cells as the world’s first ferry.

Taking the leap into commercial passenger operations with one of Norway’s largest ferry operators, we can showcase how zero-emission operations can be made possible here & now. The technology is further being harnessed for use in larger ships, and in 2023 several other vessels will embark on their maiden voyages powered by zero-emission fuel cells.

The fuel cell technology also represents a future-proof solution for retrofitting vessels, allowing shipowners to extend the lifetime of their fleet, reduce fuel consumption, and adhere to new and adaptive regulations set forth by the International Maritime Organization and the EU. As a case in point, Future Proof Shipping’s FPS Waal will be retrofitted with six FCwave™ modules, giving the inland waterways container vessel a fuel cell capacity of 1.2MW. The vessel’s internal combustion engine will be removed, while a new zero-emission propulsion system (including PEM fuel cells from Ballard,

SUSTAINABILITY

FCwave™ installation on board Hydra; photos: Ballard Power Systems

hydrogen storage, battery packs, and an electric drive train) will be installed to sail 100% green. Up & running again, FPS Waal will sail on the 240 km-long stretch between Duisburg and Rotterdam.

Positive catalyst The marine industry is undergoing significant changes, and we can expect more regulations to be implemented in an effort to reduce GHG-E. Undoubtedly, the time is now to shift to zero-emission technologies.

FCwave™, as the first commercially available solution – designed for and together with the marine industry – is a significant step in accelerating the adoption of hydrogen power for vessels of various sizes, serving short- and long-haul routes, providing shipowners and operators confidence in fuel cells as a viable, zero-emission technology.

The solution offers ease of integration, shorter implementation time, and a reduction in overall cost through proven technology. Thus, ship operators now have access to a deployment-ready alternative that can pave the way for volume applications, including fleets. Also, the system uses proven components from Ballard’s four decades of experience with heavyduty applications, delivering reliable performance, high-power density, and flexible onboard integration.

For operators transitioning to zeroemission propulsion systems for marine

Photo: Norled

Photo: Future Proof Shipping

applications, hydrogen and fuel cell solutions are now certified to offer the most promising route to meeting future emission requirements. Modular & scalable hydrogen

fuel cells have what it takes to be a catalyst in accelerating net-zero technology to meet the ambitious global targets of halving shipping emissions by mid-century.

At Ballard Power Systems, our vision is to be the leading global provider of innovative clean energy solutions offering superior performance at a reduced operating cost. We are focused on applications where hydrogen fuel cells have a clear advantage and we are working on accelerating fuel cell technology adoption across various industries. Go to www.ballard.com to discover more.

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Transporting and storing pieces of art and culture – sustainably

The art of sustainable transport

by Roman Wisst, Corporate Development, Hasenkamp The goal is clear: the European Union aims to be carbon-neutral by 2050. This would make Europe the first continent to produce only unavoidable emissions, which would then also be fully offset. There is a long way to go to hit this target, with many forks in the road and uncharted territory that must be actively explored. For several years, the Cologne-based special logistics provider Hasenkamp has been gradually adapting its business model to these new requirements, focusing on sustainable improvements that directly impact the transport, warehousing, and packaging of works of art and cultural goods.

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ounded in Cologne in 1903 and nowadays owner-managed by the fifth generation, Hasenkamp has always combined tradition and innovation. The credo is to preserve what is good, to be open to new things, and to strive for constant improvement. Under the umbrella of the Hasenkamp Group, more than 1,000 employees in 28 countries operate strategically towards environmental, social and governance criteria and, as logistics providers, place a clear focus on the sustainability of offered services, including the storage, packaging, and transport of art and cultural goods.

Emission-free storage of art Since 2010, Hasenkamp has committed itself to active environmental and energy management (in the course of ISO 14001 and 50001). Concrete goals are pursued, such as continuously reducing energy consumption or cutting back on waste.

Furthermore, Hasenkamp has been recording and analysing its services’ carbon footprint for a good two years – aiming to avoid or at least reduce CO2 emissions.

“Many measures that would be necessary and desirable are not yet possible or economically viable today. For instance, charging stations for electric trucks are simply not available on a large scale. In 46 | Baltic Transport Journal | 6/2022

order to achieve the EU’s climate targets, we need a more courageous, technologyneutral spirit of innovation at all levels of the industry. We can immediately tackle some of these issues – but then we also have to bear the additional costs together,” says Thomas Schneider, the Group’s CEO. As such, significant improvements to the sustainability of art logistics are possible here & now.

High demands are placed on storing art and cultural objects, which usually entails high energy costs. Since 2008, Hasenkamp has been counteracting this with a pioneering storage concept: the Group’s art depots have 45 cm thick wall and ceiling elements, making the buildings inert to external temperature changes. In addition, the entire energy requirement for heating and air-conditioning is provided by geothermal energy. The passive structure-like depots maintain the ideal museum conditions of 20°C and 55% humidity with particularly low energy consumption. The Hasenkamp Group is thus the world’s first art logistics company to operate emissionfree art depots.

Furthermore, to tackle the remaining indirect CO2 emissions from electricity use, Hasenkamp and partner companies within the Group are gradually furnishing the art depots with photovoltaics. These systems will make the facilities green and

self-sufficient energy-wise, producing surplus power as an added benefit, thus earning them the PlusEnergyDepots name.

The packaging of art – the art of packaging The storage and transport of art and cultural objects require special packaging. The respective ‘cargo’ basically determines the type of packaging – the use and reuse of materials, hence the overall sustainability.

Hasenkamp has been producing highquality, reusable climate crates for over 45 years. Some two decades ago, we pioneered the so-called Vario crate – both in the form and as a rental system. It has an individually adjustable, variable inner frame that securely fixes objects of different sizes without using additional padding material. The crate pool comprises more than 1,000 rental climate crates in various sizes, the reuse of which minimises the needed resources (this alone can preserve over 200 trees annually).

All packaging solutions of the Hasenkamp Group are produced by inhouse manufacturers, who primarily rely on renewable raw material – wood (84% of which comes from Europe). This approach is rooted in a clear decision against using less sustainable plastic containers – out of ecological and conservation considerations.

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Photos: Hasenkamp

A cutting software algorithm ensures minimal waste while what is still unavoidable is kept in closed material cycles, with, e.g., the upholstery foam cuttings returned to the supplier and recycled. Today, up to 98% of the materials used (such as insulation, add-on parts, or crate handles) can be reused or recycled.

Furthermore, our research and development department is working on new sustainable and functional packaging solutions.

This work results, among others, in innovative manufacturing processes or the use of lightweight woods that halves the weight of certain transport crates, thus also the corresponding transport emissions. Self-erecting crate seals, designed to permanently withstand crate pressure over the entire product life cycle, are another example of optimisation. An environmentally friendly waterbased varnish gives the Hasenkamp transport boxes a chic, functional appearance.

Getting it down to a fine art Some 57% of the Hasenkamp f leet complies with the most modern Euro-6 standard (the rest with Euro-5). These

figures conceal potential savings and low air pollutant emissions, especially because more and more e-vehicles are being added. The f leet now includes its first electric vehicles, which transport staff and work materials emissionfree, chief ly over short distances and in urban areas. The company has recently invested in digital f leet management to make its art logistics more sustainable. By improving capacity utilisation and reducing the incidence of deadheading alone, dispatchers can reduce carbon emissions by around 5%.

Connecting Hasenkamp Group’s network of around 40 branches intelligently enables keeping empty runs to a minimum.

In addition, an artificial intelligence-based transport management system supports our dispatchers in sustainable order planning.

During the journey, a telematics system uses

current traffic information to calculate the most ecologically sensible route. The software also reflects behaviour and recommends a fuel-saving style to the drivers.

Trucks and sprinters have been proven to drive below the industry average.

Increased vehicle utilisation is yet another piece of the sustainable transport puzzle. If allowed, consignments heading in the same direction from different clients can be transported together over a large part of the route. Depending on the carried object, Hasenkamp also examines alternative modes of transport, preferably by rail and sea, as these offer evident eco-gains.

Hasenkamp sees itself as a pioneer and trailblazer – a performer in sustainability.

This mindset incentivises us always to go further, never to be satisfied, and to paint art logistics with increasingly more sustainable brushes.

We are a group of 11 international, medium-sized logistics companies represented in 28 countries at over 40 locations and employing 1,000 employees. We stand for value-oriented project logistics: transport, storage, and handling of high-value and delicate artefacts.

Head to hasenkamp-group.com to discover more.

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The structural economic reform challenges for Xi’s 3rd term

REPORT

Is this time different?

by François Chimits, Analyst, Gregor Sebastian, Analyst, Jacob Gunter, Senior Analyst, and Max J. Zenglein, Chief Economist, Mercator Institute for China Studies (MERICS) In his report at the 20 th party congress, Xi Jinping outlined the success of his previous term in office while also building upon his vision for the future of the People’s Republic. Throughout the report were a wide range of development goals that are familiar to followers of China’s policy agenda.

While some of the oft-mentioned goals are simpler to make measurable progress on – issues like administrative reform or support for industrial clusters – other, more structural goals that demand considerable change and upsetting of vested interests also reappeared.

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mong that range of issues are five structural reforms to broader development goals that Beijing has repeatedly struggled with advancing. Importantly, these are areas in which the long-term

stated policy goals have not meaningfully changed between generations of leadership, unlike, for example, the liberalization of state-owned enterprises (SOEs), which was advanced by one generation, rejected by the next, then revered

under Xi. Instead, these five structural reforms have seen several waves of effort surge forward, only to then be broken up and dissipated by the many inhibitors to structural reform found in the current ecosystem.

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REPORT

MERICS Primer

Is this time different? The structural economic reform challenges for Xi’s 3rd term Analyzing Beijing’s enduring struggle to achieve progress in five key areas Francois Chimits, Jacob Gunter, Gregor Sebastian, Max J. Zenglein November 2022

Click the image to access Slidedeck MERICS Primer – The structural economic reform challenges for Xi’s 3rd term.

Specifically, this MERICS Primer zooms in on the past, present, and future of structural reforms in the following five areas raised, yet again, by Xi Jinping in his 20th party congress report. First, reduce inequality: “The system of income distribution is the foundational system for promoting common prosperity.” Second, strengthen small and medium-sizes enterprises (SMEs): “We will support the development of micro, small, and medium enterprises.” Third, reform the

pension system: “We will improve the unified national management system for basic old-age insurance funds and develop a multitiered and multi-pillar old-age insurance system.” Fourth, promote regional development: “There are still wide gaps in development and income distribution between urban and rural areas and between regions.”

And fifth, liberalize the capital account: “We will promote the internationalization of the CNY in an orderly way.”

Contrary to its self-promoted image, Beijing is struggling to advance meaningful structural reform Public discourse in Europe frequently Since the start of the reform and challenging work of institution building, compares China’s policy-making appara- opening-up period in 1978, China has wealth distribution, and the advancement tus with those of developed liberal market made tremendous strides in its devel- of the Chinese Yuan (CNY) as a truly economies as a contest between 3-D chess opment story. The country’s GDP per global currency will prove deeply chalmasters with a 100-year strategy versus capita reached 12,551 USD in 2021 put- lenging for policymakers. Yet, they have amateur checkers players whose plan- ting it within reach of being classified as spent much of the last several decades ning seldom goes beyond the next elec- a high-income country which the World trying to resolve certain structural probtion cycle. In public debates in Europe or Bank currently sets at 12,695 USD. In the lems with limited results, if any at all. other high-income democracies, China is initial stages of development, picking From regional development disparities often the benchmark against which issues the ‘low-hanging fruit’ was the means and income inequality to pension reform, of shoddy infrastructure or slow decision to achieve growth at all costs. However, SME development, and capital account making – in economic policies ranging growth continues to slow, and China may liberalization, the party state has strugfrom digitalization to embracing emerg- be losing the momentum it needs to keep gled to deliver lasting solutions. Instead, ing technologies – are measured. While pace with the development trajectories macro policies that are rolled out to solve this account holds elements of truth, achieved by its neighbors in Japan, South such challenges are often rebranded, a closer look into the longer-term policy Korea, and Taiwan. dropped or paused after (mostly) lackgoals set by the CCP and the efforts to Shifting from an emphasis on luster outcomes (see the accompanying China’s income growth Japan Korea, and realize them show more nuanced results.lags suchbehind a model towards the South much more slide deck for Taiwan examples).

GDP per capita (PPP adjusted , measured in constant 2011 international USD)

Fig. 1. China’s income growth lags behind Japan South Korea, and Taiwan – GDP per capita (PPP adjusted , measured in constant 2011 international USD)1, 2

Taiwan

45,000

Japan

Republic of Korea

China

40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000

1

0

T

T+5

T+10

T+15

T+20

T+25

T+30

T+35

T+40

T+45

T – introduction of market reforms is measured as 1941 for Japan, 1951 for Taiwan, 1961 for Korea, and 1981 for China

T+50

T+55

Note: – introduction market - isper measured as 1941 for Japan, 1951 for Taiwan, 1961 for Korea and 1981 for China.

ChinaTdata for 2018-2021 of was inferredreforms from GDP capita growth rate from the World Bank China data for 2018-2021 was inferred Sources: Maddison Project Database; EUCCC; from WorldGDP Bankper capita growth rate from the World Bank.

2

50 | BalticMaddison TransportProject Journal | 6/2022 EUCCC, World Bank Source: Database;

T+60

REPORT These efforts stand in stark contrast to the areas in which policymakers have found more success. Beijing has developed a knack for rapid progress in select areas through an ‘industrial policy’ style approach in which considerable capital and manpower are directed to specific issues, leading to timely progress. The success of China’s industrial policy in developing world-leading industries in the New Energy Vehicle (NEV) or photovoltaic cells sectors through such measures has been replicated for resolving social issues under Xi, such as in his signature poverty alleviation campaign that declared itself a success in 2021.

Whether or not President Xi can achieve the kind of progress on key structural issues in the coming years will depend heavily on how his approach compares to previous efforts that stalled. Not only has the General Party Secretary inherited many of these problems, but their growing complexity in a rapidly changing external environment makes them only harder and harder to solve moving forward. Nevertheless, after concentrating power in his own hands for the past decade, Xi has attempted to tackle some long-standing issues in the ‘crackdown on everything’ of 2020 and 2021, which

started with Ant Financial, then moved on to the internet platform economy, real estate, and private tutoring.

It may well be the case that ‘this time it’s different’ as the most powerful paramount leader in decades may be able to summon the political will to cut through vested interests and accept the economic price of reform. In order to analyze such prospects, it is critical to understand previous efforts at unravelling the various Gordian Knots in China’s social and economic landscape and to get to grips with the drivers of previous successes, as well as the inhibitors that held back meaningful reform.

Many structural reforms on China’s economic agenda continue to fail from the outset Advancing key reforms in previous generations took extraordinary resolve to break through vested interests, as well as mass mobilization of capital and manpower, as can be seen in the signature flagship reform priorities of some of China’s leaders.

In the 1990s, Premier Zhu Rongji spent much of his energy on stated-owned enterprise (SOE) reform that sowed the seeds of China’s economic miracle by reforming the Mao-era social safety net – the iron rice bowl – unleashing the private sector and giving it space and capital to grow. Similarly, President Xi Jinping has

been eagle-eyed on anti-corruption efforts since the beginning of his administration.

Despite the fact that it was also a convenient tool to oust political rivals, the stated intent of the campaign has been largely successful, with even the European Union Chamber of Commerce in China reporting considerable progress – 26% of surveyed companies listed corruption as a top three issue in 2014, while only 10% did in 2021.

However, in many other areas, China’s economic agenda continues to face longstanding resistance and complexity that have hamstrung repeated attempts to

achieve key policy goals. Even before Xi Jinping’s rise to power there have been a number of issues on the policymaker radar that Xi has chosen to prioritize.

Ranging from social welfare to financial matters these key areas are undergoing a wave of major policy adjustment, but neither the problems nor the goals are new.

New measures can be re-emerging from the policy graveyard or be part of an agenda where progress has been made at a snail’s pace, all of which offer a stark contrast to the narrative of universally streamlined and efficient policy implementation.

A new round of policies tries (again) to solve long-standing structural problems

Fig. 2. A new round of policies tries (again) to solve long-standing structural problems

Policy objective Historic policy Current policy Xi’s 20th Party Congress Report

1

2

5

Reduce inequality

Strengthen SMEs

Reform the pension system

Promote regional development

Liberalize capital account

Various Policies e.g.

Minimum wage introduction (2004)

SME Promotion Law (2003)

Several measures since 2009, e.g. New Rural Social Pension Schemes

Go West (1999), Rise of Central China (2004)

Qianhai Pilot (2012) / Shanghai Pilot FTZ (2013)

“We will improve the unified national management system for basic old-age insurance funds and develop a multi-tiered and multi-pillar oldage insurance system.”

“There are still wide gaps in development and income distribution between urban and rural areas and between regions.”

“We will promote the internationalization of the CNY in an orderly way.”

Common Prosperity (2021)

Opinions to Promote SMEs (2019)

“The system of income distribution is the foundational system for promoting common prosperity.”

“We will support the development of micro, small, and medium enterprises.”

Source: MERICS Source: MERICS

4

3

14th FYP for Human Resources and Social Security (2021)

Dual Circulation Strategy (2020)

Shanghai FTZ (2019)

Drivers of success: Concentration of resources and political will as well as market developments

Direct action by policymakers has yielded progress in several of these broader policy agendas. For example, decisive efforts from the government bore

fruit in addressing the most depredating aspects of income inequality with the alleviation of extreme poverty. Sizeable state resources were directed to China’s poorest

citizens, and the very structure of the CCP was leveraged to delegate three million cadres directly to households living on less than 4,000 CNY a year to better 6/2022 | Baltic Transport Journal | 51

REPORT manage resource allocation and distribution. The result was an undeniable success in addressing absolute poverty.

However, there are limitations to how this could be replicated at the next level of income, as it would demand higher incomes for a much larger pool of citizens.

In this sense, much of China’s direct policy approach to solving these issues remains comparable to its application of industrial policy – allocating resources to addressing a targeted and specific shortcoming.

Market developments that have little to do with government measures – and are rather thanks to the government extricating itself, such as in the Shenzhen Special Economic Zone that turned a fishing village into one of China’s most important cities – have also contributed to progress in the structural reform agenda. Relative regional disparity remains high between China’s rich coast and its less developed interior. However, in absolute terms, as coastal wages have risen, China’s core provinces have benefitted from a slow shift in lower-end production moving

Despite two decades of effort, consumption lags in inland provinces

Fig.Annual 3. Despite consumption two decades of effort, consumption lagsper in inland provinces – annual consumption expenditure capita in CNY (2021) expenditure per capita in CNY (2021)

<20,000

20,000-25,000

25,000-30,000

30,000-40,000

>40,000

Source: CEIC

inland, as well as growing investments from Chinese and foreign companies aiming to tap the growing consumer market of China’s interior.

Similarly, financing access to SMEs has benefitted from the burgeoning venture

capital and startup culture developed in the market, and from the fintech industry, though it is notable that these very market sectors and tools have been subjected to intense crackdown on fintech and emerging types of fundraising in recent years.

Inhibitors of success: Stability above all, vested interests, and policy schizophrenia In other areas, prioritizing stability Beijing’s perennial emphasis on stability as the base line of its economic poli- makes it impossible to untangle probcymaking imposes limits on the kind of lems which arise from the intersection major reforms that are necessary to achieve of various challenges. For example, progress on bigger picture issues. In some income inequality is far higher due to cases, this takes the form of a clear unwill- the nature of China’s pension systems ingness to let market forces play out, such and the household registration (hukou) as the steadfast refusal to liberalize China’s system. These restrict migrant workers’ capital outflows on the grounds of main- access to the social security and welfare taining the stability of the CNY. As such, systems in the cities in which they live efforts to advance meaningful internation- and force migrants back to their origialization of China’s currency regime with- nal locales as they reach retirement age, out capital account liberalization generates which also cements regional and indiRural-urban income aggravated in retirement income disparity.

In such cases, little more than token results.inequality isvidual

one problem cannot be solved without also solving several others at the same time, which could be destabilizing as it risks unwanted side effects, hence the policy gridlock in the name of stability.

The policy agenda is also stagnant in these areas due to political limitations and a wide range of vested interests in the party-state system. The CCP is far from a homogenous block and includes different political factions from liberal reformists to more hardline Marxists.

While factionalism is likely at its lowest point in decades under Xi’s consolidation Annual pension income in CNY of power, elements of it persist for now Fig. 4. Rural-urban income inequality is aggravated in retirement – annual pension income in CNY and any structural reforms will need to balance between interests of the differUrban Pension Rural Pension ent factions.

The vested interests of various factions 50,000 CNY 43,000 frequently prove to be stumbling blocks.

SOEs maintain tremendous amounts of 40,000 influence over policy, and repeatedly push back on market reforms and changes to financial markets that are necessary to create 30,000 a stronger foundation for SMEs to thrive CNY 16,700 in. Similarly, regional disparity alleviation 20,000 efforts are often hamstrung by the officials and affluent middle class in the country’s 10,000 CNY 2,300 developed coastal provinces. This has been CNY 700 seen from resistance to transfer payments 0 to opposition to plans that would require 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 more spots at top universities be reserved for students from poorer provinces.

Source: CEIC 52 | Baltic Transport Journal | 6/2022

REPORT Another key inhibitor is the mix of policy making and implementation approaches in China. While a strength for achieving quick gains, Beijing’s campaign style approach to policy implementation produces a f lurry of activity from officials that dissipates over time. This style, in contrast to institution building, seriously restrains the long-term effort demanded by structural challenges.

One example is in the final months of 2018 when the “battle for blue skies” campaign led zealous officials in Northern

China to replace coal heaters with gas ones. This was rushed, and in a demonstration of political zeal, coal heaters were prematurely destroyed even though gas lines and supplies were not yet established. The ensuing winter cold left millions freezing, and once infrastructure was in place, supplies ran short, leading to shortages in industrial centers as far south as the natural gas-rich Sichuan Basin.

Finally, the large host of potential crises facing the CCP at any given moment leads to a kind of policy schizophrenia that inhibits

their ability to achieve progress in longterm issues. For example, the 2021 Central Economic Work Conference emphasized stability as the key goal in 2022, but otherwise had a laundry list of every possible economic matter spread over seven broad categories, leaving officials with no clear understanding of where they should put their focus – they know where the problems lie, but do not know which to tackle first. In effect, when officials are expected to achieve progress everywhere, they often end up advancing change nowhere.

The CCP seems to be strengthening its commitment to an authoritarian approach under Xi With a more powerful Xi Jinping in place the CCP seems to be strengthening its commitment to an authoritarian approach in pushing through policy objectives. The forceful approach will likely be better positioned to break down certain vested interests or political resistance within the party than in the past, perhaps allowing for larger reforms to take shape.

Yet, even when already wielding the power that the core leadership has consolidated over the last decade, a hesitant approach has been

adopted towards issues touching on the most widely held of vested interests, such as property owners. Property taxes have been discussed in policymaking circles in the past, but they never went anywhere. Now, Xi’s introduction of property tax pilots as part of the real estate sector shake-up in 2021 are a reminder that despite Xi’s position being strong enough to actually introduce these measures, the cautiousness with which it is being advanced suggests a balancing act not to alienate too many people at once.

The command-and-control approach will leave less room for regional policy experimentation, a hallmark of China’s reform progress in the past. With greater centralization of power and a more ideologically driven political culture, lowerlevel policy makers will not be willing to stick their necks out and will instead follow what few direct orders they receive, and otherwise do their best to interpret Xi Jinping Thought as gospel for their decision-making.

Corridors of economic activity will become more constrained This also means that the corridors of economic activity – what private actors can and can’t, or ‘should’ and ‘should not’ do – will become more constrained.

There is a shift away from officials adopting pragmatic approaches to solving problems and towards an attitude that

favors ‘engineered’ solutions over naturally evolving ones, and even aligning with what is ideologically ‘correct’ rather than what is best from a market perspective. For example, prior to the regulatory crackdown on the fintech sector, China’s private IT companies helped fill a void

in China’s state dominated financial system helping to improve among other things access to credit for SMEs. Such solutions would likely be smothered in their infancy by corporate executives that must navigate the complexity of politically appropriate behavior.

Conclusions China’s political and economic system might very well deliver on some key policy challenges. But this approach is still prone to delivering mixed results. It seems most suitable for breaking vested interests (i.e, SOE reform under Zhu Rongji and regional disparity now) but less so in building underlying institutions (i.e., tackling inequality or strengthening SMEs). Instead, Xi has often relied on ad hoc applications of the CCP as an extralegal force that addresses challenges through short-lived campaigns, which may be suitable for eradicating absolute poverty, but will be insufficient to addressing income disparity in a comprehensive and nationwide way. With a greater emphasis on

nationalism and ideology under Xi, there is also an inherent risk of policy makers chasing after propaganda targets at the expense of the long-term structural reform agenda.

However, the success or failure of Xi to meaningfully advance structural reform may be determined less by the drivers and inhibitors of success that affected the efforts of previous generations of leadership and more by challenges unique to Xi’s third term. The 2022 economic downturn stemming from Xi’s prioritization of China’s zero-COVID strategy as well as weak real estate markets resulting from his crackdown on the sector will leave him with fewer resources and less flexibility for bigger reforms – Zhu Rongji

had an easier time with SOE reform with a booming, double-digit-growth economy.

Furthermore, Xi will almost certainly continue investing resources into China’s technological self-reliance campaign to mitigate the external risk of the US and allies making more dramatic cuts to China’s access to foreign technology. These internal and external challenges may take up all of Xi’s bandwidth, and much of the limited resources that China has to spare as it tries to keep the economy propped up. In that sense, Xi may end up unable to meaningfully advance these structural reforms in the coming years, even if he might otherwise have the right mix of positive factors on his side.

The Mercator Institute for China Studies (MERICS) was founded in 2013 by Stiftung Mercator to strengthen knowledge and debate about China in Germany and Europe. With about 20 full-time international researchers, from Europe, the US, Australia and Singapore, MERICS is currently the largest European research institute focusing solely on the analysis of contemporary China and its relations with Europe and the wider world. Head to merics.org to learn more.

6/2022 | Baltic Transport Journal | 53

The Baltic Ports for Climate

by Andrzej Urbaś, Communication Manager, BPO The Baltic Ports Organization (BPO) presented the concept for its new project – Baltic Ports for Climate – during this year’s Greenport Congress & Cruise Conference, held on 18-19 October 2022 in Bruges and focused on green solutions for sustainable ports in the next decade.

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he project is an answer to legislation being part of two proposals included in the recently introduced Fit for 55 package, i.e., FuelEU Maritime and Alternative Fuels Infrastructure. The former requires vessels to use shore-side electricity or zero-emission technology while at berth (per the jurisdiction of a given EU Member State).

The direct obligation to deploy shoreside electricity supply (onshore power supply, OPS) infrastructure in ports is governed by the draft regulation on the development of Alternative Fuels Infrastructure, which replaces the directive currently in force.

According to the proposed regulation, OPS installations should be provided for container and passenger ships by 2030.

Due to the high costs associated with these investments, careful analysis and planning are paramount to avoid the risk of creating stranded assets.

54 | Baltic Transport Journal | 6/2022

The project’s main idea is to expand the OPS network across the Baltic Sea region.

The initiative will be divided into four modules: OPS planning in ports; innovative solutions (e.g., energy generation in ports); stakeholder platform; project management & dissemination.

Careful planning is vital when it comes to long-term, costly investments. Due to ports’ unique characteristics, it is essential to prioritise projects in locations that make the most sense, both from environmental and business standpoints. In-depth, expert studies will help to ensure maximum emission reduction and lessen the risk of wasted funding.

Bogdan Ołdakowski, BPO’s SecretaryGeneral, commented, “This project initiative is a perfect example of regional approach and cooperation between ports when responding to climate-related challenges. We have received a number of positive responses from the Baltic ports. By working together, ports may not only optimise their resource

deployment but also learn from each other and from other stakeholders, such as shipping lines or technology providers.”

Tapping into an existing experience pool will be incredibly beneficial during the planning period. The number of OPS installations in Baltic ports has tripled over the past few years, approaching 27 in 2022. A great deal of knowledge and experience is already there and will help create standards and procedures that benefit the successful implementation of the planned activities. The stakeholder platform will include port authorities, terminals, shipping lines, bunkering companies, energy providers, and others.

The project aims to deliver the application to the Connecting Europe Facility’s newest Call for Proposals at the end of Q3 2022 and receive co-financing. Close cooperation with energy and technology partners will ensure the longevity and quality of proposed solutions.

A new scene for Baltic ports

by Andrzej Urbaś, Communication Manager, BPO During the last Baltic Ports Conference, held in Gdynia on 7-8 September 2022, we launched a new report: Baltic Sea region – a new scene for Baltic ports. Several months have passed since Russia’s aggression against Ukraine. The war primarily means the suffering of the Ukrainian society, bringing mass destruction also to civil transport infrastructure. It additionally blocks seaports and vastly limits trade opportunities.

Photo: Canva

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he West had introduced sanctions against Russia and Belarus, limiting the trade of selected commodities and services. Consequently, Russia introduced counter-sanctions and started cutting gas supplies to Europe.

European countries, including the Baltic ones, found themselves in a new energy situation, which is forcing them to look for

new fuel supply directions. Some decided to implement projects to increase their energy security, e.g., setting up LNG import terminals. In the area of security, Sweden and Finland have decided to join NATO. At the same time, NATO is increasing its presence on the so-called eastern flank.

In the presented report, we want to outline this new complex scene that mixes

many economic and political factors. The Baltic ports function on such a complicated and volatile stage. We hope that reading the report will allow for a better understanding of the situation in the Baltic Sea region. We invited experts and analysts from Interlegal, the Center for Eastern Studies, the University of Gdańsk, and Actia Forum to carry out the report.

BALTIC PORTS ORGANIZATION • Secretariat Office – Actia Forum Ltd. ul. Pułaskiego 8, 81-368 Gdynia, POLAND, ph.: +48 58 627 24 67, fax: +48 58 627 24 27, e-mail: bpo.office@actiaforum.pl, bpo.sg@actiaforum.pl, www.bpoports.com 6/2022 | Baltic Transport Journal | 55

Meeting shipping’s exponential demand for data bandwidth

Digitalisation relies on connectivity

by Ben Palmer, President of Inmarsat’s Maritime Division The shipping industry’s demand for communications bandwidth is growing exponentially. In a fastevolving maritime regulatory landscape, shipowners are increasingly implementing data-driven processes and adopting digital shipboard solutions to, among others, cut emissions and achieve environmental compliance. Pending revolutionary developments in propulsion and fuel technology, this approach is delivering immediate, measurable, and meaningful benefits: Ricardo Energy and Environment, a global environmental consultancy, predicts a 38% reduction in maritime greenhouse gas emissions by 2050 through digitalisation alone, a significant contribution towards the 50% reduction target set by the International Maritime Organization.

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hile digital transformation will be crucial to decarbonising the shipping industry, digitalisation itself relies on connectivity. With shipboard processes and technology becoming more sophisticated and prevalent, data usage is skyrocketing.

A study undertaken by Inmarsat reveals that data usage is on the rise among all commercial vessel types. In 2022, total network usage in the maritime sector will be 45% higher than last year. Year-on-year data usage was highest among container shipping companies, more than doubling (+108%) in June 2022 vs June 2021, while connectivity use increased by 70% among oil tanker operators and by 47% on bulk carriers over the same period.

Maritime data usage is a leading indicator of economic activity and of the international trade being carried by the shipping industry, which accounts for 90% of global volumes. More and more shipping companies are upgrading their satellite communication services to maximise fuel efficiency by adopting new technologies, including route planning and ship-to-shore 56 | Baltic Transport Journal | 6/2022

broadband data transfers. They are also ensuring that their crews remain connected with family and friends while at sea, the mandatory requirement now recognised by the Maritime Labour Convention.

Eco-performance & crew wellbeing Shipowners are rightly looking to reduce their environmental footprint in line with the tightening regulations. To do so, they require insight into the efficiency of multiple shipboard systems and the ability to gauge the impact of external factors on machinery and overall vessel performance.

This means collecting, storing and analysing significant volumes of information and then transferring these data sets to various stakeholders – a series of processes that relies on stable network connections and ample bandwidth. The advanced digital solutions that allow owners to act on insights from data analysis and minimise emissions also depend on connectivity.

Like performance monitoring, the cloudbased tools that support greater ship sustainability demand high network stability and considerable bandwidth.

Maritime connectivity also enables an array of data-intensive processes, the benefits of which go beyond supporting environmental compliance. In addition to running applications to enhance performance in other areas of vessel operations, such as safety or onboard productivity, shipowners are increasingly implementing video conferencing as well as remote inspections and maintenance to reduce costs and downtime. As a result, the monthly average of the total maritime network usage for business operations has increased by over 30% in the past 12 months.

However, the single greatest factor behind the exponential increase in data usage at sea is a growing appreciation for the importance of crew welfare. Since the onset of the COVID-19 pandemic, several high-profile incidents have drawn attention to the difficulties facing seafarers, with the infamous crew-change crisis depriving shipboard personnel of timely shore leave and repatriation. Many owners and managers have responded to this situation by investing in better connectivity for crew and offering access to digital services such

TECHNOLOGY

Photo: Inmarsat

as 24-hour helplines. This trend has contributed to a 50% increase in total crew network use in the last year.

Backed by an orchestra In a maritime industry where requirements are constantly evolving, and data usage is rising fast, existing connectivity services are being pushed to their limits.

Inmarsat has invested considerable time and resources into developing a new generation of connectivity solutions and a step-change in the capacity available over its networks, with a further seven Global Xpress satellites entering service by 2025.

For example, Fleet Xpress Enhanced – the latest evolution of our transformational connectivity service – offers a versatile, integrated and modular solution powered by the world’s most advanced satellite network: the Inmarsat Global Xpress Ka-band network. The solution enables real improvements in operational efficiency, sustainability and crew welfare, allowing owners to upgrade their bandwidth allowance and adopt new applications as their needs change. The new-and-improved offering provides Inmarsat partners with a platform to deliver their value-added services and host applications, with shipping companies, in turn, gaining access to an array of functionality ranging from email

and basic office tools to the latest solutions powered by the Internet of Things.

Fleet Xpress Enhanced enables a flexible, step-by-step approach to digital transformation. As such, it supports long-term efforts towards decarbonisation and crew welfare improvement. Crucially, the solution is future-proofed for seamless integration with other communications networks; specifically, Inmarsat’s planned multi-dimensional network ORCHESTRA. This approach promises to redefine connectivity at scale with the highest capacity for mobility worldwide and at hot spots around the globe.

ORCHESTRA – so named because it brings together multiple components in perfect harmony to produce something far greater than the sum of its parts – is designed to meet the accelerating bandwidth requirements of modern shipping. It combines our geosynchronous – or GEO – networks, ELERA and Global Xpress, with terrestrial 5G and targeted low-Earth orbit

– or LEO – satellites. The result is a single, advanced solution for global mobility that will offer the fastest average speeds and the lowest average latency of any network – either planned or in existence – with seamless global connectivity.

Vessels driven by data When shipowners’ requirements are evolving rapidly, and maritime data use is skyrocketing, we aim to give shipping companies a clear and flexible path to digital transformation – whatever stage of their journey they have reached.

Wherever the data-driven vessels sail – whether in an isolated stretch of water or a bustling shipping hub – they can rely on high-speed connectivity to facilitate safe, efficient, and sustainable operations.

The only limit to their potential is the creativity of the technology solution and applications for which Inmarsat will offer continuous, global access.

Powering connectivity at sea for more than 40 years, Inmarsat’s Fleet Xpress portfolio harnesses the full power of a connected maritime ecosystem and offers more flexibility to tailor data usage to individual customers’ needs. Fleet Xpress helps shipping companies increase transparency around the data consumed and gives greater control over data usage. As a result, the portfolio ensures future-proofing of business operations through high-quality connectivity, enabling digitalization, decarbonisation and crew welfare. Check Inmarsat Fleet Xpress to learn more.

6/2022 | Baltic Transport Journal | 57

How the new regulatory landscape and data-gathering technology will foster greater owner-charterer collaboration

Charterers embarking the data ship

by Nikolay Georgiev Nihrizov, Head of Weather Advisory Services, ZeroNorth The EU’s Emissions Trading System will likely result in shipping companies directly passing the costs on to charterers. Meeting the requirements of the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) won’t be simple because a vessel’s ongoing emissions performance will depend on operational factors such as how fast it sails, external factors like weather and tide conditions, as well as its technical capabilities for reducing the footprint.

A

relatively low-cost and initially popular option for ship operators aiming to improve CII ratings is to introduce engine power limitation systems and slow steam their vessels on favourable routes. CII requirements will tighten over time, so this is a short-term solution only; yet, it could still have significant and immediate consequences for the commercial interests of charterers and the negotiation of charterparty agreements.

Due to the upcoming IMO and EU regulations, shipowners and charterers will certainly face new commercial challenges. They will need to find a way to meet targets and stay compliant without the bottom line suffering.

Tech that drives the green agenda Ship operators have already started collecting the data in preparation for what the IMO will require to calculate CII ratings.

Some operators are now using those data to accelerate their decarbonisation efforts.

Take, for example, Unifeeder, having the 58 | Baltic Transport Journal | 6/2022

largest container feeder and short sea network in Europe (including 48 ships of its Baltic fleet as of September 2022, totting up to over 628k dwt). The carrier is harnessing digital technology from ZeroNorth to provide its fleet managers with full transparency over voyage planning, optimising the journeys through integrated weather routing, as well as bunker, vessel and emissions optimisation recommendations that help them unlock fuel efficiencies, reduce carbon emissions, monitor CII ratings, and improve earnings.

Adopting digital technologies that enable organisations to advance their green agenda is critical in reducing local and global emissions. The transparency gained through data-driven insights empowers individuals and teams to recognise and act on untapped potential efficiencies. In fact, ZeroNorth believes there could still be around 10% of latent performance improvements ready to be unlocked through more optimal voyages, likewise improved vessels and bunker utilisation. This will further lower fuel

consumption, becoming even more critical with the transition to green fuels, which will likely see fuel bills multiply many times over the coming decades.

‘Fair-weather’ assumptions Charterers can continue, as they have always done, to rely on fuel consumption tables when deciding which vessels to charter. Alternatively, they, too, can take advantage of today’s more mature data landscape to accurately predict vessel performance.

The fuel consumption estimates historically used for making pre-chartering decisions are often based on limited operational data, such as selected speeds and good weather, rather than the dynamic range of situations faced at sea. This creates a challenge for charterers wanting to identify the best-suited vessel for a particular journey.

Shipowners may introduce energy efficiency improvements. That said, without actual performance data to prove the effectiveness of such initiatives in reducing fuel costs, charterers are still left making

TECHNOLOGY

Photo: Unifeeder

‘fair-weather’ assumptions based on limited operational experience and equipment manufacturer claims.

The technology already exists to support more accurate and dynamic fuel consumption predictions via modelling the complex conditions that vessels face while at sea. Sophisticated algorithms and machine learning can process millions of data points (including weather, ship characteristics, and operational and historical performance) to accurately predict how much fuel will be needed for a given voyage if a particular vessel is to be selected. This equips charterers with the data they need to make smarter, more informed pre-chartering decisions and select the most suitable ship for the specific route and conditions.

For the first time, the same data set can inform pre-chartering and operational decisions, thus enabling a more holistic approach to decarbonising global trade.

Trust in data integrity An often-overlooked benefit of digitalisation is that it enables individual development, intra-team accountability, and wider collaboration with other stakeholders.

However, this does require trust in the integrity of the data being captured and used to generate predictions and recommendations.

For example, noon reports have historically been time-consuming for crews, and it is widely accepted that data quality

improvements are needed. Having a shared data standard would generate time efficiencies across the supply chain, cutting down the requirement for crews to deliver multiple reports to different stakeholders.

Earlier this year, the industry working group Impact Today – consisting of 14 organisations, including ZeroNorth, EuroNav, FedNav, Q88, Ultrabulk, Teekay Tankers, and Siglar Carbon – created a new standard for noon reporting to improve data quality, decarbonisation efforts, and match data gathering with the industry’s optimisation needs.

Impact Today has also called for creating a methodology for assessing fuel performance model accuracy. These models, like the data fed into them, are vital to ensuring that optimisation decisions are based on the actual conditions a vessel faces while sailing.

Data quality is a critical factor in underpinning voyage, vessel, bunker and emissions optimisations for vessels in the global fleet. To ensure reliable, useful output from any digital platform, it is critical that the data inputted across the supply chain is highquality, standardised, and interoperable.

Evolving digital technologies will enable the industry to unlock even better voyage and vessel optimisation outcomes, paving the way for broader collaboration and greater transparency as lenders also evaluate performance and CII ratings before offering ship-related finance.

Looking beyond CO2 emissions – positively In the longer-term, digitalisation builds a framework for meeting new challenges.

Some of the EU’s regulations for the decarbonisation of shipping are yet to be finalised, but the need for extending beyond carbon dioxide emissions to methane and nitrous oxides has already been voiced. The IMO is under similar pressure, particularly as the shipping industry evaluates the true well-towake emissions of new fuels such as methanol, ammonia, and hydrogen.

Digital solutions provide the shipping industry with a positive vision of the future and the ability to take immediate action to reduce emissions and improve performance today rather than some vague, unknown time in the future.

Born from Maersk Tankers, ZeroNorth was founded to change the shipping industry through digitalisation. Working alongside our customers and partners, we truly believe that we can support shipping companies worldwide to optimise their business while reducing shipping climate footprint. This is what empowers us, a team made up of some of the most creative and strategic minds in shipping, with over 90 years of experience in the industry. Set a course for zeronorth.com to discover more.

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Solving shipping’s AI dilemmas

New thinking enters an age-old field

by Antonis Nikitakis, AI Director, DeepSea Technologies Handling distributional shift is one of the greatest obstacles to the widespread adoption – and impact – of artificial intelligence (AI) across all industries. This is especially the case in shipping, and now the world’s top experts, including our company, are collaborating to explore solutions to this issue, likewise debunking some of the common misconceptions that cause apprehension in the industry.

W

e have focused on managing distributional shift since DeepSea’s inception.

It is a critical prerequisite to using the technology to generate real impact for companies now and in the future. Understanding the full picture of how data generated by a ship shifts over time is crucial to accurately model vessels, which is key to unlocking shipping’s huge decarbonisation potential and minimising fuel waste A great example of a distributional shift is found in maritime – where the entire ship data set moves over time due to hull fouling. Fouling can have a significant impact on operations that can, in turn, lead to major inefficiencies. Moving forward, vessel data can be used to calculate how to counter this issue, amongst others.

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Excessive and overhyped?

DeepSea’s team has partnered with other industry-leading institutions and researchers in the field of AI, culminating in the launch of the Shifts Project, an international collaboration of academic and industrial researchers dedicated to studying – and solving – problems associated with distributional shift. Ultimately, the initiative aims to maximise the realworld impact of AI technology.

Maritime has been chosen as one of two global case study challenges (the other being distributional shift concerning the treatment of the chronic condition of multiple sclerosis). Alongside DeepSea, the Shifts Project is an international effort involving numerous institutions, including the universities of Cambridge, Basel, Lausanne, and HES-SO Valais. The initiative focuses

on building a cross-disciplinary & international community, bringing together core machine learning (ML) researchers studying distributional shift and applied ML researchers who work on tasks affected by distributional shift in the real world.

Parts of the shipping industry remain sceptical about the technology amid accusations of AI being excessive and overhyped – a view held most prevalently by the more traditionalist and conservative players. It is thus crucial that maritime digital tech experts work to debunk false assumptions, addressing criticism in a fair, honest, and responsible way.

Historically, shipping’s decarbonisation progress has also been hampered by the split incentive issue, which stems from antiquated charter party agreements prioritising quick arrival above all else.

TECHNOLOGY

Photo: Canva

Despite the availability of cost and performance efficiency gains offered by the likes of, among others, AI-based solutions, this dynamic divides responsibility for fuel costs between shipowners, operators, and charterers. What results is the lack of a clear value proposition to invest in ecoefficiency technologies.

The reality of ship-at-sea data To cement AI’s role as a major ally for shipping companies in their decarbonisation-cost-fuel efficiency efforts, credible researchers working to popularise AI adoption in maritime must pursue rigorous methods of proving the real value of what they’re creating.

One way of doing this is to develop robust models, which will be essential in enabling the effective deployment of AI-based technology, and, in turn, reduce the carbon footprint of global supply chains. This will also act as a stamp of approval for all companies working with AI in the shipping industry.

The sector also needs a benchmark for evaluating AI competence within a vessel model to help assuage wider scepticism.

Real-life, tangible examples of AI ‘working’ at sea are the most direct way of verifying the efficacy of the technology.

As it stands, most model accuracy figures reported in publications and marketing materials fail to bear relation to

the actual usage of those models in the real world. The reality of ship-at-sea data is highly variable, and models must capture a much greater degree of complexity than the commonly-seen metrics indicate.

None can compete Notwithstanding the above, tangible progress is being made. Earlier this year, DeepSea announced a partnership with the ro-ro & vehicle logistics heavyweight Wallenius Wilhelmsen. The company will adopt a fully AI-based approach to voyage optimisation across its 120+ fleet. The collaboration resulted from 18 months of stepby-step testing, delivering figures such as a 6.9% improvement in vessel efficiency and more than 170kt predicted reduction in emissions across the fleet.

This represents a watershed moment for shipping’s digitalisation, marking a key milestone in the mass uptake of AI and its practical application via voyage optimisation as a crucial enabler of operational efficiencies. Or as Geir Fagerheim,

Wallenius Wilhelmsen’s SVP of Marine Operations, puts it, “No human being, no matter how many years of experience they have, can compete with these automated sailing instructions. It reduces emissions, it reduces fuel consumption, and it increases safety during operation. It is a win-win in all aspects of sailing.”

A huge responsibility As incoming regulations aim to lower shipping’s environmental impact, ensuring that all opportunities for emissions reduction and decarbonisation are being explored and utilised will be crucial to commercial success.

The digital tech sector has, therefore, a huge responsibility. It must do all it can to support an honest and transparent approach to AI to help the wider shipping community realise the power of an AI-based approach and alleviate its limitations. Only in this way will AI experts be able to make an increasing impact on shippers’ bottom lines and the planet’s sustainable future.

DeepSea Technologies is a maritime tech company specialising in vessel performance monitoring and optimisation. We combine many years of experience in the shipping industry with deep expertise in software, hardware, and artificial intelligence. DeepSea has built a pioneering next-gen performance routing tool, Pythia, which offers shipowners an average of 8% savings in emissions and fuel consumption. The company is also part of the 10% initiative.

Go to www.deepsea.ai to learn more.

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HERITAGE CORNER

Celebrating the 190th birthday of the 190 km long canal

by Przemysław Myszka At the beginning of the 16th century, Hans Brask, the bishop of Linköping, put forward the idea of bypassing the Sound Dues, a toll on the use of the Øresund, by directly connecting the Baltic and North seas with a canal running through Sweden. The concept had to wait over three centuries to become a reality, taken up by count Baltzar von Platen (who sadly didn’t witness the completion of the entirety of his opus magnum). Although in 2000 it was chosen as the Swedish Construction of the Millennium, the Göta Canal never fulfilled Brask and von Platen’s intentions. It, however, yielded other fruits, most notably in developing the country’s industry and tourism.

Photos: Wikimedia Commons

I

n 1806, born on the island of Rügen von Platen, a naval officer and governmental minister in Sweden produced a treatise on canals.

King Charles XIII was favourable to digging a Baltic-North Sea canal, seeing it as an opportunity to level up the country through industrial development. On 11 April 1810, his royal highness gave the go-ahead for von Platen’s company set up for building the canal to start the construction works, granting labour, land, and forests for the project. Von Platen was more than eager to oblige since he, with the invaluable help of Thomas Telford (designer of the Caledonian Canal in Scotland), had already charted the canal lay-up in 1808.

The first spade hit the ground in May 1810, with the excavation works beginning in Motala. Over the next 22 years, some 60 thousand men (mostly soldiers, but the group also comprised some 200 Russian deserters) worked for seven million man-days (each counting 12 hours), digging 87.3 kilometres, blasting away 200 thousand cubic metres of rock, and carting eight million cubic metres of soil. Because Sweden was completely unsavvy in such infrastructural projects, foremen were imported from Great Britain, along with a dredger, levelling instruments, and even the most rudimentary equipment like pickaxes, iron-shod wooden spades and wheelbarrows. To ward off cold creeping into the workers’ hands and feet, every weekly ration included 14 measures of schnapps (‘merry’ workers are still part of the lay of the construction land well into the 21st century, to the detriment of occupational safety and health, sadly; conversely, the canal’s troops were more than disciplined). Von Platen understood that domestic manufacturing and know-how would be pivotal in completing the Göta Canal. Therefore, he founded the Motala Verkstad (nowadays considered the cradle of Swedish industry, especially iron casting, even those parts that turned out to be the nail in the canal’s coffin).

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The Opening of Göta Canal at Mem by Johan Christian Berger; photo: Wikimedia Commons

The western section was inaugurated in 1822, for which von Platen was honoured with the Order of the Seraphim by Charles XIV John. Ten years later, and three after the count’s passing (while governing Norway), the whole canal was commissioned during a grand ceremony involving the royal family. All soldiers that partook in its construction were presented with a silver medal. The 190 km long, 7-14 metres wide, and three metres deep Göta Canal stretches from Mem on the east coast to Sjötorp on Lake Vänern.

The infrastructure totals 58 locks (today hydraulic, apart from two all automated). It also comprises a system of side ditches and stone-lined culverts beneath the canal (some of them the height of a man) that carry the water to other channels. There are also regulating gates, serving two purposes. In an unfortunate collapse event, such as the high bank burst at Venneberga in 1847, the gates automatically close in response to water suction so that only a short stretch is emptied. Second, it facilitates spot emptying for repairs.

Through lakes and rivers, the Göta Canal reaches Gothenburg. Yet, André Oscar Wallenberg’s Company for Swedish Canal Steamboat Transit Traffic carried out only two shipments in 1851 from England (Hull) to Russia (St. Petersburg) over the canal before the Crimean War halted trade between the two nations. Shortly afterwards, the Copenhagen Convention of 1857 abolished the Sound Dues, turning all Danish straits into international waterways free to all commercial shipping. Two years earlier, the innovation of railways started making its way to Sweden. Trains were faster and enabled year-round passenger and freight transport, unlike the Göta Canal, which was shut close for about five months a year. Specific nontime-sensitive trades, such as forest products, coal and iron ore, continued to use the canal, but even those perished after the 1870s.

HERITAGE CORNER

Photos: Göta kanal

The Motala Verkstad quickly shifted its focus (in 1878) to producing locomotives and rolling stock (200 years old, it is still up & running as part of the MVG Motala Verkstad Group).

Though the Göta Canal didn’t revolutionise Baltic Sea shipping, it wasn’t an utter bust – at least from today’s perspective. Each year, around two million people visit it as a tourist destination as well as use it for recreational purposes. Somewhat ironically, the canal got nicknamed “divorce ditch” for the trouble it causes to amateur couples that try to navigate through its narrownesses and locks.

Count Baltzar von Platen oversees the traffic from his resting place near the canal in Motala.

Interestingly, it is believed that the Göta Canal gave birth to another significant Swedish infrastructure. Following the loss of Finland in 1809, the Karlsborg Fortress was erected (1820-1909) to better protect Stockholm, as the capital now found itself lying directly on the eastern flank. It was designed as a point of egress and was supposed to shelter the royal family, the government, and the treasury – transported via the Göta Canal – should a war break out. It never did, apart from storing Sweden’s gold reserve during WWII. Whereas the Karlsborg Fortress nowadays still houses military units, its grounds also host numerous civilian establishments, making it another destination for tourists. Maybe botched modern container terminal investments will similarly find their second life?

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TRANSPORT MISCELLANY

Elemental ageing Our Chief Editor has been lately earning his spurs in all things whisk(e)y.

What is unique about this spirit is that it has to age in barrels for an excessive amount of time to get its name. There are all sorts of barrels and warehousing types (representing anything from loving artisan to vulturine corporate practices), all of which profoundly impact the end result. Bearface, a Canadian whisky brand, has harnessed the elements

themselves to age their make. Yet, it wouldn’t be possible without a shipping container. The company has repurposed the good-ol’ box by getting it outside in the Canadian wilderness and placing barrels with whisky inside. Out there in the Bear Country, the rapidly changing weather – from minus ten centigrade to plus 40 within one day under steel – plays its part in how wood and spirit interact. Cheers!

Photos: Bearface

Three bridges – three eras A vintage postcard with three bridges from the Swedish village Håverud symbolically depicts the chronology, likewise, the hierarchy of modern transportation. The infrastructure situated the lowest is an iron aqueduct on the Dalsland Canal built in 1868. In the middle, there’s a railbus on a steel railway bridge from 1925. Topmost, we have a road bridge made from reinforced concrete and finished in 1937. Modern technologies were coming

to remote corners of Sweden delayed. Then again, the periods between their arrivals were shorter. Anyhow, the bridge elevations show & tell the importance of each mode. Take Germany as an example: some 85% of cargo traffic goes by road, 10% by rail, and the remaining part by inland waterways.

The picture of a ship crossing the aqueduct from the rail bridge could very well be queening it over: “Oh, those wheel-less, soggy, poor buggers.”

Photos: Konstantin Andersson/Järnvägsmuseet

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TRANSPORT MISCELLANY

Another joins (leaves?) the Forgotten Fleet Marine archaeologists from the Museum of Wreck found Äpplet (“The Apple;” click here to watch the footage in Swedish), the 1629-launched one metre-wider sister ship of Vasa (the ‘fudge’ warship that sunk after sailing 1.3 km on her maiden voyage on 10 August 1628…).

In December 2021, another shipwreck was discovered near Vaxholm, an island outside the Swedish capital (in 2019, Apollo and Maria from 1648 were found there). Parts of the ship’s sides had fallen to the bottom of the sea, but the hull was otherwise preserved up to a lower gun deck (the dipped sides had portholes on two different levels, evidence of a warship with two-gun decks). Spring of 2022 saw a more thorough survey: “The dimensions, construction details, wood samples and archival material all pointed in the same direction – amazingly, we had found Vasa’s sister ship Äpplet,” the Museum’s Patrik Höglund said. Convincingly, the same Mälardalen oak from 1627 was used to build the two (the other sister ships were composed of different timber). The discovery was made within the Stockholm University’s Center for Maritime Studies-led The Forgotten Fleet research programme. As for Äpplet, she (along with other contemporary Swedish ships) ultimately found other employment, though still (sort of) naval: as underwater spike strips.

Photo: Alexander Rauscher/Museum of Wrecks

Photos: Jim Hansson/Museum of Wrecks

The first-born left behind?

Shipowners gave birth to Norway’s modern air transport industry. Between 1933 and 1935, Fred. Olsen, Det Bergenske, and five other shipping companies formed Det Norske Luftfartselskap, Fred. Olsen & Bergenske A/S (DNL in short; a dot, a comma, and an ampersand in a company’s name, some creative piecework there!), one of SAS founders after WWII. The company’s history brings to the fore the first three-engine passenger seaplanes of the Junkers Ju-52 model, chartered in 1936. Still, DNL launched

Photos: Norsk Luftfartsmuseum

a postal service one year earlier, employing on the Oslo-GothenburgCopenhagen route the one-engine Junkers W 34hi named Ternen. Later, the seaplane plied across the domestic line Bergen-Sogn. According to Rob J. M. Mulder’s book about this particular aircraft (which explicitly reads “DNL’s First Airliner”!), it also flew during the last summer before WWII in northern Sweden on aerial photography. It was also used for ambulance sorties, instrument flying courses and training, and joy flights.

Photo: Norsk Teknisk Museum

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WHO IS WHO PATRIK BENRICK Port of Gothenburg’s Head of Strategic Development & Innovation Benrick, holding a degree in industrial economics from the Chalmers University of Technology, had been employed by the Swedish Transport Administration for the past seven years. Earlier, he worked for WSP Sweden as Cargo Transport & Logistics Analyst.

Benrick’s main task in his new role will be launching & running strategic initiatives.

LUIS DE CARVALHO Copenhagen Malmö Port’s Commercial Cruise Director

BRIAN BITSCH APM Terminals Nordics’ CCO Bitsch, a.o. a graduate of Copenhagen Business School in business administration – finance and investments, has moved within APM Terminals from Denmark, where he served as Senior Director, to Sweden being now responsible for developing & managing the Nordic markets for the company’s sea container terminals in Aarhus, Gothenburg, and Kalundborg.

Earlier, he worked for Maersk in various positions and across multiple geographies, including as MD of Maersk Bulgaria.

ZENO D’AGOSTINO ESPO’s Chairman

De Carvalho’s career in the cruise, tourism and travel industry spans over 35 years, during which he successfully managed port and destination development globally. He started in the cruise sector in 1986 with Premier Cruise Line and Royal Caribbean Cruise Line, later spending 12 years with Crystal Cruises. For the last decade, de Carvalho managed Bermello Ajamil & Partners’ Europe division.

The President of the Italian Port Network Authority of the Eastern Adriatic Sea has been chosen to chair the European Sea Ports Organisation, where he was Deputy President from November 2018. Holding several degrees from the University of Padua (in political science and economics), D’Agostino has worked in the port industry for many years, a.o., as the Port of Naples’ Secretary-General, the Port of Trieste’s Commissioner, and the Italian Port Association’s President.

TANJA DREILICH HHLA’s CFO

HUMPHREY LAU DESMI’s CEO

Dreilich will join HHLA’s Executive Board on 1/01/23 to assume responsibility for the Finance and Real Estate divisions from 1/02/23. She comes directly from ZF Friedrichshafen, a provider of mobility technology. Dreilich studied economics and graduated with a degree in business administration from the J. W. Goethe University in Frankfurt. She also holds an Executive MBA from the WHU Business School in Vallendar and the Kellogg Business School in Chicago.

After more than 26 years as the company’s CEO, Henrik Sørensen handed over the leadership baton to Humphrey Lau, a seasoned professional with global experience. He worked for 16 years with Novo Nordisk (including establishing the company in China from the ground up in 1994) and Novozymes (responsible for the biofuel development in 2005), and 14 years with Grundfos, where he most recently held the position of Group SVP, Global Industry Business.

MARTIN LEOPOLD InstaFreight’s CFO

TOMAS SJÖDAHL Cargo Director, Eckerö Line

Holding a degree in mathematics from the University of Münster, Leopold takes on the newly created position with the German logtech scale-up. He has gained substantial experience in logistics during his career – especially in finance, sales, and IT. From 2014 to 2017, Leopold was Chief Financial Officer at Deutsche Post DHL Group, followed by work as Chief Sales Officer at the logistics powerhouse in Bonn. Earlier, he had worked for 16 years as a Principal at CTcon.

Sjödahl has 25 years of experience in international logistics, having worked as, among others, CEO at Oy Victor Ek Ab and their Board Member. He started his career with DFDS in Turku in 1998 and also worked for Karjaan KTK (as Managing Director) and Ikiterassi (COO). Sjödahl also offers logistics consulting through Oy Netpac Ab. Eckerö Line’s former Cargo Director, Markku Onniselkä, retired on 30/11/22 but will continue as Senior Advisor until 28/02/23.

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