Baltic Transport Journal 2/2022

№ 2/2022 (106), MARCH/APRIL

ISSN 1733-6732

Baltic Transport bimonthly-daily companion

Journal

E CO N O M Y

The impact of the Russian aggression on Ukraine on transportation S U S TA I N A B I L I T Y

Decarbonising shipping – successfully and fairly MARITIME

Addressing crane cracks and fatigue – before it is too late

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Dear Readers,

W

ere we shocked by the Kremlin’s aggression on Ukraine? Not that much – in the sense that nations formerly behind the Iron Curtain have first-hand experience of what might come from Moscow. And it ain’t pretty. Poland and the Baltic States’ historical-emotional baggage goes even further back when their nations were under St. Petersburg’s thumb. The term ‘understanding putin’ correlated nothing but bad news. As sadly evidenced by the recent events. What, in turn, shocked us as emphatic beings is that a deranged, unrestrained lunatic has put fire to our neighbour’s house, butchering their dwellers. I salute the brave defenders of Ukraine and all their friends near and far, who stand united and support the effort. We are on the right side of history.

We are scrutinising the topic from a transport angle – how the Russian aggression has impacted the world of transport & logistics. History is in the making, so new facts and implications come to the fore every day. We will surely update our mini-report with new intel.

Apart from that, it is your tried and trusted issue of the Baltic Transport Journal. Several reads take you through the economic, sustainability, and tech landscape of what the future has probably in store for our industry. Specifically, we are writing about decarbonising sea shipping – sustainably and fairly. In this context, one read puts the spotlight on ammonia as a marine fuel, while another on the necessary changes to the FuelEU Maritime if it is to push the greening of shipping An Allegory of Victory, Jules Joseph Lefebvre, photo: Artvee forward – not astern as many are concerned with the current proposal. Another facet of ships’ lives is decommissioning; it can be done the green or the wrong way, as detailed in an article (luckily, an uplifting one) on recycling yards. There is nothing like an inspiring energy efficiency read, so please enjoy the pieces on green bunkering chains and a bio-inspired anti-fouling and drag-reducing air lubrication system. Transitioning to a circular economy model is an evergreen, especially regarding logistics, so we are duly hosting a new article. Giving Russian hydrocarbons the finger will only accelerate the electrification of Europe’s economy. As such, we highlight the perils of transporting batteries and list what precautions have to be taken to lower the risks.

Other areas of the maritime sector also deserve to pay careful attention to, among others, seafarers’ mental health and the condition of cranes. Both can lead to the loss of life or limb, at the same time ruining assets and operations.

Finally, to blow off some steam, the Heritage corner and Transport miscellany. The former is a tip of the hat to Greenpeace’s Esperanza (a made in the Baltic ship!) for her dutiful life.

With the latter, we are paying tribute to Lithuanian book smugglers, who were a real rub to Imperial Russia. There is also an entry about what made dogs wag their tails in Gdynia.

Lastly, we bow down to all the women pursuing their careers in transport & logistics. Although you are probably reading this well past 8 March, happy Women’s Day nonetheless!

Przemysław Myszka

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

JONATHAN ARNEAULT, HENDRIK BRINKS, CHRISTOS CHRYSSAKIS, ED COX, DELPHINE GOZILLON, ROBERT KEEN, JOHN LUND, STEVE MARSHALL, RICHARD PHILLIPS, FITZWILLIAM SCOTT, PEREGRINE STORRS-FOX, OLIVIA SWIFT, ANDRZEJ URBAŚ

Art Director/DTP DANUTA SAWICKA

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

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

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PRZEMYSŁAW OPŁOCKI tel.: +48 603 520 020

Cover

Przemysław Myszka ISSN 1733-6732

№ 2/2022 (106), MARCH/APRIL

Baltic Transport bimonthly-daily companion

Journal

E CO N O M Y

The impact of the Russian aggression on Ukraine on transportation S U S TA I N A B I L I T Y

Decarbonising shipping – successfully and fairly MARITIME

Addressing crane cracks and fatigue – before it is too late

OFFICIAL MEDIA PARTNER OF:

Subscriptions

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2/2022 | 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

36 3

REGULAR COLUMNS

3 8 10 12 14 16 17 18 20

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 – A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas 78 Heritage corner: Hope floats: the Greenpeace Esperanza retires after two decades, but the light shines on

by Greenpeace International 84 Transport miscellany 86 Who is who

23

ECONOMY

23 War & logistics – The impact of the Russian aggression on Ukraine on transportation

by Przemysław Myszka 28 The great cut-off – Can LNG replace Russian gas in Europe?

by Ed Cox 30 Going around in circles?

– The why’s and do’s of circular economy

by Ewa Kochańska 34 We need fair competition – Container shipping lines under scrutiny: portent of market re-opening?

by Robert Keen

MARITIME

36 Humans first, workers second – Have mental health interventions made a difference during the COVID-19 crew change crisis?

by Dr Olivia Swift 38 Smells like sustainability – Harnessing ammonia as ship fuel

by Hendrik Brinks and Christos Chryssakis 40 Ready to drop?

– Addressing crane cracks and fatigue – before it is too late

by Richard Phillips

44

LEGAL

44 Taking charge – The risks and precautions when transporting lithium batteries

by Peregrine Storrs-Fox

46

SUSTAINABILITY

46 Bucket of green steam?

– Decarbonising shipping – successfully and fairly

by Przemysław Myszka 56 The ultimate switch – Recommendations for adjusting the FuelEU Maritime to drive true decarbonisation of shipping

by Delphine Gozillon 60 A significant step forward – The EU’s proposal on waste shipments can level the playing field for South Asian ship recycling yards

by Steve Marshall 2/2022 | 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

63

REPORT

63 Baltic port market in 2021

by Marek Błuś

68 66

NEWSLETTER BPO

66 BPO’s EP Debate: the impact of EU’s sanctions, the block’s climate policy, and plans to lessen the dependence on Russian energy

by Andrzej Urbaś 67 Frequentis joins the BPO

by Andrzej Urbaś

TECHNOLOGY

68 First of its kind – Visy’s Automatic Damage Detection System (ADDS)

by John Lund 70 In technology’s trust – Why accountability in bunkering is required to create greener supply chains

by Jonathan Arneault 72 Sailing on air – The AIRCOAT project: a new coating solution for reducing maritime shipping emissions by the AIRCOAT Team 76 A spring tender season in turbulent times – How technology can bring greater order and certainty into logistics

by Fitzwilliam Scott 2/2022 | Baltic Transport Journal | 7

BTJ CALENDAR OF EVENTS WOF Summit 2022, 4-5/05/22, AT/Vienna, www.wofevents.com/en_GB/ Focusing on the three main pillars: digitalisation, e-commerce, and the EU Green Deal, this two-day B2B event will provide the perfect platform to learn about the latest updates and discover where future opportunities for collaboration lie from government, industry, and business leaders. The Summit will also house the WOF Connect & Charity networking evening where business meets charity.

World Ports Conference 2022, 16-18/05/22, CA/Vancouver, www.worldportsconference.com The 2022 edition of the World Ports Conference (#IAPH2022) – organised by the International Association of Ports and Harbors and hosted by the Port of Vancouver – will bring together leading port stakeholders in a new format to #ClosetheGaps in global seaport competitiveness, setting an agenda to raise the performance of the world's major port regions.

ITS European Congress 2022, 30/05-1/06/22, FR/Toulouse, itseuropeancongress.com The ITS Congresses underline the importance of Intelligent Transport Systems (ITS), particularly in cities and regions where they are hosted and are important channels to raise awareness of smart mobility solutions among policymakers, experts and the general public. The ITS Congresses also represent the ultimate showcase of mobility services deployment and are the means for the ITS Community to keep pace with the incredible evolution of the industry.

SIL Barcelona, 31/05-2/06/22, ES/Barcelona, www.silbcn.com/en/index.html After two years of absence due to the health situation, the Consortium of the Free Zone of Barcelona (CZFB) promotes the celebration of the 22nd edition of the International Logistics and Material Handling Exhibition (SIL), one of the main meetings of the logistics sector in Europe, where the entire logistics chain is represented.

Baltic LNG & Gas Forum, 7-8/06/2022, LT/Klaipėda, informaconnect.com/baltic-lng-gas-forum Join industry game changers who are altering the Baltic gas and LNG markets by providing greater energy security and meeting European climate change targets. The Forum’s agenda will focus on topics such as ensuring energy security in the Baltic region; addressing infrastructure challenges (with a spotlight on small & mid-scale projects); analysing supply & demand (incl. LNG in maritime and road transport); finding out how regulations and policy are changing the market outlook; and assessing the role of interconnectors in international gas flows.

TOC Europe, 14-16/06/22, NL/Rotterdam, www.tocevents-europe.com Welcome to the AGM for port and cargo supply chain professionals – where the global community will be re-connecting once again face-to-face in 2022! With an unrivalled 40+ year heritage, here is the place to access C-level decision-makers and influencers, engineers, automation leads, digitalisation specialists and more, all hungry to access the latest tech to supercharge their port operation strategies – all underneath one roof. With the industry now keen to get back on the road towards growth, this is the essential event that container supply chain professionals turn to year-on-year to embrace the exciting new tech revolutionising the sector.

Transport Week, 14-15/06/22, PL/Gdynia, www.transportweek.eu

14-15 Gdynia

June 2022 Poland

CONFERENCE AGENDA

The Transport Week series returns as great speakers and an ever engaged audience gather to get the latest insight on topics defining the shape of the transport industry. Join us during two days filled with presentations and discussions on a broad range of issues, ranging from the impact of the EU’s climate policy on the transport sector, through an in-depth analysis of the container, ro-ro and ferry markets, to a closer look at the most exciting infrastructure projects currently underway in the Polish ports.

International Rail Forum & Conference 2022, 5-7/10/22, CZ/Prague, irfc.eu/en The International Railway Forum & Conference (IRFC) is one of the leading events in the international railway calendar. It will bring together top executives and decision-makers, rail and logistics professionals, customers, influential politicians and institutions from across Europe. The 2022 edition will, i.a., focus on innovative technologies and best practices in rail freight and logistics in Europe and across the Euro-Asian market, along with European and Asian manufacturers, freight and intermodal operators and forwarders presenting solutions, products and services. The best railway-related projects will be showcased, too.

WOF EXPO, 12-13/10/22, CZ/Prague, wofexpo.com

Feat. European Green Deal in transport and logistics by

It will be the second year of the international B2B exhibition focused on the Central & Eastern Europe region. This year around, it will place at PVA Expo Prague. Similar events abroad inspired the organisation of the WOF EXPO, as CEE, a very dynamic region, had none. From the need to an idea to a bustling B2B business platform, an innovative logistics, e-commerce, and supply chain event was born. WOF EXPO will be the ideal spot for anybody seeking and presenting opportunities for the ‘New Europe’ region – your go-to networking event.

Namiary na Morze i Handel

TOC Americas, 18-20/10/22, PE/Lima, www.tocevents-americas.com TOC Americas is a market-focused conference & exhibition which takes place annually in one of the world’s key shipping hubs. This conference-led event is the complete container supply chain show for Americas, bringing together shippers, logistics providers, shipping lines, 3PLs, port authorities, terminal operators and other key audiences to learn, debate and network. Dry bulk shipping professionals will also have a dedicated conference track.

TOC Asia, 29-30/11/22, SG/Marina Bay Sands, Singapore, www.tocevents-asia.com After two years of industry change, port technology advancement and digital acceleration, we are pleased to bring the industry back together face-to-face. Take part in our two-track content agenda to hear from change-makers within the global container supply chain and discover the latest innovations within terminal operations. Alongside our first-class conference, you will also benefit from a global port technology exhibition and the return of TOC’s famous social programme.

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.

8 | Baltic Transport Journal | 2/2022

Discover the perfect view for a port.

Never mind our stunning sea view. Every port has one. We’re talking about the railroad and motorway right outside our office windows. For a port, that’s a view, and a location worth its weight in gold. At the Port of Oxelösund, we have a direct connection to the Swedish railway system, and to Sweden’s biggest motorway, European route E4. This gives us unique possibilities when it comes to processing and transporting goods. If you value logistics with speed and flow, give us a call.

The Port of Oxelösund is more than a port. We can handle your entire logistics chain and optimize every part of your goods’ journey, from start to finish. Our goal is to be the Baltic’s leading port terminal, with Europe’s best stevedoring services.

oxhamn.se

For more Market Statistics Made Simple please visit: www.baltictransportjournal.com

Tallink & Silja Line: 101,938 ro-ro cargo units

The Port of Helsinki:

The company’s fleet also served 720,261 passengers over 2022’s first three months, up by 169.5% year-on-year.

The Finnish seaport’s international freight traffic totted up to 2.30mt (+6.8% year-on-year), while cabotage added the remaining 27.7kt (+61.6% yoy).

carried in Q1 2022 (+19.7% yoy)

2.33mt handled in I-II 2022 (+7.2% yoy)

Tallink & Silja Line’s volumes Route Estonia-Finland Finland-Sweden Estonia-Sweden Total Estonia-Finland Finland-Sweden Estonia-Sweden Total Estonia-Finland Finland-Sweden Estonia-Sweden Total

Q1 2022 Ro-ro cargo units 69,997 18,846 13,095 101,938 Passengers 427,805 229,905 62,551 720,261 Private vehicles in ferry traffic 122,426 13,200 4,754 140,380

yoy +21.5% +11.2% +23.4% +19.7% +112% +310% +545% +169.5% +80.7% +70.6% +1,328% +85.2%

The Port of Helsinki’s volumes I-II 2022 yoy Traffic by cargo group (thousand tonnes) Unitised, of which 1,907.2 +5.7% Wheeled (ro-ro) 1,345.5 +11.3% Containerised 651.7 -5.8% Dry bulk 233.0 -2.1% Break-bulk 172.4 +51.7% Total 2,332.6 +7.2% Detailed unitised freight traffic Ro-ro cargo units 106,033 +11.9% TEUs 67,438 -12.1% Passenger traffic Tallinn 494,566 +88.8% Stockholm 80,218 – Travemünde 13,136 +69.1% Mariehamn 1,588 – Other 12 -75.5% Total 589,520 +118.5% Vehicles in ferry traffic 143,700 +65.5%

DFDS:

43,011k lane metres filled in 2021 (+5.2% yoy) Counting 18 metres per one unit, the company’s fleet transported some 2.39m trucks & trailers and other cargo transport units Europewide last year.

DFDS’ volumes Market

Photo: Tallink Grupp/Jony Karlsson

The Port of Amsterdam:

71.3mt handled in 2021 (-4.0% yoy) The turnover of oil products, totalling 35.7mt, noted the sharpest decrease of 12.9% year-on-year. Other dry bulk goods came in second with 11.7mt (-0.8% yoy), followed by 10.4mt of coal (+40.5% yoy), 6.6mt of agro-bulk (-12% yoy), 4.1mt of other liquid bulk (-4.7% yoy), 1.5mt of wheeled (ro-ro) cargo and break-bulk (+7.1% yoy), and 1.4mt of containerised freight (+27.3% yoy).

The Port of Hirtshals: 152k trucks & trailers handled in 2021 (+6.3% yoy)

The Danish seaport took care of 2.02mt last year, up 7.4% on the 2020 result.

Hirtshals’ 2021 passenger traffic was on a par with 2020 when some 1.1m travellers were served.

10 | Baltic Transport Journal | 2/2022

2021 yoy Ro-ro & ferry cargo traffic 19,316k lane metres Channel +1.5% 1,073.1k cargo units 13,769k lm North Sea +5.7% 764.9k 5,034k lm Mediterranean +24.8% 279.7k 4,467k lm Baltic Sea +0.7% 248.2k 425k lm Passenger +18.4% 23.6k 43,011k lm Total +5.2% 2,389.5k Logistics (thousand cargo units) Dry goods 325.4 +8.7% Cold chain 218.9 -3.1% Total 544.3 +3.6% Passenger traffic (thousand ferry travellers) Channel 441 -55.4% Baltic Sea 214 +2.4% Passenger 214 -28.7% Total 869 -42.0%

MARKET SMS Finnlines: 785k ro-ro cargo units carried in 2021 (+8.6% yoy) The company’s fleet also transported 1,410kt of non-unitised freight, noting a year-on-year increase of 27.4%. On the passenger side, Finnlines served 572k travellers, up 14.2% on the 2020 result. The shipping line’s ferries also carried 171k private vehicles (+11% yoy).

Wasaline:

Kombiverkehr: 937,959 road consignments

The Finnish-Swedish ferry company also transported 21,259 ro-ro cargo units, a 25.3% year-on-year increase. In addition, the company’s Wasa Express and then Aurora Botnia carried 24,590 passenger vehicles (+69.2% yoy).

The company’s international services advanced by 8.5% year-on-year to 663,949 consignments, those within Germany – by 15.4% yoy to 190,521, and to & from the country’s Baltic ports – by 3.2% yoy to 83,486. Translated into containers, Kombiverkehr transported some 1.88m TEUs last year.

107,659 passengers served in 2021 (+87.5% yoy)

The Port of Helsingborg:

carried by rail in 2021 (+9.3% yoy)

8.39mt handled in 2021 (+5.5% yoy)

Hupac: 1,123,562 road consignments

The Swedish seaport also served 4.01m passengers, a 12.5% increase on the 2020 result. Helsingborg’s container traffic rose, too: seaborne by 2.2% year-on-year to 273k TEUs and railborne by 9.1% yoy to 24k twenty-foot containers. Wheeled cargo traffic also advanced – by 0.7% yoy to 450k ro-ro cargo units.

Hupac’s Transalpine traffic via Switzerland came in first with 597,512 consignments (+11% year-on-year), followed by Non-transalpine – 479,181 (+10.4% yoy) and Transalpine via Austria and France – 46,869 (+10.2% yoy). Container-wise, the company transported 2,118k TEUs last year.

carried by rail in 2021 (+10.7% yoy)

The Port of Hamburg: 8.7m TEUs handled in 2021 (+2.2% yoy) Of these, 5.4m TEUs were taken care of in hinterland traffic (-1.8% year-on-year), while the remaining 3.3m TEUs in transhipment (+10% yoy).

Rail-bound container flows amounted to 2.79m TEUs (+8.1% yoy). Barges carried 128.5k TEUs (-17.1% yoy). Truck transports accounted for the remaining 2.48m TEUs (-10.2% yoy). In total, the German port handled 128.7mt (+1.9% yoy), of which 73.8mt in import (+5.2% yoy) and 54.9mt in export (-2.2% yoy) traffic. With 87.7mt (+1.3% yoy), containerised freight topped Hamburg’s cargo turnover, followed by 21.6mt of dry bulk (+11.3% yoy; excluding agricultural products), 11.8mt of liquid bulk (+1.7% yoy), 6.4mt of agro-bulk (-14.7% yoy), and 1.2mt of break-bulk (+6.9% yoy).

2/2022 | Baltic Transport Journal | 11

For more news items please visit: www.baltictransportjournal.com

Photo: Ferus Smit

Thun Tankers’ other NaabsaMAX – delivered The Ferus Smit shipyard in the German Leer handed Thun Britain over to the Dutch-Swedish shipping line, the second in a series of two ‘Not Always Afloat But Safely Aground’ tankers (Naabsa). The 79.9 by 15 m, 4,250 dwt, 1A ice-class vessel offers 4,800 m3 cargo capacity (across eight coated tanks suited to transport oil products and IMO type II chemicals). Like her sister ship Thun Blyth, Thun Britain has been chartered to the Geos Group, a supplier and trader of marine gas oil. The pair will serve harbours with tidal restrictions, being able to rest on the seabed while (un)loading during low tide.

Photo: DSV

Finnlines lays keel for Finnsirius Works are proceeding on the company’s hybrid ferry, set for delivery with her sister ship Finncanopus in autumn 2023. The keel-laying ceremony for Finncanopus will take place at China Merchants Jinling Shipyard in Weihai in August 2022.

Each of the 235 m long 1A Super ice-class ferries will offer room for 1,100 passengers (across 323 cabins) and provide 5,200 lane metres of cargo capacity. The two will serve Finnlines’ traffic between Kapellskär and Naantali via the Åland Islands.

Furetank receives a green credit guarantee The Swedish Export Credit Agency (EKN) has, for the first time, given its guarantee to a shipping company. It will be used to pre-finance Furetank’s next oil products and chemicals tanker in the Vinga-series. The guarantee will cover 80% of the lender Tjörns Sparbank’s risk. Anders Hermansson, Head of the Swedish Shipowners’ Association, praised EKN’s move, “It is an extremely positive decision for the shipping sector, which is a capital-intensive industry where climate investments costs are high and difficult to sustain internally. It is a big step for shipping’s green transition globally, where Swedish shipowners top the environmental list. When our members invest in new technology, it pushes the boundaries not only for the given vessel but for the entire sector.”

Furetank-Eskilstuna Biogas bioLNG deal The two have signed a letter of intent enabling the set-up of a 5,000t/year liquefied biogas (bioLNG) plant in Eskilstuna. Production is likely to start in Q4 2023. Gas will be extracted from manure and food waste coming from the municipalities of Eskilstuna and Strängnäs and then upgraded to bioLNG for use as fuel. Furetank will take at least three-quarters of the production over ten years. The bioLNG production plant has received SEK140m (about €13.4m) in climate investment support from the Swedish Environmental Protection Agency. Furetank will use the bioLNG to lower the carbon footprint of its fleet, including minimising the company’s exposure to the inclusion of sea shipping into the European Union Emission Trading System.

12 | Baltic Transport Journal | 2/2022

DSV’s new multiuser warehouse near Copenhagen The company has added a new 95k m2 facility to its logistics centre in Hedehusene. The warehouse features the AutoStore automated robotic storage and picking solution, available to multiple users. It also offers GMP- and GDP-certified cooling and freezing facilities, with several temperature zones extending to -80°C. Together with Hybrid Greentech, DSV is testing a solar cell and battery solution atop the warehouse.

The parties say it can cut the facility’s carbon footprint by 42% relative to a scenario without the installation. Year-wise, the solution will help avoid emitting around 113t of CO2. Surplus energy can also be fed to the grid. After the trial, DSV will decide whether to furnish its other warehouses with the solar power generation-storage system. The German Sustainable Building Council (DGNB) has pre-certified the facility with the Silver mark. Another 38k m2 warehouse will be added to the Hedehusene complex by 2022-end, increasing its capacity to 231.5k m2.

WHAT’S NEW? Poland’s new ferries to feature ABB and Wärtsilä’s tech First, Remontowa Shiprepair Yard has ordered Wärtsilä’s 31DF dual-fuel engines for the three ro-paxes it is constructing for Polferries and Unity Line, plus the producer’s LNGPac fuel storage, supply and control system. Next, the yard will receive a complete power, automation, and propulsion package for furnishing the vessels. The ABB order includes batteries, the Azipod electric propulsion (two 7.5 MW units/vessel), and the equipment to draw power from the shore. The Polish shipyard will deliver the newbuilds one apiece in 2025, 2026, and 2027. Each of the 195 m long, dual-fuel (LNG/bioLNG) hybrid ferries will offer room for 400 passengers and 4,100 lane metres for trucks & trailers. The ships will connect Świnoujście with Ystad and Trelleborg. The ferry lines intend to run their newbuilds entirely on liquefied biogas by 2025.

Photo: Liebherr Maritime Cranes

300th Liebherr LHM 550 – delivered Port Gdański Eksploatacja (PGE) has received the celebratory machine, the most popular mobile harbour crane in Liebherr’s portfolio.

PGE’s LHM 550 has a boom length of 48 m and a lifting capacity of 104t. The crane will be primarily used to handle coke, coal, and scrap metal. The first LHM 550 was delivered to a client in Kuwait in 2010.

Karlshamn to grow logistically

Gdańsk to kick off another modernisation project

CH Square and Swedish Logistic Property (SLP) have exercised their options to develop additional land in Karlshamn – in the direct vicinity of the port and its rail terminal. CH Square, which should have finished a 23k m2 logistics centre on behalf of DFDS by 2022-end, will develop an additional 50k m2 in the southern part of Stilleryd in the Municipality of Karlshamn. At the same time, SLP has decided to develop an extra 25k m2 in Stilleryd, too. The Municipality of Karlshamn owns around 2.0m m2 of land near the port and the town’s rail network, of which 1.0m has already been planned in detail. The rest, earmarked for logistics and industry, will receive their detailed plans shortly.

The Polish port will invest PLN533m (around €112m, including the EU’s support of €95m) to upgrade four quays in its Inner Harbour. In total, some 1,916 m of quay wall will be revamped across the Bytomskie, Wiślane, Rudowe III, and Węglowe quays to accommodate larger and deeper vessels served with modern cargo handling equipment (such as Liebherr’s LHM 550 mobile harbour cranes). The European Climate Infrastructure and Environment Executive Agency is currently evaluating the project, with the port authority expecting to see the green light in June 2022.

Once inked, the project will have been completed by 2026. The Port of Gdańsk recently completed its previous Inner Harbour overhaul project (PLN595.5/€125.5m, co-funded by the EU’s Connecting Europe Facility), covering 5.0 km of quay wall and which also included deepening the fairway (9.35-10.6 m of ship draft).

European Green Corridors Network – established Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping has partnered with the ports of Gdynia, Hamburg, Rønne, Rotterdam and Tallinn to advance the decarbonisation of the maritime industry. The partnership will demonstrate the early commercialisation of alternative fuel supply chains, provide a roadmap to scaling them up, and create a blueprint for rolling out green corridors in other locations. The parties will start with a pre-feasibility to identify the potential routes, vessel types, and fuels to establish high impact green corridors in the Baltic and the North Sea regions. The next phase will assess the shortlisted routes’ technical, regulatory, and commercial feasibility. Finally, the project partners will implement the vision and establish green corridors in Northern Europe and the Baltic Sea. 2/2022 | Baltic Transport Journal | 13

For Europe-wide maps news on ro-ro & ferry container intermodal please visit: www.europeantransportmaps.com

More runs on TX Logistik’s Leipzig-Verona intermodal service As of 5 April 2022, the company’s trains link DUSS-Terminal in Germany with the Sommacampagna-Sona facility in Italy eight instead of six times per week. The LeipzigVerona round-trips include a stopover in the Austrian Hall. A single train set offers the capacity of 34 units for carrying both containers (including bulk and tank) and trailers. The company says it will likely further increase the frequency of the Leipzig-Verona service, following the current high market demand for rail transport capacity.

Antwerp’s two new intermodal services First, the Tango Rail Line has been put in place, offering a once per week round-trip between the Belgian port (MPET, AG, PSA) and Birsterminal in Birsfelden (via Terminal Container Athus in southern Belgium). Second, Contargo has linked its Industrial Park Frankfurt-Höchst with the Port of Antwerp. It is also a weekly connection, with the train sets leaving Frankfurt on Mondays and arriving in Antwerp the next day.

Photo: TX Logistik

Dutch post back on rails – after 25 years The country’s PostNL has kicked off a rail service, which sees trailer train sets going weekly between Coevorden and Oslo. The connection will be one of the means of helping the Dutch postal company decrease its carbon footprint by 80%/kilometre versus the 2017 level. The CoevordenOslo service will be some 70% environmentally friendlier than pure truck transports, saving around 30t of CO2/year.

New Norway-Finland rail service With the help of CargoNet and Nurminen Logistics, the Norwegian Port of Narvik will set up a twice a month route linking it with the Haparanda-Tornio SwedishFinnish border crossing. The service is due for launch in late April 2022. CargoNet will be responsible for the Norway-through-Sweden rail leg, while Nurminen Logistics for freight forwarding within Finland.

Meanwhile, Norway’s rail infrastructure manager Bane NOR is upgrading the Port of Norvik’s rail freight terminal to handle 100k TEUs/year.

From Belgium to Turkey – by rail

Photo: Birsterminal

MSC connects the Baltic with US East Coast Starting from the end-March 2022, the container carrier weekly connects the Baltic seaports of Klaipėda, Gdynia and Gothenburg and the North Sea Bremerhaven with New York, Philadelphia and Norfolk. The transit time to NY from Klaipėda is 15 days, Gdynia – 13, and Gothenburg – 11.

Additional departures on Kombiverkehr’s North-South routes First, the company has increased the frequency of its Rostock-Verona intermodal service to seven weekly round-trips. Next, the timetable of the ColognePort of Trieste link has gained an extra departure, up to four/week now.

TT-Line’s first Green Ship sets sail for the Baltic Nils Holgersson, the first in a series of two new ferries for the German Baltic shipping line, left the Chinese Jiangsu Jinling Shipyard heading for Travemünde.

The GT 56,138, 230 by 31 m, gas-run ro-pax – offering room for 600 passengers and 4,600 lane metres of cargo capacity – arrived in Germany after about a month. Nils Holgersson’s sister ship’s delivery is expected for autumn 2022.

TT-Line’s ferry that bore the name Nils Holgersson will be renamed Akka.

The Sofia-based Gopet Trans, with the help of Hupac, has started connecting Antwerp and Halkalı with a stopover in Duisburg. The new intermodal service mainly carries 45’ high cube containers.

Hupac links Austria and Serbia The Swiss rail company launched on 2 March 2022 a once per week shuttle between Belgrade and Vienna. Hupac’s trains are handled at the WienCont terminal in Austria and in Serbia at the Dry Port Terminal Pancevo.

14 | Baltic Transport Journal | 2/2022

Photo: TT-Line

MAP NEWS New intra-Swedish rail service

Stena Line’s E-Flexers repositioned within the Baltic

Green Cargo has started connecting the Arken Intermodal Terminal in the Port of Gothenburg with Train Alliance’s facility in Rosersberg near Sweden’s capital. The service runs six times per week, offering 40 cargo transport units of capacity per journey. Paper products destined for the British and French markets make up the bulk of the new service’s volume. There are plans to increase the Gothenburg-Rosersberg timetable to two trains/day.

The two under construction ferries previously planned to enter the Norvik-Ventspils service will now be put on the Gdynia-Karlskrona one. The yet-to-be-named ro-paxes, each 240 m long and offering room for 1,200 passengers and 3,600 lane metres for transporting freight, will start plying between Poland and Sweden this July and November. In Gdynia, the newbuilds will berth at the brand-new Public Ferry Terminal. The ferries are equipped to draw power from the shore.

The recently jumboised Stena Scandica and Stena Baltica will continue serving the Norvik-Ventspils crossing.

New Lithuania-Poland container rail link The Lithuanian Intermodal Container Service is trialling a potentially regular service connecting its Kaunas facility with DCT Gdańsk. The test run arrived at the deepwater container terminal in Poland on 16 February; transit time amounted to two days.

New intermodal service Germany-Turkey CEVA Logistics has launched a new daily route that links the rail terminals in Halkalı in Turkey and Duisburg in Germany. The service is open for trailers (including mega box) and containers (45’ high POH_205_x_133.5.qxp_(BTJ Package 2021) time 13.04.21 Seite 1 cube pallet wide).

The transit of the17:28 HalkalıDuisburg connection is six days.

Photo: Stena Line

YOUR PORT JUST ONE CLICK AWAY.

PORTOFHAMBURG.COM

Port of Hamburg Marketing Pickhuben 6, 20457 Hamburg, Germany Phone: +49 40 377 09-0 E-Mail: info@hafen-hamburg.de 2/2022 | Baltic Transport Journal | 15

MADE IN CHINA Nurminen Logistics-Kazakh railways co-op The Finnish company and Kazakhstan Temir Zholy (KTZ), the country’s national railroad haulier, have partnered to trial rail shipments along the Middle Corridor. The two plan to run trials in April-June 2022, sending China-Europe train sets via Kazakhstan, Azerbaijan, and Georgia. If successful, the companies intend to establish a commercial offering by September 2022. In addition, Nurminen Logistics and KTZ will cooperate on the former’s China-Finland services. Specifically, they want to use Kazakhstan-registered & owned wagons to avoid falling under sanctions imposed on Russian rail companies.

Middle Corridor rail JV – in the making Azerbaijan, Georgia, Kazakhstan, and Turkey will set up a joint undertaking to facilitate Asia-Europe rail traffic through the Trans-Caspian International Transport Route, also known as the Middle Corridor (a trade lane that omits Russia and Belarus). The JV will offer transport & logistics services, including an IT platform to automate the China-Turkey freight flow and then farther towards western Black Sea ports (Constanța, Odesa, and Istanbul) for onward shipment (also by rail to Poland via Ukraine). The new organisation is expected to be up & running by mid-2023. Plans also speak of linking the Middle Corridor (through Caspian ports) with the International North-South Freight Corridor (Iran, the Arabian Peninsula, Pakistan, India, and eastern Africa).

Second Vietnam-Belgium train – scratched before launch The Railways of Transport and Trade Joint Stock Company (Ratraco) planned to connect Da Nang in Vietnam with the Belgian Liège. The service was due for launching in April 2022 to carry IKEA’s furniture, further distributed to Hamburg and Melzo from Belgium. Like the first Vietnam-Belgium container rail link (Hanoi-Liège), the new one was to cross the Chinese Zhengzhou on its way to Europe. Russia’s aggression on Ukraine has put Ratraco’s Asia-Europe business to halt.

COSCO’s new China-Europe container train The company launched a new service between Qingdao and Mannheim, with the first set leaving the Chinese city on 18 February. The train carried 100 containers loaded with, among others, auto parts, daily necessities, and raw chemical materials and was expected to arrive in Germany after 22 days.

"THE BEST MAP OF THE NEW SILK ROAD! * NOT A REAL QUOTE (BUT WOULD BE IF MARCO POLO WAS HERE WITH US – SCAN THE QR CODE AND CHECK FOR YOURSELF!)

16 | Baltic Transport Journal | 2/2022

WHAT’S IN THE CABINET Project proposals submitted for the 2021 CEF Transport call The European Climate, Infrastructure and Environment Executive Agency (CINEA) has received 447 proposals requesting almost €14.5b

in co-funding. The 2021 CEF Transport call for proposals was published in mid-September last year, with a total budget of €7.0b.

The proposals’ admissibility and eligibility will now be checked. Afterwards, the projects will be evaluated against the specific award criteria of the call. The entire evaluation process, which will involve external independent experts (with the exception of the Alternative Fuels Infrastructure Facility), is expected to be concluded by the end of June 2022, when the results will be announced.

Priority TEN-T Core Network Smart & interoperable mobility TEN-T Comprehensive Network Safe & secure mobility Adaptation of TEN-T to civilian-defence dual use Alternative Fuels Infrastructure Facility (AFIF)1 Sustainable & multimodal mobility Total 1

No. of proposals 208 102 39 34 26 22 16 447

Requested funding (€) 11.48b 1.37b 730m 255.7m 417.1m 131.5m 70.6m 14.46b

Available funding (€) 3.62b 550m 600m 250m 330m 1.575b 125m 7.0b

The AFIF call continues to be open, with cut-offs until 19 September 2023

Fidelis joins the Poseidon Principles for Marine Insurance The Bermuda-based company has become the seventh Signatory of the December 2021-launched initiative, which sets a benchmark for being a responsible insurer in the maritime sector and provides actionable guidance on achieving this. The Poseidon Principles are aligned with the International Maritime Organization’s ambition for greenhouse gas emissions (GHG-E) from international shipping to peak as soon as possible and to reduce total annual GHG-E by at least 50% by 2050 compared to 2008. As a step toward alignment with the Paris Agreement, the Poseidon Principles for Marine Insurance also measure underwriting portfolios against a 100% by 2050 CO2 reduction trajectory. Signatories commit to publicly disclose the climate alignment of their hull and machinery portfolios every year. “Measuring and reporting emission data is the first step towards a sustainable maritime industry as it enables tracking progress over time and building a fact-based strategy for reaching climate ambitions. As more Signatories join, the Poseidon Principles for Marine Insurance will continue sending a strong signal from leading marine insurers in support of shipping decarbonization,” said Patrizia Kern, Head Marine at Swiss Re Corporate Solutions (also a Signatory) and Chair of the Poseidon Principles for Marine Insurance Drafting Committee. Other Signatories are Gard, Hellenic Hull Management, SCOR, Victor Insurance, and Norwegian Hull Club.

Affiliate Members include Willis Towers Watson, Cefor, and EF Marine.

International Union of Marine Insurance is a Supporting Partner.

ABS publishes First, the American Bureau of Shipping (ABS) has released its white paper Offshore Production of Green Hydrogen. In it, the class explores the conditions driving the marine and offshore industries toward the adoption and production of green hydrogen, the technologies that make its production feasible, and how those technologies can be incorporated into an offshore facility. ABS is working with Hyundai Heavy Industries (HHI)and Korea Shipbuilding and Offshore Engineering (KSOE) to jointly develop technical guidance for green hydrogen production from offshore platforms, an essential first step in designing and constructing such a facility by 2025. Second, in the wake of recent fire incidents on vehicle-carrying ships, ABS has responded to industry concerns with an update to its Rules on RoRo Vessels in Response to Fires. The new requirements (effective for newly built vessels on 1 July 2022) within ABS’ Marine Vessel Rules include supplemental fire detection, alarms, firefighting equipment, as well as provisions associated with vehicle recharging. Third, the organisation has published the Practical Considerations for Hybrid Electric Power Systems Onboard Vessels maritime technical guidance. The publication examines the different forms of hybrid electric power systems, offering practical insight into their application onboard. In detail, it explores renewable energy sources, energy storage systems, battery management approaches, the potential for modelling and simulation, the impact on port infrastructure, and the regulatory landscape.

Brest Commitments for the Oceans Representatives of more than 100 countries, accounting for over half the world’s exclusive economic zones, alongside the UN Secretary-General, UNESCO’s Director-General and the Secretary-General of the International Maritime Organization, have subscribed to the Brest Commitments for the Oceans. In their determination to preserve Earth’s waters, the parties will work towards protecting biodiversity and ocean resources, facing climate change, and ending plastic pollution. They have also pledged to put oceans atop the global political agenda. Signing the Brest Commitments for the Oceans during the One Ocean Summit this February was the capstone of the French Presidency of the Council of the European Union.

2/2022 | Baltic Transport Journal | 17

VENTURE FORTH ESBJERG-MOFFATT & NICHOL DIGITAL TWIN CO-OP • The Danish seaport has teamed up with the Californian global infrastructure advisory firm specialised in port planning to develop a digital twin for Esbjerg’s future offshore wind harbour. “Port Esbjerg and the supply chain in Esbjerg have vast experience in supporting offshore wind projects, but we need to simulate the future to plan optimally today, and for this, we are excited to work with Moffatt

& Nichol,” Dennis Jul Pedersen, the seaport’s CEO, said. “A digital twin allows Port Esbjerg to simulate every operation in context to future projects and optimise the infrastructure accordingly,” Joshua Singer, Offshore Wind Lead with Moffatt & Nichol, explained the project’s target. The Port of Esbjerg has participated in setting up 55 offshore wind parks for some 22 GW of installed capacity. •

EINRIDE SELLS – DOMESTICALLY AND ABROAD • First, Apotea, Sweden’s largest online pharmacy, will employ three lorries from the Swedish electric and autonomous trucking developers for shipment carriage from a warehouse in Morgongåva to a parcel terminal in Stockholm. Einride’s lorries will be employed all day round, thus replacing some 40-50 trucks that served the route in question. Apotea sends over one million parcels each month.

The new solution is expected to start running in April 2022, saving around 4,000t of CO2 emissions in three years. Second, the Swedish

freight tech company will supply Maersk’s operations in the US with 300 electric trucks, 150 charging stations, connectivity services, and an operating system. The Class-8 vehicles of BYD’s 8TT model will be supplied in 2025-2035, with the initial delivery assembled in California. Maersk will use the fleet to electrify its warehousing, distribution, and transportation in selected US cities. The e-trucks will help Maersk bring its emissions to net-zero across the company’s business and value chain by 2040. •

GEBRÜDER WEISS’ HYDROGEN TRUCK – ONE YEAR OF EMISSION-FREE OPERATIONS • The Lauterach-based company has summarised one year of running its very-first hydrogen truck, used for daily short-distance transportation in Switzerland. The 36-tonne-truck, the Hyundai XCIENT Fuel Cell model, made 70,000 km, saving some 80t of CO2 emissions. With 7.5 kg/100 km, hydrogen consumption was lower than that specified by the truck maker.

18 | Baltic Transport Journal | 2/2022

The average daily range was 430 km, allowing the 350 kW electric motor truck to operate day-round on a single fuelling (32 kg of tank capacity, refilled in about 12 minutes). Gebrüder Weiss’ hydrogen truck had to pay only one workshop visit for a technical inspection. The company plans to deploy other hydrogen trucks in Austria and southern Germany. •

VENTURE FORTH TES FAST-TRACKS ITS WILHELMSHAVEN GREEN GAS TERMINAL

GEODIS-RENAULT URBAN LOGISTICS E-TRUCK CO-OP

• Tree Energy Solutions (TES), founded by the Belgian investment company AtlasInvest, will accelerate the set-up of the facility that, once fully commissioned, could cover 10% of Germany’s energy demand. The 25 TWh of yearly capacity Phase 1 is to be ready by winter 2025, making it possible to import & produce 0.5mt of hydrogen in the German seaport.

The full-scale Wilhelmshaven Green Gas Terminal will comprise six tanks and six berths; its capacity will rise to 250 TWh/5.0mt of hydrogen by 2045. TES intends to produce green hydrogen in countries with a renewable power mix and combine it with CO2 to create an energy carrier transported to Wilhelmshaven by a purpose-built fleet. The ‘load’ will be converted back to hydrogen in the German port, with the CO2 captured for reuse in a closed-loop production-transportation system. •

• The two have partnered to develop Oxygen, a 16-tonne electric city truck with a total cost of ownership (TCO) comparable to that of a diesel vehicle – but without the fossil fuel externalities. With Oxygen, GEODIS and Renault Trucks want to eliminate urban road freight-related nuisances, such as pollution and noise, and increase the safety of both the drivers and city folk. The prototype’s delivery is scheduled for 2022-end. The e-truck will be trialled in Paris starting in 2023.

The real-world testing will be followed by a phase of adaptation of the vehicle incorporating feedback from drivers covering comfort of use, practicality, recharging, etc. Then, a study will see how to optimise the TCO. GEODIS intends to reduce its CO2 emissions by 30% by 2030. To that end, the company will have provided carbon-free deliveries to 37 French cities by 2023. •

Photo: TES

Photo: Renault Trucks

CATCHING MICROPLASTICS WITH SCRUBBERS • Wärtsilä and the Grimaldi Group are trialling an open-loop exhaust gas treatment system that traps microplastic particles before the wash water returns to the sea. According to early test results, the filtration system, designed and patented by Grimaldi, efficiently captures particles smaller than 10µm, and the captured

concentration by volume equals around 76 particles/m 3. A 10 MW engine will require scrubbers to process approximately 450 m3 of water per hour. Wärtsilä’s will add the microplastics filtration capability to its future wash water treatment system. All revenues from the patent licensing will go to charity. •

NORSEPOWER-NAPA CO-OP • Thanks to the partnership, NAPA Voyage Optimization software will come as an option in all future sales of Norsepower’s Rotor Sails solution, applicable to newbuilds and retrofits. The software determines

the best possible voyage plan for a vessel to maximise the energy savings, taking into account weather conditions throughout the sailing, likewise each ship’s design profile and operational requirements. •

NORSEPOWER TO INSTALL ITS ROTOR SAILS ON CLDN’S RO-RO • The 2018-built GT 74,273 Delphine will receive two 35 m tall and 5.0 m in diameter tiltable sails, said to reduce the ship’s fuel consumption & carbon emissions by 7-10%. The installation will have been completed

by December 2022. The deal with CLdN is Norsepower’s seventh Rotor Sails contract and the third for the tilting version of the Finnish company’s auxiliary wind propulsion system. • 2/2022 | Baltic Transport Journal | 19

CHART OF THE ISSUE

A A 10-Point 10-Point Plan Plan to to Reduce Reduce the the European European Union’s Union’s Reliance Reliance on on Russian Russian Natural Natural Gas Gas

A 10-Point Plan to Reduce the European Union’s Reliance onPlan Russian Natural Gas A 10-Point to Reduce the European Union’s Measures Measures implemented implemented this this year year could could bring bring down down gas gas imports imports from from Russia Russia by by over over one-third, with additional temporary options to deepen these cuts to well over one-third, with additional temporary options to deepen these cuts to well over half half while while still still lowering lowering emissions. emissions.

Reliance on Russian Natural Gas

Measures implemented this year could bring down gas imports from Russia by over Action 11 Action Action Action 2 2 these cuts to well over half while one-third, with additional temporary options to deepen still lowering emissions.

Measures implemented this year could bring down gas imports from Russia by over No new gas supply contractsoptions to deepen these Replace Russian supplies with gas while one-third, with additional temporary cuts to well over half No new gas supply contracts Replace Russian supplies with gas with Russia from alternative sources with Russia from alternative sources stillAction lowering emissions.

1 Action 2 Action 1

Impact: Taking advantage of expiring Impact: Taking advantage of expiring long-term contracts with Russia will long-term contracts with Russia will reduce the contractual minimum takereduce the contractual minimum takeor-pay levels for Russian imports and or-pay levels for Russian imports and enable greater diversity of supply.

No new gas supply contracts enable greater diversity of supply.

Impact: Around 30 bcm in additional Impact: Around 30 bcm in additional gas supply from non-Russian sources. gas supply from non-Russian sources.

Action 2

with Russia

Impact: Taking advantage of expiring No new gas supply contracts long-term contracts with Russia will Action 3 Action 3with Russia reduce the contractual minimum takeor-pay levels for Russian imports and Impact: Taking advantage of expiring enable greater diversity of supply. long-term contracts with Russia will Introduce minimum gas storage Introduce minimumminimum gas storage reduce the contractual takeobligations to enhance market obligations to enhance marketand or-pay levels for Russian imports resilience resilience enable greater diversity of supply.

Action 3 Action 3

Impact: Enhances the resilience of the Impact: Enhances the resilience of the gas system, although higher injection gas system, although higher injection requirements to refill storage in 2022 requirements to refill storage in 2022 will add to gas demand and prop up will add to gas demand and prop up gas prices. gas prices.

Introduce minimum gas storage obligations to enhance market Action Action 5 5resilience Introduce minimum gas storage Impact: Enhances the resilience of the obligations to enhance market gas system, although higher injection resilience Maximise to generation frominexisting requirements refill storage 2022 Maximise generation from existing dispatchable low-emissions will add to gas demand and prop up dispatchable low-emissions Impact: Enhances the resilience of the sources: bioenergy and nuclear gas prices. sources: bioenergy and gas system, although highernuclear injection

Action 5

Impact: An to additional 70 TWhinof2022 power requirements refill storage Impact: An additional 70 TWh of power generation existing dispatchable will add to gasfrom demand and prop up generation from existing dispatchable low emissions sources, reducing gas low emissions sources, reducing gas gas prices. use for electricity by 13 bcm. use for electricity by 13 bcm.

Action 5

Action Action 7 7Maximise generation from existing

20 | Baltic Transport Journal | 2/2022 dispatchable low-emissions

sources: bioenergy and nuclear Maximise generation from existing Speed up the replacement of gas

Replace Russian supplies with gas from alternative sources Impact: Around 30 bcm in additional

Replace Russian supplies with gas gas supply from non-Russian sources. from alternative sources

Action Action 4 4

Impact: Around 30 bcm in additional gas supply from non-Russian sources.

Accelerate the deployment of Accelerate the deployment of new wind and solar projects new wind and solar projects

Action Action

Impact: An additional 35 TWh of Impact: An additional 35 TWh of generation from new renewable from new renewable 4 generation projects over the next year, over and projects over the next year, over and above the already anticipated growth above the already anticipated growth from these sources, bringing down from these sources, bringing down use by 6 bcm. gas use by 6 bcm.

4 gas

Action Action 6 6

Accelerate the deployment of new wind and solar projects

Impact: An additional 35 TWh of Accelerate the deployment of generation from new renewable new wind and projects over thesolar next projects year, over and Enact short-term measures to above the already anticipated growth Enact short-term measures35 toTWh of Impact: An additional shelter vulnerable electricity from these sources, bringing down shelter vulnerable electricity generation from new renewable consumers gas usefrom by 6high bcm.prices consumers projectsfrom overhigh the prices next year, over and Impact: Brings energy bills for growth above thedown already anticipated Impact: Brings down energy bills for consumers even when natural gas from these sources, bringing down consumers even when natural gas prices remain high, making available gas use by 6 bcm. prices remain high, making available Action 6 up to EUR 200 billion to cushion up to EUR 200 billion to cushion impacts on vulnerable groups. impacts on vulnerable groups.

Action 6

Action Action 8 8

Enact short-term measures to shelter vulnerable electricity consumers from high prices Enact short-term measures to Accelerate energy efficiency

Action 3

Action 5 Action 5 Action 5

Action 7

Introduce minimum gas storage obligations to enhance market resilience Introduce minimum gas storage Impact: Enhances the resilience of the obligations to enhance market gas system, although higher injection resilience requirements to refill storage in 2022 Introduce minimum gas storage will add Enhances to gas and propofup Impact: the resilience the obligations todemand enhance market prices. although higher injection gas system, resilience requirements to refill storage in 2022 will add Enhances to gas demand and propofup Impact: the resilience the gas prices. system, although higher injection requirements to refill storage in 2022 will add to gas demand and prop up gas prices.

Maximise generation from existing dispatchable low-emissions sources: bioenergy and nuclear Maximise generation from existing Impact: An additional 70 TWh of power dispatchable low-emissions generation from existing dispatchable sources: bioenergy and nuclear low emissions sources, reducing gas Maximise generation from existing use for electricity by 13 Impact: An additional 70bcm.

TWh of power dispatchable low-emissions generation from existing dispatchable sources: bioenergy and nuclear low emissions sources, reducing gas use for electricity by 13 Impact: An additional 70bcm.

TWh of power generation from existing dispatchable low emissions sources, reducing gas use for electricity by 13 bcm.

Action 7 Action 7

Action 4

Action 6 Action 6 Action 6

Action 8 Action 8

Speed up the replacement of gas boilers with heat pumps Impact: Reduces gas use for heating Speed up the replacement of gasby an additional 2 bcm in one year. boilers with heat pumps

Action 8

Impact: Reduces gas use for heating Speed up the replacement of gasby an additional bcmpumps in one year. boilers with 2heat Impact: Reduces gas use for heating by an additional 2 bcm in one year.

Action 10

Action 9

Action 10

Action 9 Action 9

Encourage a temporary thermostat adjustment by consumers Encourage a temporary Impact: Turning down the by thermostat for thermostat adjustment buildings’ heating by 1°C would reduce consumers gas demand abytemporary some 10 bcm a year.

Encourage Impact: Turning down the by thermostat for thermostat adjustment buildings’ heating by 1°C would reduce consumers gas demand by some 10 bcm a year.

Impact: Turning down the thermostat for buildings’ heating by 1°C would reduce gas demand by some 10 bcm a year.

Source: International Energy Agency

Action 10

Accelerate the deployment of new wind and solar projects

CHART OF THE ISSUE

Impact: An additional 35 TWh of Accelerate the deployment of generation fromsolar new renewable new wind and projects projects over the next year, over and above the anticipated growth Impact: Analready additional 35 TWh of Accelerate the deployment of from these and sources, down generation fromsolar newbringing renewable new wind projects gas use by 6 bcm. projects over the next year, over and above anticipated growth Impact:the Analready additional 35 TWh of from these sources, down generation from newbringing renewable gas use by 6 bcm. projects over the next year, over and above the already anticipated growth from these sources, bringing down gas use by 6 bcm.

Enact short-term measures to shelter vulnerable electricity consumers from high prices Enact short-term measures to Impact: down electricity energy bills for shelter Brings vulnerable consumers when consumerseven from highnatural pricesgas prices high, measures making available Enact remain short-term to up to EUR 200 billion to cushion Impact: Brings down electricity energy bills for shelter vulnerable impacts on even vulnerable groups. consumers when natural consumers from high pricesgas prices remain high, making available up to EUR 200 billion to cushion Impact: Brings down energy bills for impacts on even vulnerable consumers when groups. natural gas prices remain high, making available up to EUR 200 billion to cushion impacts on vulnerable groups.

Accelerate energy efficiency improvements in buildings and industry Accelerate energy efficiency Impact: Reducesin gas consumption improvements buildings and for heat by close to an additional 2 bcm industry within a year,energy lowering energy bills, Accelerate efficiency enhancing comfort and boosting Impact: Reduces gas consumption improvements in buildings and for industrial competitiveness. heat by close to an additional 2 bcm industry

within a year, lowering energy bills, enhancing comfort and boosting for Impact: Reduces gas consumption industrial competitiveness. heat by close to an additional 2 bcm within a year, lowering energy bills, enhancing comfort and boosting industrial competitiveness.

Step up efforts to diversify and decarbonise sources of power system flexibility Step up efforts to diversify and Impact: A major near-term push on decarbonise sources of power innovation can, over time, loosen the system flexibility strong links between natural gas supply Step up efforts to diversify and and Europe’s electricity security.

Impact: A major near-term push on decarbonise sources of power Real-time electricity innovation can, over price time, signals loosen can the system flexibility

unlock morebetween flexible demand, in turn strong links natural gas supply reducing andsecurity. gas-intensive and Europe’s electricity Impact: Aexpensive major near-term push on peak supply needs.

Real-time electricity innovation can, over price time, signals loosen can the unlock morebetween flexible demand, in turn strong links natural gas supply reducing expensive andsecurity. gas-intensive and Europe’s electricity peak supply needs. price signals can Real-time electricity unlock more flexible demand, in turn reducing expensive and gas-intensive peak supply needs.

2/2022 | Baltic Transport Journal | 21

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Świnoujście

Efficient & Reliable Transport Solutions between Germany, Poland, Lithuania and Sweden www.ttline.com/en/freight

ECONOMY

The impact of the Russian aggression on Ukraine on transportation

War & logistics

by Przemysław Myszka In all likelihood, the barbaric attack against Ukraine launched by the Kremlin on 24 February 2022, with Minsk’s willing complicity, will be remembered in schoolbooks as a defining moment for the entire world.

The point of no return, if you will. As the Ukrainians and Ukrainian Foreign Legion are successfully fending off the aggressors, albeit at a devastating cost due to war crimes committed by the Russian army and their henchman, everyday and industrial activities are taking a hit, too, including the world of transport & logistics.

Here is our round-up of the industry-related actions and events triggered by the aggression.

Shipping The Norwegian-Swedish ro-ro and car carrier Wallenius Wilhelmsen was one of the first to react. On the day of the aggression, the company suspended all operations in Russia and Belarus. The shipping line halted bookings and rerouted Russiabound cargo to other ports.

Other carriers also stopped taking in bookings for Russia and Belarus while suspending calls to Ukrainian seaports. These include CMA CGM, Evergreen, Hapag-Lloyd, Maersk, MSC, and ZIM on the container side (though there was no announcement of CMA CGM dropping its co-op with the Russian FESCO; e.g., the East Russia Express, incl. calling the port in Vladivostok, is still included in the company’s Line Schedule); the vehicle carrier Höegh Autoliners; and the ro-ro & ferry line Finnlines. Pre-war booked shipments continued, with the exclusion of sanctioned items. Forwarding goods that aren’t on the sanction list, such as pharmaceuticals, is still allowed. That said, it might become difficult to ship them given the lack of haulage services, let alone to buy medical equipment and drugs, since the purchasing power of the rouble has nosedived. On that note, the Russian Ministry of Health said (week 21-27 of March 2022) that the country is stockpiled for three to 12 months and is looking for alternative supply sources, meaning India and China. Accordingly, the Indian and Chinese sellers are ramping up prices to capitalise on Russia’s no-other-option-insight situation.

Container-wise, COSCO Shipping Lines (CSL), the world’s fourth in terms of TEU

capacity, is throwing Russians a life belt, not having suspended calls to the country’s seaports (and COSCO Shipping Tanker continues to transport Russian crude oil).

However, CSL ceased taking bookings for Ukraine at the end of February, redirecting its ships to other harbours (more about Ukrainian ports later). Box carriers also waived several fees, like detention and demurrage, and offered to take Ukrainebound shipments to other seaports, such as Constanța and Piraeus.

“The leading sea carriers state that storage areas in hubs are already very full, while the war in Ukraine is creating additional problems apart from the existing disruptions in the global supply chain. Please note that a company acting as consignor or consignee, or being a holder of the Bill of Lading, or acting on behalf of such persons in accordance with the line carrier’s Terms & Conditions has the status of Merchant, i.e. bears all risks concerning cargo transportation to the sea carrier,” notes the Ukrainian, Odesa-based Interlegal law firm, specialising in transport, shipping, and international trade.

Shipping lines are also helping to channel humanitarian aid towards Ukraine. Several Baltic ferry lines – including Finnlines, Polferries, Scandlines, Stena Line, and Unity Line – have started offering complimentary services, transporting the Ukrainians fleeing the country or those going back to fight against the Kremlin’s aggression. Along with other transport firms, they are also organising various forms of help – crowdfunding to

support NGOs and gathering supplies for the hundreds of thousands of refugees and those internally displaced.

This grassroots movement has amassed millions of euros and truckloads of humanitarian supplies in just days. For example, the CMA CGM Group put in motion its airfreight division, at no cost, flying 55t of electrical equipment, emergency shelters, IT and telecoms devices, and food from Paris to Warsaw. The Danish DFDS has given DKK1.0m to the country’s Red Cross to support emergency efforts in Ukraine, following up with an internal fundraiser that sees the company match each crown donated with two. Many other companies, big and small, are doing what they can to assist. The help goes on, and donations to charities wouldn’t be possible without mobilising logistics capabilities (importantly also warehouses, e.g., the French multinational GEODIS).

It is also worth mentioning that customs clearance companies voluntarily provide aid with the necessary paperwork (crucial if we are talking about shipments from outside the EU, like UK donations). Some have even chosen to engage in specific, targeted assistance like the Polish Register of Shipping and Polferries.

The two have purchased, pre-charged, and sent to Ukraine power banks, as having a working mobile can save lives. Phones are also instrumental in gathering intelligence (in light of the full-fledged information war) or footage of atrocities (because the International Criminal Court is already investigating war crimes).

2/2022 | Baltic Transport Journal | 23

ECONOMY Ports Operations at Ukrainian seaports have come to a standstill. The 21mt/year capacity Mariupol – among others, home to Illich Steel and Iron Works, Ukraine’s second-biggest – has been under constant, indiscriminate bombardment by the Russians. Odesa, the country’s prime commercial seaport (40mt/year of capacity), ceased operations, with the city’s defence preparing to ward off the enemy landing.

The German HHLA, operator of Odesa’s container terminal (since 2001), has closed its facility and provided shelter for their employees (480 together with families – transporting the refugees to Hamburg via Romania).

HHLA’s personnel in Germany offered asylum and served as contacts and chaperones for bureaucratic procedures. The HHLA Executive Board had also decided to pay employees their monthly salaries in advance so that they could stockpile goods. Torben Seebold, the company’s Labour Director, said, “We stand together as HHLA family to take a common stance of solidarity and humanity. During this time, our thoughts are particularly with the employees who remained in Odesa and who are looking after security at the terminal or who have been called to military duty.” Like DFDS, HHLA has opened its pockets: €1.0m in donations to provide humanitarian and medical assistance, plus its employees a further €60k (as of 24 March 2022). Additionally, HHLA’s Hamburg terminals stopped handling containers coming from or destined for Russia as of 1 March 2022 (in 2020, these totted up to 229k TEUs).

Combined with the booking ban imposed by container lines, one can speculate how the sanctions brought forward by the EU, US, and others will impact Russian container traffic – in the Baltic in our case. Last year, the country’s ports in the region took care of 2.51m TEUs: St. Petersburg – 2.04m, Kaliningrad – 437k, and Ust-Luga – 29k. Early reports spoke of the container carriers that imposed the bans as being responsible for over 50% of the traffic.

Russian Baltic seaports feed the country’s two largest consumer centres, the Leningrad and Moscow Oblasts. They also handle the supply & demand of the Kaluga Oblast, one of Russia’s most economically advanced territories, where many international corporations have decided to settle (Berlin-Chemie/ Menarini, Citroën, Continental, GE, Mitsubishi, Novo Nordisk, Peugeot, Samsung, Volkswagen, and Volvo to name a few). These multinationals are either exiting the Russian market altogether or discontinuing production. Their decision will trickle down the supply chain, affecting the local workforce and subcontractors. Many other companies are also putting up the shutters (among them, major cargo owners like IKEA).

24 | Baltic Transport Journal | 2/2022

A list prepared by the Yale Chief Executive Leadership Institute (10 March 2022) specifies 325 entities, including the world’s Top 10 by revenue. “By Feb 28, only several dozen companies had announced their departure from the country. However, as public pressure continues to mount, that number has since skyrocketed as many companies feared the effect continuing to do business with Russia would have on their corporate image.

Alongside the aforementioned sanctions, reversing three decades of investment has had a significant impact on Russia’s economy,” reads Investopedia’s Nearly 330 Companies Have Withdrawn From Russia. Their decisions affected existing assets, physical and digital, and future investments, especially those oil & gas-related, as Russia lacks the know-how and technology for manufacturing equipment needed for deep extraction/mining. It is worth reading such lists the other way around by ‘finding’ companies that have decided to stay and bank on filling the vacuum.

One can also be sceptical about alternatives, particularly the New Silk Road (NSR). In 2021, China-Europe container rail traffic summed up to 1.46m TEUs, already encountering problems with capacity and delays. Next, the NSR wasn’t meant to facilitate China’s trade with Russia, by far less significant than that with

the EU ($84.2b vs $573b in 2018). The sanctions imposed by Western economies also target Russian and Belarusian railways and their affiliates. While European buyers mainly contract their Chinese partners, who then arrange the logistics, including the procurement of the rail leg to the EU border, NSR traffic has decreased in the wake of the Russian aggression (leading to faster transit times, as bottlenecks clear, for those still taking the Eurasian Land Bridge). Companies are wary of having to do anything, in- or directly, with those whose assets and infrastructure have been used to prepare and propel the aggression. Some simply deem it morally wrong to continue using rail services the Russians and their accomplices from Belarus offer.

At the same time, there are rail alternatives for European companies along the NSR, though significantly limited. Nevertheless, there are parties already exploring the options.

For instance, the Finnish Nurminen Logistics and Kazakhstan Temir Zholy (KTZ; the country’s national railroad haulier) partnered in mid-March 2022 to trial rail shipments along the Middle Corridor. The two plan to run trials in April-June 2022, sending China-Europe train sets via Kazakhstan, Azerbaijan, and Georgia. If successful, the companies intend to establish a commercial offering till September

Fig. 1. The EU and UK’s crude oil imports (2020)

Fig. 2. Russia supplies one-quarter of the EU’s crude oil imports

Source for figs. 1-2: Transport & Environment

ECONOMY

Photos: Canva

2022. In addition, Nurminen Logistics and KTZ will cooperate on the former’s ChinaFinland services. Specifically, they want to use Kazakhstan-registered & owned wagons to avoid falling under sanctions imposed on Russian rail companies.

That said, the Middle Corridor is constrained by having to transship the cargo onto vessels crossing the Caspian and Black seas, not to mention the recent reports that sea mines are drifting in the latter and heading towards the EU’s shores. However, going over the Black Sea can be avoided, too (especially as the Russian naval forces fired at merchant ships, hitting Banglar Samriddhi near the Ukrainian Port of Mykolaiv on 2 March 2022, killing one crew member and forcing others to abandon the vessel; earlier, the Estonian freighter Helt was used by the Russians as a floating human shield near Odesa, with the vessel sinking after a mine explosion). The Dutch Nunner and the Chinese Tiedada have set up a Middle Corridor connection that goes via Georgia to Istanbul for transhipment onto a vessel going to the Port of Trieste, from which it is distributed to Duisburg. Speaking of the German dry port, duisport has taken the decision to get rid of its interests in Belarus: 0.59% stake in a development company behind the Great Stone Industrial Park (a major Chinese investment in the country) and 38.9% in Eurasian Rail Gateway (a bimodal terminal).

On the whole, one can just wonder what the Chinese are thinking about the Kremlin jeopardising the NSR. After all, local authorities have greatly invested in linking their cities and regions with Europe. Farther Asia-Europe connectivity has already been compromised.

The war has resulted in withholding Vietnam’s link with Belgium (the Vietnamese Ratraco was about to launch a second service to Liège

– from Da Nang on behalf of IKEA). Maersk’s ban includes rail services; the company’s AE19 routed cargoes from several Chinese, Japanese, and South Korean ports via Vostochny for rail forwarding to St. Petersburg. The connection in question has been set up in co-op with Global Ports; Maersk’s landside arm, APM Terminals, has decided to divest its stake (30.75%) in the Russian terminal operating company (which runs several sea and inland facilities in the Baltic).

Although important, the container business in Russia is almost nothing compared to the country’s oil & gas industry. Exports of liquid hydrocarbons tot up to one-third of the Russian budget. Banning the purchase of Russian oil & gas (and coal, too) would seriously add insult to injury. In the Baltic alone, bulk goods accounted for 81% of the country’s port turnover last year (135mt of liquid and 75mt of dry bulk, respectively).

Depending on an economy’s exposure to Russia’s hydrocarbons and its capacity to change the supplier, some find it easier and others more challenging to opt for the cut-off.

For instance, the Finnish Neste has severed its crude oil imports virtually overnight. Orlen Lietuva, the Lithuanian subsidiary of the Polish oil & gas Orlen that runs a refinery in Mažeikiai, has said it too would stop importing Russian crude oil. Poland can replace pipeline gas, getting its demand through the under-upgrade LNG terminal in Świnoujście, the Baltic Pipe (gas from Norway via Denmark), and domestic production. Polish seaports also have the wiggle room to take in more liquids. Lithuania has come to a decision to buy the floating storage and regasification unit Independence until recently chartered (and later, all three Baltic States proclaimed a cut-off from Russian gas, encouraging others to follow in their footsteps).

On the other hand, it will be more difficult for Germany to disconnect. For example, Rosneft is responsible for about 12% of the German crude oil refining market. At the same time, Gazprom owns the LNG storages, with record low utilisation ahead of the aggression, probably meant to be used as a political bogey. However, the government in Berlin has decided to scrap Germany’s existing policy towards Russia.

The pivot will see the erection of two LNG terminals on the North Sea coast: in Brunsbüttel and Wilhelmshaven. Interestingly, the Germans want to feed two birds with one scone by designing the new facilities so they can also handle green hydrogen and its derivatives, such as ammonia. Markus Krebber, RWE’s CEO, said in this regard, “It is now more important than ever to think of climate protection and security of supply as one.” Alongside the Dutch Gasunie and Germany’s state-owned investment and development bank KfW, his company will work on the 8.0b m3/year LNG terminal in Brunsbüttel and the adjacent hydrogen-ammonia facility (initially 300kt/year of ammonia imports as of 2026, up to 2.0mt/year after expansion).

In early March 2022, Tree Energy Solutions (TES), founded by the Belgian investment company AtlasInvest, announced it would accelerate the set-up of its facility in Wilhelmshaven. Once fully commissioned, it could cover 10% of Germany’s energy demand.

The 25 TWh of yearly capacity Phase 1 is to be ready by winter 2025, making it possible to import & produce 0.5mt of hydrogen. The fullscale Wilhelmshaven Green Gas Terminal will comprise six tanks and six berths. Its capacity will rise to 250 TWh/5.0mt of hydrogen by 2045. TES intends to produce green hydrogen in countries with a renewable power mix and 2/2022 | Baltic Transport Journal | 25

ECONOMY combine it with CO2 to create an energy carrier transported to Wilhelmshaven by a purposebuilt fleet. The ‘load’ will be converted back to hydrogen in the German port, with the CO2 captured for reuse in a closed-loop productiontransportation system.

In the meantime, apparently not wanting to wait for the outcome of cabinets’ calculations on the closure of EU ports for Russian vessels, several grassroots/activist movements have decided to step in. For instance, The Guardian has reported on dockworkers at the Ellesmere Port refinery in Cheshire refusing to unload Russian oil, joining their union fellows from Kent, whose actions diverted a Russian gas tanker. “The government must act immediately to […] stop Russian goods continuing to arrive in the UK under the cover of another country,” urged Matt Lay, National Officer for Energy at the Unison labour union. Such means are undertaken to counter the imperfection of a law, which would allow for the uninterrupted handling of Russian oil & gas. Niek Stam, FNV Havens’ Spokesperson (the largest Dutch dockworkers’ union), said after port workers in Rotterdam refused to handle Russian hydrocarbons, “There is blood on this oil, blood on this coal and blood on the gas.” Labour unions are preparing to tackle legal claims from oil companies and shippers following the boycott.

The law is in the making, but the UK has even taken action to allow detaining Russian ships.

Canada has banned such vessels from entering its waters. Unionists from the US West Coast dockers union ILWU have said their members won’t handle Russian tonnage.

Similarly, the Swedish Dockworkers Union has given prior notice to the employers’ organisation Ports of Sweden that industrial action will be taken against vessels going to and from Russia, likewise Russian cargo in Swedish harbours. Iceland has revoked the derogation for Russian vessels catching redfish, prohibiting the entry of these ships into Icelandic ports.

At the same time, Greenpeace activists have blocked Rosneft’s refinery in Schwedt, confronted oil tankers from Russia in the Baltic Sea, and launched a Twitter service that tracks Russian tankers. Greenpeace Nordic’s Executive Director, Mads Flarup Christensen, commented, “While people suffer in Ukraine and people in Russia take to the streets pleading for peace, Putin’s oil and gas is still arriving at

European ports, contributing to his war chest.

Supertankers crossing our seas with Russian oil and gas are still delivering fossils to Europe. If we want to stand for peace, we must stop this and urgently get off oil and gas.” He furthered, “This war is, as so many wars before it, funded and fuelled by fossil fuels. To end this, we must end the dependency on oil, gas and coal. We have the solutions, all we need is the political will to rapidly switch to peaceful sustainable renewable energy. This will not only create jobs, lower energy bills, and tackle the climate crisis, it will also cut our dependence on imported fossil fuels, fuelling conflicts in the world.”

According to another NGO, Transport & Environment (T&E), Europe still spends up to $285m/day on Russian oil. On 3 March 2022, the International Energy Agency (IEA) published A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas. The Agency wrote, “The 10-Point Plan is consistent with the EU’s climate ambitions and the European Green Deal and also points towards the outcomes achieved in the IEA Net Zero Emissions by 2050 Roadmap, in which the EU totally eliminates the need for Russian gas imports before 2030.” William Todts, T&E’s Executive Director, tallied by saying, “[…] we should not simply swap Russian oil for Saudi oil.

It’s time to greatly improve transport efficiency and turbocharge the electrification of transport to drive down our oil consumption. […] The EU must rewrite its energy security strategy to include oil. […] Any energy security strategy that ignores oil isn’t worth the paper it is written on.”

The European Commission (COM) has unveiled its proposals to cut the block’s reliance on Russian gas by two-thirds – as quickly as by 2022-end – towards complete independence. The REPowerEU plan assumes boosting energy production from renewables (extra 80 GW to the 900 GW of wind and solar by 2030) and quadrupling the current 2030 targets for green hydrogen supplies (15mt atop the 5.6mt).

Various clean energy associations have welcomed the COM’s proposal. In the words of Frans Timmermans, the COM’s EVP for the European Green Deal and European Commissioner for Climate Action, “It’s hard, bloody hard. But it’s possible.”

Russia’s aggression also threatens the agricultural industry, particularly the grain

and vegetable oil markets. In the record marketing year of 2021-2022, Ukraine has produced 107mt of grains, legumes, and plant oils (the country is the world’s biggest producer of sunflower oil and a major exporter of canola oil). Out of the 84mt of grains and legumes, some 60mt were exported – 95% through seaports. The country’s rail system doesn’t have the means to compensate for the closure of Ukrainian harbours.

Next, while the winter sowing went according to the plan (including a 40% year-on-year increase in canola acreage), 52%, 43%, and 32% of wheat, barley, and canola crops are at risk of wastage. Spring sowing is also at risk – because of direct military action and the lack of fertilisers and fuel. Experts from Green Square Agro Consulting say that the sowing acreage can be lower by 48% for barley, 44% for sunflower, 36% for corn, and 24% for soy in the worst-case scenario. As such, wheat harvest can go down from the expected prewar of 27.3mt to 18.6-9.6mt (the lower range would be the lowest in 20 years; Ukraine’s internal demand for wheat accounts for some 7.0mt). Barley harvest can drop as low as 1.4mt (domestic demand: 3.8mt).

Axed crops and no exports would seriously impact Ukraine’s budget. The country’s agricultural goods were mostly shipped to the Middle East and Africa. Russian aggression may result in starvation in the afflicted countries (the EU and US have announced they will help nations if they face problems with food supplies). For example, Benin and Somalia are 100%-dependent on Russian and Ukrainian grains, and insider knowledge speaks of probability bordering on certainty that civil war will break out if supplies won’t be delivered before autumn. Meanwhile, Russia, the world’s largest exporter of wheat, is hoarding its crops, further adding instability and enhancing wheat prices. More precisely, the Russian regions are holding on to their stocks (e.g., no domestic sugar exports from Stavropol Krai), seemingly putting the interest of their people ahead of the Kremlin’s. On top of that, the National News Agency of Ukraine has cited the authorities of the Zaporizhzhia Oblast that Russians have stolen five dry bulk carriers loaded with tens of thousands of tonnes of Ukrainian grain from the Port of Berdyansk.

Other The suite of sanctions imposed on Russia and Belarus by Ukraine’s allies has hit other branches of the transport & logistics business.

The Russian Maritime Register of Shipping (RMRS), among others, has been proscribed.

The country’s class has also been ejected from 26 | Baltic Transport Journal | 2/2022

the International Association of Classification Societies. The American Bureau of Shipping (ABS), DNV, and Lloyd’s Register have cut their ties with Russia, ceasing to provide services to Russian-owned, -controlled, and -managed assets. The European Council has

restricted the export of maritime navigation goods and radio communication technology to Russia and subjected RMRS to financial restrictions. Without classification and certification, it will become infeasible to operate Russian tonnage.

ECONOMY

While numerous organisations worldwide have already severed their ties with Russia, storm clouds have begun thickening over the head of Young Tae Kim, Secretary-General of the International Transport Forum (ITF), an agenda of the Organisation for Economic Co-operation and Development (OECD).

The Ukrainians have asked ITF to suspend Russia’s membership. ITF’s Secretary-General has played ostrich in response, saying that rules do not allow for such action. The situation has been left hanging (since Februaryend 2022) until an extraordinary meeting of ITF’s Transport Management Board on 4 May 2022, with the agenda including items such as possible crisis response measures to the Russian invasion of Ukraine and the legal and practical mechanisms to implement those.

This inaction has prompted criticism of the Secretary-General, faulting him for the lack of leadership, strategy, and political sensitivity, not to mention putting ITF’s good name at risk. It has also led certain members, among others Latvia, to threaten to walk out on the OECD’s agenda altogether and set up an alternative. ITF’s stance is puzzling; OECD itself was quick to react by condemning the Russian aggression and ruling out any involvement with Russia. The ITF faces now serious reputational damage and possible organisational turmoil. All of this is deeply unfortunate as the organisation has put much insightful effort into surfacing, e.g., the negative consequences of market consolidation across the container shipping business.

Sanctions also target the country’s shipbuilding and repair industries, meaning finishing the under construction and starting new projects may be impossible. Moreover, the Dutch Damen Shipyards has decided

not to deliver the Russian vessels they have in the pipeline – despite this action taking a significant toll on the company’s bottom line. Clarksons has reported that it concerns five tugboats for Rosatom (due for delivery this October) and several workboats and trawlers in the order book.

Russia’s attack has also made it difficult for ships to change crews, with approximately 15% of the global 1.89m seafarers being of Russian (198k) and Ukrainian (76.4k) nationalities. Wilfred Lemmens, Managing Director of the Royal Belgian Shipowners’ Association (RBSA), commented, “It will be a major challenge to find sufficient seafarers worldwide if the war continues. That could cause a huge disruption to the entire global maritime transport.” RBSA also quoted Oleg Grygoriuk, President of the Ukrainian trade union for maritime transport workers, that 55-60% of Ukrainian seafarers are currently at sea, wanting to go back to take care of their closest ones and take up arms.

“Meanwhile, the growing isolation of Russia makes it increasingly difficult – if not impossible – to pay the wages of the Russian seafarers, due to the severe restrictions to the country’s access to Swift, the main international payment system. At the same time, it is becoming harder to get them to where they are needed, due to the closure of many air connections to and from Russia,” RBSA also highlighted. Reports speak of at least 140 vessels located in Ukrainian waters, with an estimated 1,000 seafarers aboard. Some were successfully evacuated, like the Filipino crew of the oil tanker MTM Rio Grande (left stranded off the Ukrainian Nika-Tera Port).

Lastly, line and point infrastructure is being destroyed. It is mainly done through

Russian shelling, now in a cost-imposing strategy of massive destruction after the lightning onslaught-turned-fiasco. At the same time, Ukrainians are blowing up bridges and flyovers to inhibit the movement of the enemy forces. It will take billions and billions of dollars and euros to rebuild the country. Cynthia Cook, Director, DefenseIndustrial Initiatives Group and Senior Fellow, International Security Program at the Center for Strategic & International Studies, said in this regard, “It is difficult to talk about recovery while civilians are still under attack, while hospitals are being bombed, and where cities have lost power and water, but thinking about recovery means envisioning a post-conflict future, and that links to the twin messages of hope and the necessity to keep fighting.”

Ukraine’s recovery won’t be just ‘build back better’ – it will be of strategic, geopolitical importance, not to mention an act of humanitarian aid not seen in Europe since the end of WWII (think of the millions of refugees and traumatised). “Ugly attacks continue almost without ceasing, and the pictures of the devastation are heartbreaking. We can hope that it is darkest before dawn, that soon the violence will cease, and that Ukraine will continue to exist as an independent and democratic nation embarking on an inspiring and effective national recovery,” Cook summarised her thoughts on the country’s future.

There are also voices pointing out that postwar Ukraine might to a large extent replace Russia as the EU’s economic partner, given the country’s vast and largely untapped resources.

Trading with a free and democratic nation instead of brokering deals with a murderous regime should be a no-brainer.

2/2022 | Baltic Transport Journal | 27

Can LNG replace Russian gas in Europe?

The great cut-off

by Ed Cox, Head of Global LNG, Independent Commodity Intelligence Services (ICIS) European liquefied natural gas (LNG) imports reached a record high in January 2022 and could go a little higher if the Russian pipeline gas supply falls – or even stops completely. But Europe’s best-connected LNG terminals are already running at high rates. Also, limits to cross-border pipeline gas capacity would restrict the wider benefit of higher imports into some countries, such as Spain. For LNG to take a much greater structural share of the European gas mix, additional import infrastructure is likely required, such as the renewed plans for German import terminals (in Brunsbüttel and Wilhelmshaven).

E

xpansion of existing LNG terminals is another option.

The Dutch Gate and Belgian Zeebrugge terminals will have expanded by 2024: up to 13.5b m 3/year and 15.4b m 3/year, respectively (the latter up to 17.2b m 3/year in 2026). The enlarged (8.3b m 3/year) Polish terminal in Świnoujście will come online in 2023. But neither of these options gives an immediate solution to any major shortage of gas – and more capacity does not necessarily lead to more supply. Much of the LNG into Europe is supplied on a f lexible basis and will f low to other parts of the world unless European prices are attractive.

One way around this is to sign contracts for firm LNG delivery to guarantee volumes. But this may come at a premium price and limit buyer f lexibility – as and when European gas demand falls. All this is without considering the prominent role 28 | Baltic Transport Journal | 2/2022

that Russian LNG into Europe has come to play alongside Russia’s pipe gas.

Even at maximum levels LNG’s share in the European gas supply mix has fluctuated widely in recent years – at times as low as 7%, but in January 2022, it reached a record high of 32%.

European LNG imports reached a record high of 9.53mt in January this year, according to ICIS LNG Edge data, with the following February volumes (8.14mt) the second-highest monthly ever.

On the surface, there is plenty of capacity available to bring more LNG into Europe. European LNG terminal utilisation (excluding Turkey) stands at 67% over the year to date. While this is well below maximum rates, it is strongly up from the last 12-month average of 49%.

More LNG has come to European terminals, with lower Russian pipe gas in recent months and high European gas

prices, especially from the US. Total operational European LNG import capacity stands at just over 156mt/year, which equals 13mt/month – almost 3.5mt or 36% more than was delivered in January 2022. A 100% LNG terminal utilisation figure would have taken LNG’s share to 40% of the January-European gas supply mix if other supply remained unchanged.

In other words, even at maximum levels, it would not come close to replacing Russia’s pipe gas share. But 100% utilisation will never be achieved. Several key import terminals in Northwest Europe have already been running at maximum rates this year, including the Dutch Gate, French Montoir-de-Bretagne, Belgian Zeebrugge, and UK Dragon terminals.

Those that could bring in more LNG are in many cases not well connected to the broader European gas market, which would limit the benefit of additional LNG imports. Five of the terminals with the

ECONOMY Fig. 1. Key LNG suppliers to Europe in 2021

Fig. 2. European LNG imports break record Tonnes of LNG imported

% share of LNG in European gas mix

10,000,000

35

7%

30 17%

8,000,000 Russia

13%

25

Qatar

6,000,000

US 10%

20

Algieria 19%

15

4,000,000

Nigeria

10

Other 2,000,000

5

24%

0

0 2016

Source for all figs.: ICIS LNG Edge

2017

2018 Europe’s LNG imports

2019 2020 2021 Share of LNG in Europe’s supply mix

2022

Fig. 3. Europe’s varied LNG utilisation Mtpa capacity

Year-to-date %utilisation

50

140 120

40 100 30

80 60

20

40 10 20 0

0

Spain

UK

France

Italy

Netherlands

Belgium

Greece

Total LNG impact capacity

Portugal

Poland

Lithuania

Croatia

Malta

Year-to-date % utilisation

Fig. 4. Source of European gas Million cubic meters 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

Jan 2021

Feb

Mar

Apr Russia

lowest utilisation this year are in Spain, which has the largest LNG import capacity in Europe. Spain can only export pipeline gas to France, with the maximum daily f low rate of 20m m 3 (typically about the daily maximum send-out from just one LNG terminal). So Spanish LNG does not have a major route into the higher gas demand centres of Northwestern Europe.

Spain could, however, hold more LNG in tank, which could then be reloaded and taken to other terminals in Europe.

Embedded?

Within the LNG import figures, Russia now holds a greater share after

May Norway

Jun TAP

Jul LNG Send-out

Aug

Sep

Domestic production

the start of the Yamal LNG export plant in 2017 (majority-owned by Russia’s Novatek, with France’s TotalEnergies and China’s CNPC and the Silk Road Fund also holding equity). Last year, Russian LNG was the third-largest supplier into Europe, behind the US and Qatar. Just over 18% of Europe’s LNG was supplied from Yamal in 2021. While Russian pipeline gas volumes have fallen, this

Nov

Oct

Doc

Jan 2022

North Africa

has, in effect, been offset by strong LNG exports from the country. This again emphasises the extent to which Russian energy is embedded in the European market.

Qatar will expand its LNG production strongly in the 2020s. New projects are expected to boost US LNG production, too. Yet, global LNG production growth is limited in the next two to three years.

ICIS – Independent Commodity Intelligence Services – connects data, markets and customers to create a comprehensive and trusted view of global commodities markets, enabling smarter business decisions that help optimise the world’s resources. Visit www.icis.com to learn more.

2/2022 | Baltic Transport Journal | 29

The why’s and do’s of circular economy

Going around in circles?

by Ewa Kochańska The DHL white paper Delivering on Circularity takes an in-depth look at a transition from a linear to a circular economic model in the fashion and consumer electronics sectors in the context of reducing waste and greenhouse gas emissions (GHG-E). The report calls for innovative logistics and cooperation between manufacturers and consumers to drive the transition alongside the 5 Rs: reduce, repair, resell, refurbish, and recycle. The authors list specific steps and tools for redesigning global supply chains to accommodate circularity and its net-zero potential.

T

he current linear paradigm evolves around the produce-sell-use-waste scheme, where manufacturers focus on producing, brands and companies on selling, and the product is bought, used and disposed of by the consumer, generating unnecessary waste and emissions. The circular economic model helps minimise resource consumption during production, lengthen the product lifecycle, and recycle products and materials.

The circular model works as long as stakeholders work towards a responsible and profitable utilisation of resources; the manufacturers and users strive to recycle products for future use as either materials or second-hand items, while the logistics sector provides necessary data and orchestrates the flow of goods.

Therefore, to move from a linear supply chain to a closed-loop or circular model, volumes of production and materials, along with the lifecycle of products, must be optimised, and new models for product use and end-oflife recycling must be developed. This type of change, which is much more cost-effective than any other decarbonisation approach, could eliminate up to 40% of emissions.

The damage Since the fashion industry produces between 4% to 8% of GHG-E and consumer electronics about 2%, combined, they emit twice as much as the aviation industry (3%). “At current consumption levels and under current approaches to managing the lifecycles of these products, emissions from these industries would grow by 60% until 2030 and account for around 20% of the UN GHG emissions target for 2030, which is set at half of today’s emissions,” states the report.

Concerning natural resources, the current linear production and consumption models cause significant damage, particularly when it comes to exploiting non-renewable resources.

In the production of consumer electronics, a large number of metals, including rare earths, are required. One of the main culprits in the fashion industry is synthetics, such as polyester, 30 | Baltic Transport Journal | 2/2022

which are often produced using fossil fuels.

Land usage and water consumption are also devastating – the fashion industry requires 40 million hectares, mainly for cotton farming, and 150 trillion litres of water annually.

Production processes in fashion also pollute water when chemicals leak into freshwater.

Similarly, improperly disposed electronic products end up in landfills where chemicals and metals used for production contaminate water, air, and soil. This is in addition to the environmental impacts during resource extraction, production, and transportation. Waste at the end of product lifetime is also a major challenge for both industries. Electronic waste is the fastest growing waste globally, with 80% not being recycled. Some 75% of fashion-product-waste ends up either in landfills or is incinerated, causing more emissions.

These high levels of waste, as well as raw material extraction and production, have an adverse effect on workers involved in the manufacturing and waste processes. In consumer electronics, for example, the needed raw materials are often extracted in dangerous conditions – in mines, where contact with toxic material and the threat of mine collapse are ever-present. Improperly discarded electronic waste also poses a risk to workers in the waste processing sector.

The five commandments of circularity Recycling raw materials in fashion and consumer electronics is especially key because most of their GHG-E are generated during the extraction and production of raw materials. For the fashion industry, the production phase is responsible for 71% of carbon emissions while product use, e.g. garment washing, for 20%. In electronics, the production phase of smartphones is responsible for 80% of emissions, and 15% of emissions are produced during use, e.g., charging. Considering that manufacturing is so damaging in these sectors, extending the usage and inserting the product value back into production are vital to reducing environmental damage.

The 5Rs will be key to achieving these goals.

Reduce in circularity refers to the productions phase, particularly reduction in volumes.

Overproduction is especially present in the fashion industry, keeping at 20% to 30%.

Repair calls for fixing instead of disposing of damaged products to extend the lifecycle.

Resell pertains to consumers selling their product they no longer want but is still usable.

In the fashion and electronics sector, reselling is still at lower rates than in other industries, such as automotive. Refurbish is about users returning products to the manufacturer, who then checks, enhances, refreshes, and sells them again. Refurbishing in electronics is nothing new but has become more common in recent years. Refurbishment in fashion is rare, except for some rental platforms for high priced luxury items. The last step, recycle, comes only after the product is no longer viable. Such items still have value for the manufacturer, namely their parts and materials that can be used in another production cycle. In fashion, recycling is almost non-existent, with 95% of products being manufactured from virgin materials. Only recently, some retailers started offering take-back programmes often in exchange for coupons or vouchers.

Circular-ready The consumer goods chain includes many stakeholders such as producers, consumers, regulators, and shippers – and they all play a part in implementing circularity.

Cooperation will be crucial for the transition to benefit all the groups, likewise the society and the environment. The report identifies three core enablers and ten building blocks that help achieve circularity and its goals.

The first one is circular consumer behaviour, where the customers return products to the manufacturer. This behaviour is critical because that is the only way the producer can reuse the product for parts or resell/ refurbish. Additionally, it sends a message to companies and brands that consumers do indeed want and expect the switch from a linear to a circular economic model.

ECONOMY Fig. 1. Linear vs circular product lifecycle

Value Product

Repair

Resell

Parts

Materials

Circular economy

Refurbish

Reduce

Recycle

End of life

Lifetime

Waste Linear economy Source for all figs.: DHL’s Delivering on Circularity

Sustainability has caught on in recent years, especially among the younger generations, but there’s a critical difference between social media trends and actual willingness to sacrifice. Certainly, at least at the beginning of the switch, the product price points will be higher. “Bridging the gap between attitudes and actual behaviours is the key […] and it depends on, among other things, [… offering attractive consumer incentives, […] providing a conducive public-sector environment and regulatory guardrails, and [… offering smart logistics solutions,” points out the report. Some industry leaders have already started product-collection incentives, such as vouchers and discounts on replacement products, and making the return of used items as simple as possible.

The second enabler is the circular supply chain. The current supply chains must be redesigned, and new supply models need to be introduced. The challenges of economic circularity include accessing the end-of-life or unused products to redeposit them into the supply cycle and a thoughtful design of the supply chain. With the return programmes and incentives mentioned above, the process is starting already, but the returns need to be optimally merged with the existing supply chain. For instance, when it comes to sorting returned items into the type that can be refurbished and the type that has to be recycled – when and where that should be done is significant, e.g., in terms of cost-effectiveness and emissions. This is why the logistics sector

is so vital to circularity, as it depends so much on the scrupulous arrangement of the supply loop throughout distinct elements.

The third enabler is visibility and orchestration. As the supply chains become more complex, the report points out that “optimal production planning and inventory management require adaptations to be ready for a circular world.” For example, production planning must consider the availability of recycled materials, while inventory management must consider post-sale item flows. That means that advanced technologies and tracking tools will play a significant role in transparency efforts.

In the consumer electronics sector, technology allowing for product traceability throughout its entire lifecycle already exists. Further,

Fig. 2. The environmental impact of fashion and consumer electronics

Water use

156.5

Land use

40.6

Waste

146

trillion liters

million hectars

million tons

Fashion

150

40

92

Consumer electronics

6.5

0.6

54

~40% of US population's annual water consumption

More than the area of Germany and Switzerland

~50% of Europeans’ annual waste

Equivalent to

2/2022 | Baltic Transport Journal | 31

ECONOMY Fig. 3. The role of the 5 Rs in the circular product lifecycle

Recycle Refurbish

Energy and material input

Production

Reduce

tech-solutions that combine physical marking with a digital twin allow for improved inventory and stock management. Big data and innovative technologies are at the heart of complex logistics models and are needed in the production planning and inventory management of the circular economy as well.

The blocks to build with The ten building blocks included in the report encompass the product’s entire lifecycle. The first one is design for circularity. Here, one of the key challenges is using many different materials to produce one product and the resulting difficulty of disassembling such an item. Making more mono-material designs in both fashion and consumer electronics could certainly make circularity easier to implement.

Next is the development of innovative (raw) materials. In electronics, e.g., researchers from the University of Sydney are working on replacing the rare metal indium – a component of touch screens in consumer electronics – with a combination of silver and tungsten oxide, which are more E1 widely available.

2 The third building block, on-demand and circular production, deals with the issues of E1 2

Resell

Distribution

waste generated during production and overproduction. In the manufacturing phase, waste should be reused as much as possible, e.g., wastewater can be used for industrial cooling or, as long as it is free of pollutants – to water the outside areas. Overproduction, however, is one of the most pressing issues that many industries, particularly fashion, must resolve. Around 20% of manufactured garments in the fashion industry are never used; reducing that number even just by half could free up eight million hectares of land and reduce the sector’s waste by ten million tonnes. Since optimisation is key to circularity, demand-driven manufacturing (e.g., producing a garment once a customer paid for it or producing uncoloured garments) and late-stage differentiation (e.g., only dyeing fabric once a specific order is placed) could be very useful. Here again, logistics service providers will play a vital role, providing demand forecasting and predictive inventory rebalancing.

The fourth building block is reusable and environmentally friendly packaging around the inner product and in external shipping packaging. Government programmes can play a significant role, such as in the UK, where the cabinet offered £200m for research on

Repair Use and reuse

environmentally friendly packaging, e.g., from plants, wood chippings, and food waste.

The next block is smart product return and recovery solutions which ensure that manufacturers can receive and reuse products and materials. This is followed by the sixth stepping block – new use concepts, such as pay-peruse models, and product rentals and leases.

For these two blocks, again, logistics services come into the main focus since the need for innovative digital ecosystems that make secure returns and exchanges feasible for the largest consumer groups possible is necessary.

The seventh block concerns reselling and refurbishing. The GHG-E savings from extended use of a product through reselling and refurbishment are enormous. But, reselling and refurbishing also require smart logistics since deciding early on where a returned product should go next is essential.

The eighth stepping block is viable repair business models. The logistics of getting the product sent out for repairs and financial feasibility pose serious challenges. As it is today, repairs don’t seem to make financial sense for manufacturers and customers alike. However, the report points out that Percentage of global smartphone emissions savings 1

Fig. 4. Global GHG savings from longer use times and new use models of smartphones (million tonnes CO2e)

If 25% switch to refurbished phones which they use for 2 years …

If 25% switch to refurbished phones which they use for 2 years … … and yet another 25% buy used phones which they use for 2 years instead of new ones

1

Percentage of global smartphone emissions savings 8

3 3

End of life

6

8 16

… and yet another 25% buy used phones which they use for 2 years instead of new ones … generating a total savings potential of

6 9

16

… generating a total savings potential of

9

24

Compared to a scenario where consumers buy only new smartphones every two years

32 | Baltic Transport Journal | 2/2022 Source: Shift Project "Lean ICT" report; Green IT report; Backmarket; Apple

24

ECONOMY Fig. 5. Circularity as a function of four levers

Brand uptake

Assortment share

Consumer participation

Circularity share

Scenario 1 – 50% share in each lever

~5-25%

Scenario 2 – 70% share in each lever

~25-50%

Scenario 3 – 90% share in each lever

~65-80%

repairs are costly because they are mostly performed manually and automating this process would drive the costs down.

The ninth block is smart asset collection and material recovery to get the maximum value of end-of-life products. Implementing national collection systems for these items is key, as are incentives for consumers – such as vouchers for returns, simplifying the process, and reducing costs to customers for returning products.

The last building block is advanced recycling technologies. Here, once more, logistical solutions are invaluable to accumulate, direct, and sort product flows by, e.g., material type or its condition.

Reaching the critical level The road to sustainability for global industries is far from simple. For circularity to take root and deliver on its promise to significantly lower GHG-E and become profitable, all stakeholder groups must participate in the process.

The report identified circularity’s four key levers, i.e., on the brand side – brand uptake, which is the share of brands offering sustainable

products and business models, and assortment share – brand’s portfolio share that is circularity-focused, and on the consumer side – consumer participation and level of circular behaviour. “Uptake in each of these levers must reach a critical level before the combined effect of circularity has a significant impact on the share of circularity,” says the report.

In order for the circular model to establish itself, there are some immediate steps stakeholders should take. Brands and manufacturers must establish specific, measurable targets, e.g., for GHG-E reductions; innovate their products and business models; partner with peers and suppliers to incorporate industry standards and data sharing; take a holistic approach to circularity throughout their organisation and raise societal awareness about its benefits.

For consumers, a shift in behaviour is vital to ensure that companies can optimise their 5 Rs. That means a sustainable approach to lifestyle and adapted purchasing behaviour as well as peer education, through word of mouth and via social media, as well as feedback loops

Level of action

– sharing customer opinions with businesses to enable swift adjustments.

Logistics players have always been pivotal in business, but the transition to a circular economic model is impossible without effective supply-chain schemes. Logistics systems will be responsible for supply chain redesign and transparency, best-practices information exchange among various sectors, and striving for transportation decarbonisation.

Also, governments must play an active and visible role in the transition. Regulatory guardrails can steer the progression of the changes and speed them up by, e.g., banning the destruction of functional products or updating and restricting recycling rules.

The state can also stimulate technology and product innovation by offering solutions such as investment opportunities and incentive programmes. Cabinets are also responsible for monitoring and progress management with local and global data collection, and overseeing progress in sustainability-related activities. Additionally, public awareness campaigns encourage sustainable behaviour on an individual level and stimulate societal demand for circularity and its benefits.

Talking logistics Consumer electronics and fashion sectors were chosen as case studies for this report because all consumer goods are responsible for 25% of global GHG-E, second only to the mobility sector. With increasing calls for immediate action towards building a more sustainable future, all industrial manufacturing and consumer behaviours must accommodate global environmental targets.

The circular economy model can help integrate the natural ecosystems with business and consumer needs while redefining the concept of growth and focusing on ecological and societal benefits. Achieving these goals is undeniably linked to some gamechanging innovations from the logistics service providers. They are the enablers and orchestrators of the transition, which is based on highly-efficient supply chain flows.

And since we’re now living with a looming threat of a global war, let us end with a relevant WWII Gen. Omar Bradley quote, “Amateurs talk strategy. Professionals talk logistics.”.

2/2022 | Baltic Transport Journal | 33

Container shipping lines under scrutiny: portent of market re-opening?

We need fair competition

by Robert Keen, Director General, British International Freight Association (BIFA) We have welcomed the news that five competition authorities have created a working group that will meet regularly to develop and share intelligence to detect and investigate suspected anti-competitive behaviour and collusion in the global container shipping industry, using existing international cooperation tools.

I

hope the contents of a letter that BIFA sent to the UK Department for Transport in January 2022, subsequently forwarded to the UK Competition and Markets Authority (CMA), played some role in initiating the five competition authorities’ investigation (including the CMA).

Willing to challenge As the UK’s main trade association for freight forwarding and logistics companies, our members fully accept that a free market economy is open to all but are increasingly concerned that the activities of the shipping lines, and the exemptions from legislation from which they benefit, are adversely and unfairly affecting their customers, especially freight forwarders and small & medium businesses.

Our organisation made those points in a meeting with the CMA in March of this year. In particular, BIFA members voiced their concerns about having 34 | Baltic Transport Journal | 2/2022

their contract rates cancelled by container shipping lines forcing them onto the more expensive spot market. Limiting access to the market is considerably worrying our members.

We are convinced that the well-documented chaos within the container shipping sector is leading to commercial power becoming increasingly concentrated, resulting in diminished market choice and competition and distorted market conditions. It will be interesting to see if the five competition authorities find that the current supply chain disruptions directly result from anti-competitive conduct.

The facts speak for themselves. During a period that has seen the EU block exemption regulations carried forward into UK law, there has been huge market consolidation. In the letter mentioned above, BIFA underlined that there were 27 major container shipping lines carrying global containerised trade in 2015,

with the largest having a 15.3% market share. Today, there are 15 carriers organised into three major alliances carrying that trade, with some analysts observing that the market share of a single alliance on certain key routes could be over 40%. The pandemic has highlighted and accelerated this “development,” which has also contributed to dreadful service levels and hugely inf lated rates, with carriers allocating vessels to the most profitable routes with little regard to the needs of their customers.

The f ive competition authorities are joining a growing number of organisations, including the OECD’s International Transport Forum, the European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT), the International Federation of Freight Forwarders Associations (FIATA), the US Federal Maritime Commission, a nd t he Australian Productivity Commission, in

ECONOMY

Photo: Canva

calling for governments at a national and pan-national level to give careful consideration to evolving business arrangements in the container shipping market to see whether they are in breach of competition law.

In the US, politicians and, in particular, the US President, concerned with high inf lation rates, seem more willing to challenge the shipping lines. In the EU, there is a notable lack of enthusiasm to participate in such action, but that could be because the Block Exemption Regulation is due to be reviewed soon.

Unfortunate language In a separate development, BIFA has also welcomed the opportunity to consult on frontier issues. We have, however, queried some of the language used in a recent UK Government announcement about a 12-week consultation inviting

respondents’ views on the customs intermediary sector, the Simplified Customs Declaration Process (SCDP) and the Transit facilitation, as well as how the consultation has been structured.

BIFA and its members have seen some of the language used in the announcement as critical of the existing players, and especially the work they do and the systems they utilise and deploy, which they believe have been a major reason why work at the frontier has served trade well for many years. Asking them to “revalidate their importance to making the frontier work” and “deliver the evidence

that will determine whether the services they currently provide are easily accessible, high-quality and cost-effective” is an unfortunate language that does nothing to demonstrate how valued the forwarding sector has come to be seen over the last few years.

I would also have expected a little more interest in getting a collective view from the trade association that represents those companies that have kept trade f lowing during a tough few years due to the UK’s exit from the EU, plus the impact of the COVID-19 pandemic on supply chains.

Approximately 1,500 member-strong, the British International Freight Association (BIFA) is the prime trade association for UK-registered companies engaged in the international movement of freight by all modes of transport and/or customs brokerage. Apart from representation, BIFA also provides information and guidance on technical matters, training and development, and industry promotion. Visit bifa.org to learn more.

2/2022 | Baltic Transport Journal | 35

Have mental health interventions made a difference during the COVID-19 crew change crisis?

Humans first, workers second

by Dr Olivia Swift, Senior Programme Manager, Lloyd’s Register Foundation As the coronavirus pandemic took hold in early 2020, many seafarers found themselves stranded aboard their vessels as a significant crew change crisis unfolded globally. Border closures, strict quarantine requirements, and a slow vaccination rollout all had an impact on seafarers’ mental health.

We have known for some time now that seafarers’ mental health is crucial to their wellbeing and safety.

But as the pandemic unfolded and with 400,000 seafarers stranded at sea at one point, stakeholders within the maritime industry, including companies and non-governmental organisations (NGOs), had to respond quickly by providing mental health and psychosocial interventions.

T

o understand more about how seafarers’ mental health had been affected during the pandemic and what more can be done to support them, Lloyd’s Register Foundation funded research involving an international team led by the University of the Philippines Visayas.

The Mental health interventions for international seafarers during the COVID-19 Pandemic study focussed on what interventions were available to, and used by, seafarers during the pandemic and which they believed were most valuable in helping to manage mental health and wellbeing.

How do our seafarers view mental health interventions?

The pilot comprised in-depth interviews with 26 seafarers and survey responses from 1,412 seafarers. Filipinos made up 67% of the sample, with 8% Chinese, although the pilot study also included seafarers from several other countries such as Brazil, India, Jamaica, Japan, and the UK. The average age of respondents was 30 years old, and 36 | Baltic Transport Journal | 2/2022

almost all of them were male (96%). More than half of the respondents (67%) had nonpermanent contracts.

The research team, which included the World Maritime University and the University of Plymouth, identified 22 interventions as part of the pilot study, with 11 provided by company employers and 11 by other industry stakeholders such as seafarers, charities, and governments.

Almost 80% of seafarers said the most common intervention provided by employers during the pandemic were regular updates on crew changes and COVID-19, followed by timely crew changes (57%) and provisions of sufficient and high-quality personal protective equipment (PPE; 53%).

Facilitating timely crew changes were listed by 79% of seafarers as the most helpful action an employer could facilitate. At the same time, 68% said that the provision of immediate family support would have been the second most useful – something that only 21.9% of companies provided.

The most common interventions by

industry stakeholders experienced by seafarers were a positive atmosphere onboard (77%), physical exercise (70%), and casual counselling among crew members (70%).

However, those interventions listed by seafarers as being most useful were communicating with family (87%) and being prioritised for vaccination (77.6%). That said, less than a third (30%) of the respondents were vaccinated against COVID-19 at the survey time.

The results revealed a real gap between what was provided to seafarers during the pandemic and what they viewed as most valuable in terms of mental health support.

This may have been for one of two reasons – the support offered wasn’t valued or seen as accessible by seafarers, or the interventions available were not communicated well enough, which meant that seafarers were not even aware of the support they could access.

Take positive steps It is clear from the research findings that companies and other stakeholders overall

MARITIME

Photo: Lloyd’s Register Foundation

need to improve their efforts to support seafarers’ mental health and wellbeing, especially during crises. This should include timely crew changes, immediate access to family support, and the availability of adequate, high-quality PPE. All of this while promoting a safe working and living environment, such as reducing overtime hours and increasing Internet data allowance.

Likewise, governments need to take action to make sure that seafarers can be vaccinated against COVID-19, prioritising them as essential or frontline workers. NGOs and other industry stakeholders can also play their part in supporting companies to make, implement, and strengthen policies to encourage the creation of a positive atmosphere offshore. Plus, they can make a difference by developing creative and robust strategies to improve the awareness of, access to, and use of mobile mental health apps and virtual platforms. This will help give seafarers more access to spiritual, pastoral, and guidance counselling services and support.

The Neptune Declaration on Seafarer Wellbeing and Crew Change has seen more than 850 organisations across the maritime

industry pledge to drive good practice and resolve the crew change crisis. This initiative is helping drive an industry-wide effort to improve seafarers’ mental health, focusing on the themes identified by this research, including recognising seafarers as critical workers, giving them priority access to COVID-19 vaccines, and establishing and implementing gold-standard health protocols.

This is a positive step forward in tackling the bigger issues affecting seafarers’ mental health and wellbeing, and I would encourage organisations to get behind the Neptune Declaration. However, the research also shows that the needs of seafarers vary.

Fortunately, there are some simple steps that companies can take now.

Listen to your seafarers By reviewing the mental health services you are providing directly to your team, you can better understand what more can be done. For example, have you made services such as mental health helplines, access to port chaplains, and the provision of immediate family support readily available? Do your seafarers know how to access these services?

Simply finding out what works for your crew by encouraging open and honest conversations and communication will help you understand what mental health support they would like to see.

By gathering insight directly from seafarers about the issues affecting them, you can put the interventions in place that work best.

While the pandemic has highlighted the need for effective mental health interventions, seafarers will continue to need support when COVID-19 is less of a risk.

As we all know, seafarers across the maritime industry carry 90% of trade worldwide, playing a vital role in the global supply chain. To fulfil their responsibilities at sea, they spend months away from home; they work long hours without sufficient rest, leading to stress and fatigue.

Many experience short ship turnaround times, risk of criminalisation, harassment and bullying, and dangers from piracy.

That is why it is essential that the maritime industry learns from this study and recognises that seafarers are humans first, workers second, and takes steps to ensure that creating a safer and happier work environment is a long-term priority.

Lloyd’s Register Foundation is an independent global charity that helps protect life and property at sea, on land and in the air. The University of the Philippines Visayas study will contribute to Lloyd’s Register Foundation plans to build capacity in What Works for Wellbeing in Maritime and complements a Lloyd’s Register’s COVID 2020 survey, which looked at significant crew safety and wellbeing lessons learned from the pandemic. Lloyd’s Register Foundation has also funded The SafetyTech Accelerator to engage stakeholders with tech solutions for objective and ethical, real-time assessments of seafarers’ wellbeing, enabling more timely and effective interventions in support of both seafarers and safety. Head to www.lrfoundation.org.uk/en to discover more.

2/2022 | Baltic Transport Journal | 37

Harnessing ammonia as ship fuel

Smells like sustainability

by Hendrik Brinks, Principal Researcher for Zero Carbon Fuels, and Christos Chryssakis, Business Development Manager and Alternative Fuels Expert, DNV Ammonia is one of the most promising future fuels in the maritime world, but introducing it to the fuel mix is far from straightforward. What are some of the biggest challenges that need to be overcome?

And what are DNV and other companies doing to tackle them?

I

t smells pungent and if a mere 0.5% of the air you breath consists of it, it will kill you. And yet ammonia is being heralded as one of the best zero-carbon fuel options for deep-sea shipping in particular. In this article we will highlight some of the central questions that need to be answered before ammonia-fuelled ships can hit the water, including the supply, sustainability, engine technology and the necessary safety considerations.

Competing for supply Today, around 80% of the global ammonia supply is used as fertilizer. Where will the ammonia for shipping come from? This is an issue that remains to be resolved, and production would have to ramp up significantly to meet the future demands of both shipping and global agriculture.

In the context of decarbonization it’s important to understand that when we talk about ammonia’s great potential for shipping, we mean green ammonia. The fuel’s sustainability credentials vary depending on how it is sourced. The fuel can be categorized as ‘brown’ (produced from fossil sources), ‘blue’ (produced from fossil sources with carbon capture) or ‘green’ (produced from renewably sourced hydrogen in a process called electrolysis). While the production of blue ammonia results in 85% less CO2 emissions than brown variants, only green ammonia is a zero-carbon 38 | Baltic Transport Journal | 2/2022

fuel. The crux is: green ammonia is currently not produced anywhere. This is expected to change over the coming decade.

Several fuel suppliers are already doing a lot of work on the necessary framework for producing green ammonia, including certification, technology and costs.

The first ammonia-fuelled engine While the supply of green ammonia will take time, the development of engine technology is progressing fast. In the AEngine joint development project, MAN Energy Solutions, Eltronic FuelTech, the Technical University of Denmark and DNV are working together on developing the first dual-fuel ammonia-powered combustion engines. With combustion testing scheduled for this spring, MAN’s two-stroke model is expected to go to market in 2024. “As an engine designer we are agnostic when it comes to the different fuel types,” says Peter H. Kirkeby, Principal Specialist, Dual-Fuel Engines at MAN Energy Solutions. He furthers, “Ammonia has generated a lot of interest, especially from the deep-sea ship segments, and it has a lot of potential – but developing an engine that is powered by ammonia has been a challenge. One of the biggest hurdles is how to burn ammonia efficiently to extract the maximum amount of power while making sure the engine is still a compact design.”

Unlike diesel oil, ammonia has a very slow flame propagation, which means it burns much more slowly. Its autoignition temperature is also a lot higher, at around 630°C – diesel oil burns at 210°C. This means that sustaining combustion once it gets started is also more difficult with ammonia than with other fuels. “And, of course, you also need to ensure that the engine allows for the usual performance peaks that come with acceleration, etc. We are planning for a final fuel mix that would contain around 95% ammonia and 5.0% of a pilot fuel such as marine gas oil. In the future this could even be biofuel,” says Kirkeby.

Combustion tuning Mitigating harmful emissions is another significant challenge, even with green ammonia. While carbon-free, ammonia contains a lot of nitrogen, and burning it is likely to result in both nitrogen oxide (NOX) and nitrous oxide emissions. Kirkeby explains that NOX emissions weren’t so much of an issue for the engine manufacturer: “They are well-regulated and the abatement technology for NOX – selective catalytic reaction – is already used on many ships and should also be suitable for ammonia. Nitrous oxide emissions are the greater challenge. N2O, or laughing gas, is a very aggressive greenhouse gas that is 283 times stronger than CO2. Our approach is to use the combustion process itself to mitigate these emissions.”

MARITIME This is how it could be done: burning ammonia generates nitrous oxide emissions inside a certain pressure and temperature window during the combustion process.

“Through combustion tuning, we can either stay clear of that window or we can go into the temperature and pressure range where it’s decomposed again. In the diesel cycle, which is the one we use, you have very good control over this,” says Kirkeby.

The final challenge has been to adapt the well-established two-stroke engine system to ammonia without changing the fundamentally good things about it.

“We have to make it a very simple system that can also handle ammonia – meaning that it is modular enough to allow for easy troubleshooting and for crews to have straightforward maintenance procedures even though the fuel is a toxic substance,” Kirkeby underlines.

The ideal first users Looking ahead, the first engines will likely be installed on ammonia tankers.

Currently there are about 200 gas tankers that can take ammonia as cargo and typically 40 of them are deployed with ammonia cargo at any point in time. These kinds of vessels could be ideal candidates as they already have the fuel as cargo and crews with experience in handling ammonia.

Other segments such as bulk carriers and container ships could follow suit. DNV expects the first ammonia-fuelled vessels to hit the water in the second half of this decade, but large-scale uptake of this technology is not expected until the early 2030s.

The safety of ammonia systems and operational procedures is at the top of the agenda in DNV’s work on this fuel. In the AEngine joint development project, DNV is handling the safety aspects and will be performing risk assessments with regard to hazard identification (HAZID), hazard and operability (HAZOP) and failure mode and effect analysis (FMEA).

Mitigating ammonia toxicity DNV class rules for ammonia as ship fuel were published in July 2021, paving the way for technology development. They include provisions for storing, handling and bunkering ammonia on board. Some of the aspects to consider here include the use of toxicity zones and venting masts in specific locations.

The engine technology itself would be fitted with double wall piping, so that the pipe containing ammonia is surrounded by a ventilated space, making it easy to detect leaks (a common standard for all alternative

Fig. 1. Green ammonia – production and use

Source: DNV

Fig. 2. Principles of the ammonia supply system showing main components

Source: MAN Energy Solutions

fuels). Additional solutions such as double block and bleed valves ensure that systems can be separated for maintenance.

Our class rules for ammonia are based on experience with ammonia as a refrigerant and as cargo. We are constantly updating these rules, as ongoing research offers further insights into the necessary margins to ensure that systems are not only safe but also practical in their handling.

Carrying out risk assessments on the first designs for ammonia-fuelled vessels will be an important next step.

Ammonia bunkering Looking beyond operations on board ammonia-fuelled vessels, DNV recently completed studies on ammonia bunkering operations in the ports of Amsterdam and Oslo, examining the potential ramifications of a large ammonia leak in ports. We looked at worst-case scenarios, including the implications of leaks in the port-side supply infrastructure and on a bunker vessel. The Port of Oslo lies in a residential area – so the

stakes are particularly high here.

We defined external safety zones and risk-reduction measures, looking at the radius which would be affected by an ammonia leak. For the Port of Oslo, we found that in principle using a bunkering vessel with refrigerated ammonia would come with an acceptable risk level, because the residential area in Oslo would not be affected by a leak.

But there is still work to be done to ensure safe handling on board.

There are many parts to this puzzle and it’s essential that we have them all in place for ammonia to safely enter the marine fuel market. We will need rigorous safety procedures, the inclusion of ammonia in international regulations as well as engine designs that control harmful emissions and allow for straightforward maintenance protocols. And of course, highly skilled crews that are trained to handle ammonia and green ammonia in sufficient supply. Only then can ammonia reach its full potential as one of the most promising green fuels.

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 world-renowned 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.

2/2022 | Baltic Transport Journal | 39

Addressing crane cracks and fatigue – before it is too late

Ready to drop?

by Richard Phillips, Mechanical Engineer, Casper, Phillips & Associates Inc. Lately, it seems that ports have been putting off crane purchases and want to use their existing machinery past their design life. Additionally, cranes have been pushed harder than ever as they move record amounts of container traffic. These two factors have led to a rise in fatigue-related maintenance issues on older container cranes.

A

lthough steel can have an infinite design life if the stresses are low enough, designing cranes to last forever would increase the cost beyond the competitiveness point. Ports vie for shipping lines, so if one pays more for a container crane, the box move cost will be higher to repay the investment.

Carriers will go to a port with lower operational costs unless there is another hourly operational benefit. Even if crane structures were designed to last infinitely, they would still eventually become obsolete due to the increasing size of container ships.

Some 20 years ago, container cranes didn’t have to service vessels as large as they do today, so it was unheard of to have a gantry with an outreach of over 200 feet (approx. 61 m) because container carriers weren’t that big. Back then, the largest cranes could pick up a single 40-foot or twin 20-foot container, while nowadays, the biggest gantries can lift tandem 40’ or four 20’.

40 | Baltic Transport Journal | 2/2022

In addition, the biggest cranes have a second trolley to help sort the containers when the primary one places them on the dock, which speeds up yard operations. Today, cranes with an outreach that extends beyond 230’ (70 m) are standard on big ship-to-shore gantries, made to handle the largest container ships with 202-footbeams (61.5 m) – with spare room for the future growth of container ships. All that said, crack and fatigue issues may be present in cranes of all sizes.

Slipping between the cracks Many people think of fatigue as ‘wearing out’ of the steel, but this is not quite right. Fatigue failure occurs in components subjected to a high number of fluctuating stresses. Under these conditions, failure can occur at a stress level that is significantly lower than the tensile or yield strength for a static load. Steel has infinite fatigue life if the fluctuating stresses are

low enough and operations take place in an ideal environment.

Cracks can initiate from many sources, such as high cycle fatigue, poor manufacturing, corrosion, or overload events like snag, earthquake, or storm winds. The initial flaws may be microscopic or macroscopic. Growth rate increases with crack size, so a defect that has grown from microscopic to a detectable size is well towards reaching critical size.

However, if the steel lacks reasonable notch toughness, the critical crack length will be significantly smaller than steel with excellent notch toughness.

It is highly unlikely that someone without training would be able to detect the first signs of cracking or fatigue. It is also not likely that the operator would notice a change in the crane’s performance, even if they are very familiar with it.

Further, not all cracks are equal – it’s all about risk management. If failure of a structural beam would cause catastrophic

MARITIME failure, it is considered a fracture critical member. If a fracture critical member has a crack, it is not worth the risk of a catastrophic failure to continue operating until the crane can be taken out of service and the damage is repaired.

Fatigue and corrosion failure of container cranes has been rare, but there has been at least one incidence of a total collapse. There were also several close calls where imminent failure was avoided because cracks were discovered just in time. Numerous fatigue failures of individual members and connections have occurred, but a shift to an alternate load path usually prevents a total collapse.

Therefore, alternate load paths are a vital fatigue design consideration.

Fatigue issues are not always a by-product of overuse. Sometimes the crane design is not robust enough for its specified duty class; other times, there are manufacturing defects that the quality assurance/quality control programmes missed. Also, accidental overload cases such as collisions, stalls, snag loads, or high wind events and earthquakes can reduce a crane’s fatigue life. From our perspective, fatigue problems appear to be increasing due to the record amounts of container traffic.

Managing cracks Just how critical is the problem when cracks appear? The answer depends on how much damage the area can safely withstand and the consequences of such failure.

Damage due to a crack is directly related to how fast the crack can grow. The study of crack propagation is called ‘fracture mechanics,’ which combines analytical methods with experimental research to quantify a crack’s growth potential. The consequences of a member or joint’s failure also play a part in determining the criticality of a crack. A member or joint with no alternate load paths and whose failure would cause a crane to collapse is called fracture critical.

One methodology to manage cracks and other defects within fracture mechanics is using ‘damage tolerance.’ Pioneered by the aerospace industry, the idea is that the engineer assumes there is a crack of the smallest size with a given inspection method. The engineer can then calculate the crack growth rate during regular use.

This analysis is then used to set the appropriate inspection intervals based on the criticality of the member or joint. By calculating the crack damage tolerance of a crane and implementing the resulting inspection programme, chances are much better for identifying and scheduling repair work to minimise operational downtime.

Like in a car, the oil needs to be changed more often than the timing belts. The same is true about cranes: some areas need more attention than others. It typically depends on both the duty cycle the cranes were designed for and how the equipment is operated. A damage tolerance programme integrates these parameters to provide a rational basis for effective inspection intervals.

Best practice: prevent accidents Consulting engineers, port authorities, and shipping companies have developed container crane design specifications. These particulars usually require that the design of various elements comply with domestic and international design codes.

A consultant with engineering expertise is often hired to validate if the crane structure and components meet the requirements. Ensuring a crane design meets the design specifications – that appropriate materials and loads are used – reduces the risk of structural failures.

Photos: Casper, Phillips & Associates Inc.

2/2022 | Baltic Transport Journal | 41

MARITIME Unlike other industries, the container crane sector has no formal body for investigation, documenting, and reporting structural failures. These are often a source of embarrassment, liability or litigation – and therefore remain confidential. If an accident occurs, disputes are usually settled through private litigation. This is unfortunate because the entire industry would benefit from sharing such information.

The best practice is to prevent accidents, so it is always a good idea to have a qualified engineer reviewing the crane manufacturer’s design before construction, along with having a good maintenance programme once the crane is in service.

Calculations have their limitations Typically, cranes are designed only considering high cycle fatigue. Overload events are checked for strength but usually aren’t included in the fatigue analysis.

Several moving load locations are considered, and an equivalent lifted load for fatigue is decided based on the crane classification or specified by the purchaser.

The more realistically the moving load paths model how the crane is used, the more accurate the analysis results will be.

However, even the most thorough calculations have their limitations. They have many built-in assumptions that may not be accurate. For instance, if a weld has poor fusion or porosity, it may not be detected by a surface inspection such as visual, dye penetrant, or magnetic particle testing.

This weld can have subsurface cracks or defects that can grow to the surface much faster than calculations predict. Design to a fatigue criterion is no guarantee that fatigue will not occur. That said, on a statistical basis, fatigue design does provide reasonable fatigue protection.

Another vital point to consider is corrosion. Container cranes work in a relatively hostile environment surrounded by saline and acid laden air. Corrosion is an ever-present enemy that is no mystery to any maintenance department or owner.

Techniques and materials for preventing corrosion are well known, and the failure to maintain a corrosion-free crane is tantamount to accepting a reduced life for the affected crane components.

With advancing age, poor structural maintenance programmes become evident exponentially. For some container cranes, it is too late; hence they should be retired. In other cases, it is possible to increase the life of cranes well beyond the original purchase specifications.

42 | Baltic Transport Journal | 2/2022

If the design of a structural component is controlled by strength and not fatigue, its design life may well exceed the required minimum fatigue life.

The new life of a crane In the current economic environment, there is much uncertainty surrounding steel fabrication. Steel prices,

MARITIME they become too expensive to operate because the maintenance costs and downtime are too high.

access to components, labour force costs and availability, etc., are all extremely volatile. Owners want to protect themselves by procuring cranes on a firm fixed-fee contract. Such a deal includes all expenses associated with crane procurement, including delivery and commissioning for a single price (you’ll forgive me for not publishing any figures).

Likewise, crane manufacturers protect themselves by building in a lot of the costs due to the uncertainty surrounding steel fabrication.

This situation has further increased the number of crane owners taking an interest in extending the life of cranes. A gantry may have been designed for two million cycles.

Still, its owners want to study the business case for upgrading the crane structurally and mechanically to extend the life up to three or even four million cycles.

As cranes are used beyond their original design lifespan, structural strengthening is a common method to extend the useful life. After the initial investment, strengthening will lower the stresses in critical areas, decreasing both downtime and inspection costs. If a critical area has been properly strengthened, it will be less likely to develop cracks and won’t require frequent inspections.

Crane upgrades come in many forms: crane raises, boom extensions, rated load increases and increasing the useful life of the crane. Raising the crane and extending the outreach helps extend the machine’s useful life by allowing it to service evergrowing vessels. Even if the cranes are large enough to handle the calling ships, they may need structural strengthening to enable them to be used longer.

Strengthening can help prevent cracks, thus minimising downtime and increasing operational profitability.

Yet, some cranes begin having significant structural problems. Like a beater, Repairing the cracks If a crack is detected in time, it can be repaired. However, due to residual stresses and other limitations from the on-site crack repair, detectable cracks may re-develop after fewer load cycles.

If cracks are found, further engineering analysis should be conducted to determine what repairs must be made.

Due consideration should be given to increased inspections – and possibly reinforcement. The most common fix for cracks is grinding out and repairing them.

Remember, the best solution is preventing cracks from forming in the first place. Cranes can benefit from designs by experienced engineers who have put in the time to learn and master the subject of fracture mechanics. Fracture mechanics and related research have shown which types of designs and connection details are less likely to have fatigue issues like cracks.

Don’t turn a blind eye The most important defence against structural ageing is targeted inspections performed at specified intervals. Of course, operators and maintenance personnel should be trained to inspect constantly at every opportunity. This is the best form of insurance, and like buckling a seat belt, it is free. However, this should not replace inspection by trained technicians working at known intervals.

Periodically, all cranes should be examined by a technician with broad, generic experience with structural maintenance problems. Dangerous cracking and deterioration can escape even the most conscientious visual inspection. A sizeable fatigue crack can close so tightly that it may not be visible to the naked eye even if known to exist. The only reliable way to find fatigue cracks is by a qualified expert using nondestructive testing (NDT) methods.

An engineered inspection manual can tell inspectors where and how often to look for cracks. A good inspection manual will show which NDT tests to run on the welds, which are the most likely to develop fatigue cracks. For container cranes, maintenance windows are available in between berthing vessels. The inspection methods most used are visual, magnetic particle, or ultrasonic, and will depend on how critical the member is to the crane’s load-carrying capacity.

Inspection by outside technicians is expensive but can save property and lives.

Like all other risk-benefit alternatives, there is no universal answer to how much one should spend to reduce the danger.

The key to getting the best life out of these cranes is to have a good inspection manual and a responsive maintenance programme. Creating post-design life structural inspection manuals is a widely accepted service many crane owners currently utilise. Early discovery of a crack can limit the scope of the repair and curb unscheduled downtime.

CPA was founded in 1987 by Bill Casper and Rich Phillips after relocating from a California consulting firm. We started with pre-established worldwide recognition as structural engineers specialising in container cranes. For the container industry, we are unique in that we offer a multi-discipline combination of mechanical, structural, electrical and computer science engineering, plus anti-corrosion coating technology. We have also expanded our crane expertise to include most types of cranes – from RTG, RMG and Goliath cranes to B.O.P handlers on drillships. Ports and crane manufacturers worldwide use our services to design and procure all types of load handling equipment. Head to www.casperphillips.com to learn more.

2/2022 | Baltic Transport Journal | 43

The risks and precautions when transporting lithium batteries

Taking charge

by Peregrine Storrs-Fox, Risk Management Director, TT Club The inherent risk in transporting lithium batteries by any mode is well documented, as have been a series of fires caused by their mishandling. It is clear that the development of green technology will lay increasing emphasis on their use in the future. Let us highlight the nature of the risks, along with the precautions that must be strictly in place for safely transporting these crucial components of modern manufacturing.

L

ithium batteries, particularly lithium-ion (Li-ion), have become a preferred energy source for many products given their high power density, light weight and the ability to recharge, the last allowing to use them for several years. Today, they are used to power a variety of goods, including handheld devices (such as phones or cameras), through larger items like power tools, to increasingly larger electric vehicles (e-bikes/scooters and even seagoing ferries). The market is exponentially increasing through consumer demand and broader energy transition globally.

Inevitably, lithium batteries have been moved by all modes of transport. However, following serious incidents, revised regulatory restrictions regarding the carriage of lithium batteries by air, taking effect from 1 April 2022, may result in greater volumes being transported by surface modes.

Coupled with a number of recently recorded incidents, safety concerns around the shipping of lithium batteries rightly continue to grow amongst the maritime community.

Understanding the risks is therefore crucial.

Demand outpaces regulations Lithium batteries contain stored energy utilising two different key chemistries: lithium metal/alloy and Li-ion. The former contain metal lithium and are primarily disposable, whereas the latter are rechargeable and have a different chemical composition.

The hazard that a given lithium battery presents is primarily related to the amount of contained reactive substances (including lithium and other reactive material).

The sharp rise in demand has been accompanied by the supply of cheaper, poorer quality and untested batteries, including refurbished and even homemade power banks. E-commerce platforms have facilitated a global trade in these potentially lethal batteries, often circumventing international standards and regulations.

44 | Baltic Transport Journal | 2/2022

As with many successful technologies, market demand has outpaced the development of safety regulations. Since the mid1980s, lithium batteries have been classified under dangerous goods regulations for transport based on the weight of lithium contained in the cells or battery. As the technology has advanced, the amount of energy derived from the active material has increased by up to 50%, while the cell weight has reduced significantly.

Through the manufacturing stage and in preparation for transport, lithium batteries must have safeguards built in to ensure that they can withstand not only the rigours of transport but also everyday use through their expected lifetime. There are international standards that lithium batteries must meet to receive certification for safe transport, which involves passing a rigorous series of tests performed by an approved independent testing laboratory. The responsibility for testing and achieving certification rests with the shipper/manufacturer.

The rigours of transport should not be overlooked. Shock and impact damage may result in thermal stability issues, including short circuit. Defective lithium batteries have the potential to release all their stored energy instantly, resulting in thermal runaway and flammable gases. Proximity to external heat sources can also present challenges.

Given their nature and use, newly manufactured lithium batteries can be transported by themselves as individual items, packaged with products (i.e. replaceable) or within products (not intended to be removed). However, consideration should be given to reverse logistics, including used, damaged and faulty products being returned, lithium batteries being shipped as waste and those being moved for recycling.

In all instances, the state of charge of any battery is a relevant factor; less stored energy generally equates to less risk.

Apart from being transported as cargo, lithium batteries are used to power many

of the technological devices deployed in the supply chain to monitor and deliver efficiencies, such as GPS locators, motion detection and security, including for smart containers. Deliberations remain underway at the International Maritime Organization (IMO) in recognition of the potential hazards that these devices pose when placed in the hold of a container ship. Both regulators and the industry seek to set minimum standard criteria in the International Maritime Dangerous Goods (IMDG) Code for devices powered by such batteries.

In summary, the risks presented through the intermodal supply chain primarily exist where new lithium batteries are poorly manufactured, untested or defective. These batteries have a higher propensity to malfunction. It is also recognised that risks are higher when the batteries are being charged. At any point of handling, storage and transport, the supply chain risk is compounded by used, fully or partially charged batteries and those destined for recycling or waste. Furthermore, some incidents have revealed the use of inadequate packaging, fundamentally compromising safety.

Know your cargo As noted above, lithium batteries, until around the mid-1980s, came within the IMDG Code Class 4.3 regulations (substances which, in contact with water, emit flammable gases). Nowadays, there are four different UN numbers for the classification of lithium cells or batteries: UN 3090 (lithium metal batteries shipped by themselves); UN 3480 (Li-ion batteries shipped by themselves); UN 3091 (lithium metal batteries contained in equipment or packed with equipment); and UN 3481 (Li-ion batteries contained in equipment or packed with equipment). These are included within Class 9 of the IMDG Code as miscellaneous dangerous substances and articles.

That said, experts and regulators were persuaded that smaller batteries present

LEGAL

Photo: Canva

reduced hazards compared to their larger counterparts through the supply chain.

While there are various special provisions applicable to lithium batteries, the focus here is on one alone. On the basis that smaller lithium batteries present a reduced hazard, within the UN exists the SP188 regulation to enable transport under specific conditions.

Where lithium batteries or cells meet these requirements, they are not subject to other provisions of the IMDG Code when offered for transportation. Notwithstanding qualification for transport under SP188, however, these batteries continue to be dangerous goods, presenting the same risks.

The SP188 qualifying criteria start by considering the weight and energy content, specifying the maximum values for lithium metal and Li-ion cells and batteries.

The requirements proceed to focus on the protection of the cell or battery, setting the required packaging and considering protection from the risks of short circuit, particularly where cells or batteries are contained within the equipment.

An important point to raise here is that because those lithium batteries qualifying under SP188 are not subject to other provisions of the IMDG Code, beyond the marking of the packages (externally invisible once packed in a freight container), there is no requirement to notify the carrier specifically of the contents. Conversely, cells and batteries that don’t satisfy the requirements set out under SP188 are fully regulated for transport. Accordingly, such shipments must be

declared and shipped as dangerous goods under the applicable UN number.

As with many cargo types, the majority of shippers will take all practicable steps to ensure that their cargo meets specifications, achieves certification and is classified, packaged, packed, labelled/marked and declared correctly for transport. The small – frankly criminal – minority are motivated to avoid compliance, entering cargo into the supply chain that presents a great risk to all.

Once lithium batteries, particularly those shipped under SP188, are placed into the intermodal supply chain, there is very little opportunity for the cargo to be checked, visually or otherwise, to verify compliance.

Due diligence is therefore critical: know your customer, understand their processes and make sure that they are taking the required actions in preparing and declaring the cargo correctly. Accurate, unambiguous and timely communication between contracting parties is also vital, ensuring that crucial information is shared with all actors in a given supply chain.

Fat in the fire?

History illustrates that the most catastrophic losses associated with the

carriage of lithium batteries have unfortunately occurred so far in the air mode.

All surface modes are, however, exposed to these risks. There may be fewer reported incidents, but several container fires are suspected to have involved lithium batteries. Furthermore, the technological advances, modal shift away from air and societal appetite for electric vehicles all point to emerging risks.

Lithium-fuelled fires are challenging to extinguish, prone to thermal runaway and potentially explosive. Due to the heat generated, re-ignition once a fire has been extinguished is an additional risk, together with the impact on adjacent cargo or equipment. Furthermore, hard lessons learned by land-based fire responders, particularly relating to e-vehicles, need to be assimilated into the unforgiving maritime environment, where the crew’s capability to fight fire is already woefully strained.

Fire is an unwelcome hazard at any point during transport, storage or handling. TT Club will maintain efforts to increase awareness of the challenges faced onboard container ships and within port/ terminal areas.

TT Club specialises in the insurance of intermodal operators, non-vessel owning common carriers, freight forwarders, logistics operators, marine terminals, stevedores, port authorities and ship operators. The company also deals with claims, underwriting, risk management as well as actively works on increasing safety through the transport & logistics field. Please visit www.ttclub.com for more info.

2/2022 | Baltic Transport Journal | 45

Decarbonising shipping – successfully and fairly

Bucket of green steam?

by Przemysław Myszka “Shipping is an essential global industry which is currently on an emissions trajectory that is dramatically out of line with the Paris Agreement temperature goal,” reads Closing the Gap. An Overview of the Policy Options to Close the Competitiveness Gap and Enable an Equitable Zero-Emission Fuel Transition in Shipping, a report prepared by UMAS on behalf of the Getting to Zero Coalition. If the transport community, both off- and ashore, truly cares about the environment and wants to participate in keeping the global temperature rise below one and a half centigrade, then there is no other option for it than to become zeroemission – and do so relatively fast. Fortunately, UMAS marks, several measures can get the sector to the Promised Land by mid-century. Implementing some of them will be essential, which isn’t to say others cannot put a match to setting the green revolution alight. The authors also note that decarbonising shipping is something more than what next-gen marine fuel goes into the tank – in that the transition should be fair, reducing inequality instead of hammering the fractures between the well-off and the underprivileged.

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Fig. 1. Historical and projected international shipping emissions and trade metrics, indexed in 2008, for 1990-2050 300 Projected ton-miles Projected (high) ton-miles

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(high)

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Index Index (2008 (2008 = 100%) = 100%)

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n 2018, the entire shipping industry released an estimated 1,076mt of greenhouse gas emissions (GHG-E), which translates to the widely publicised figure of 2.9%, the sector’s share in total anthropogenic carbon footprint.

Should the industry do nothing, its emissions will rise by 90-130% by 2050 (counting from a 2008 baseline) following an increase in traffic powered by fossil fuels.

In spring 2018, the International Maritime Organization (IMO) signed off on its Initial GHG Strategy: halving international shipping’s absolute annual GHG-E by 2050 (again, versus the 2008 starting point), plus reducing the sector’s carbon intensity by at least 40% till this decade’s end. All of this is to align international shipping with the 1.5°C-Paris Agreement target. UMAS adds that domestic shipping, which falls under national jurisdiction, should join the effort as quickly as possible since it accounts for 30% of the industry’s total GHG-E.

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Source for all figs. and Tab. 1: UMAS’ Closing the Gap. An Overview of the Policy Options to Close the Competitiveness Gap and Enable an Equitable Zero-Emission Fuel Transition in Shipping

SUSTAINABILITY In essence, UMAS sees only one possible way to marry the increase in transport demand with making shipping climate-neutral: transitioning to zero-emission fuels, which should become the dominant energy

source by the 2040s. Because these will be at best double the price of fossil bunkers throughout the 30s and 40s, incentives are needed to close the gap. Preferably, a whole bucket of policies – economic and political

(global, regional, and national), plus informational and voluntary for good measure. If played out with skill, shipping might, without batting an eyelid, call itself the most environmentally friendly transport mode. Sink or swim.

Fig. 2. Overview of climate mitigation measures

Emissions Taxes & Levies

Economic Instruments

Feebates Cap-and-Trade System

Emissions Trading System Subsidies

Baseline-and-Credit System Fuel Subsidies Production Subsidies R&D Subsidies

Performance Standards

Policy Measures Direct Regulatory Approaches

Technology Standards Product Standards

Information Programmes

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Government Provision of Public Goods & Services/National & Regional Measures

Economic policies Economic instruments for decarbonising shipping revolve around market-based measures (MBMs) used by regulatory bodies to narrow the price spread between fossil and zero-emission fuels. It can be done by increasing the cost of using the former (by imposing a price on carbon) or lowering the latter’s (through subsidies, tax breaks, and funding research & development).

Economic policies can generate mindboggling revenues, counted in billions of dollars annually, which could be recycled to aid shipping in the transition. They can also incentivise f leet renewal towards tonnage that performs better than a set reference point, thus receiving rebates generated from collected fees (hence their name: feebates).

Better late than never, the IMO decided to start working on mid-term GHG-E cutting measures at the 76th meeting of its Marine Environment Protection Committee in June 2021. These include MBMs, not necessarily a novelty topic to the IMO, looming at its agenda-horizon since 2003, but with discussions null and void from 2013.

Carbon price & revenue recycling Setting a carbon price – on the amount of fossil fuel consumed or CO 2 /GHG emitted – would be the most straightforward solution. Authors of Closing the Gap scrutinised two scenarios in this regard: axing by half or entirely beheading absolute emissions by the middle of the current century. The analysis was conducted on the assumption that carbon

pricing is the only measure undertaken to fulfil IMO’s obligations.

In both cases, carbon pricing starts in 2025, beginning with a modest 11 US dollars per one tonne of CO 2 . GHG-E reach their highest five years later when the levy goes up to around $100/tCO 2 .

For the -50% scenario, the carbon price averages at $173/tCO2 , peaking at

$264/tCO2 . Interestingly, the levy in the -100% storyline isn’t much higher and averages at $191/tCO 2 (though its peak reaches $360/tCO2).

However, the authors note that a more aggressive pricing approach might be sounder, “[…] it could be better to set the initial carbon price at a higher level than the model and follow a smoother 2/2022 | Baltic Transport Journal | 47

Millions Millions

Emissions Emissions Carbon Carbon price price 1.000 1.000 500 500 900 900 450 450 800 800 400 400 700 700 350 350 600 600 300 300 500 500 250 250 400 400 200 200 300 300 150 150 200 200 100 100 100 100 5050 00 00 2020 2020 2025 2025 2030 2030 2035 2035 2040 2040 2045 2045 2050 2050

Scenario Scenario D:D: Target Target ofof zero zero operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2050 2050

Emissions Emissions Carbon Carbon price price 500 500 1.000 1.000 450 450 900 900 400 400 800 800 350 350 700 700 300 300 600 600 250 250 500 500 200 200 400 400 150 150 300 300 100 100 200 200 5050 100 100 00 00 2020 2020 2025 2025 2030 2030 2035 2035 2040 2040 2045 2045 2050 2050

Millions Millions

SUSTAINABILITY

Scenario Scenario E:E: Target Target ofof 50% 50% absolute absolute reduction reduction inin operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2050 2050 (compared (compared toto 2008); 2008); zero zero operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2070.

2070.

Fig. 3. Carbon price trajectories and their associated emission trajectories

Year Year

Year Year )) Emissions Emissions (tonnes (tonnes CO CO 2 2

increase, thereby easing potential economic shocks of sharp price increases.

This could also help to ensure there is an emergence phase of the transition during the 2020s (e.g. funding RD&D to reach

Carbon Carbon Price Price (US$/tonne (US$/tonne CO CO )) 2 2

five percent zero-emission fuel penetration by 2030), which enables shippingspecific cost reductions prior to the more rapid uptake of new fuels scheduled for the 2030s.”

Pricing will also depend on the degree to which the revenues will be recycled, i.e., returned to the industry to support decarbonisation. If all funds were to come back, the carbon price could be lowered by half.

Fig. 4. Projected future marine fuel demand SCENARIO SCENARIO EE

SCENARIO SCENARIO DD

Target Target of of 50% 50% absolute absolute reduction reduction inin operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2050 2050 (compared (compared toto 2008); 2008); zero zero operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2070.

2070.

Target Target of of zero zero operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2050 2050

15 15

15 15

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LSHFO LNG HFO HFO MDO MDO LSHFO LNG Based Based onon Scenario Scenario EE which which has has aa target target ofof 50% 50% absolute absolute reduction reduction inin operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2050 2050 (compared (compared toto 2008); 2008); zero zero operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2070.

2070.

00 2016 2016

2021 2021 2026 2026 2031 2031 2036 2036 2041 2041 2046 2046 2051 2051 Year Year

Hydrogen Hydrogen Ammonia Methanol Ammonia Methanol Based Based onon Scenario Scenario DD which which has has aa target target ofof zero zero operational operational shipping shipping GHG GHG emissions emissions globally globally byby 2050.

2050.

In the -100% scenario, this would mean an scenario tot up to $53-105b, rounding the early 2040s to achieve zero emissions average of $96-191/tCO2 (peaking at $179- up $1.3-2.6tr in 2025-2050. As such, by 2050 and with that, the potential for 358/tCO ). UMAS also underlines that these funds would cover the $1.0-1.4tr generating revenues decreases as well,” Carbon Carbon price price (US$/tonne CO CO )) Carbon Carbon price price (US$/tonne (US$/tonne CO CO )) 2 (US$/tonne 2 2 2 2 “[…] of investment need for (partial) decar- explain the authors of Closing the Gap. 500 500 the expectation of what the carbon 500 500 Percentage of revenue revenue recycling recycling Percentage ofof revenue revenue recycling recycling 450 450 will be in thePercentage 450 450 price future is of key to estabbonisation of shipping as estimated byPercentage UMAS notes that recycling all the rev400 400 400 400 0% 0% 100% 100% 0% 0% 100% 100% lishing the business case for zero-emission UMAS. The figures for the -100% case are enues would leave no money for support350 350 350 350 investments.

Price corridors – i.e. setting $41-81b/year, $1.0-2.0tr, ing what the authors call least developed 300 300 300 300and $1.4-2.0tr, 250 250 250 a250 band of minimum and maximum carbon respectively. “A higher carbon price and countries and small island developing 200 200 200 200 Carbon Carbon price price range range prices – could be implemented to offset Carbon a faster decarbonisation trajectory in the states, two groups worst-hit by climate Carbon price price range range 150 150 150 150 some of the business uncertainty with scenario targeting full decarbonisation change.

These nations don’t have the 100 100 100 100 future carbon pricing.” by 2050 result in a lower amount of total means to counter what is already hap5050 5050 0 Depending 0 on the level of recycling, revenue generated. That 0is0because, in this pening, let alone bear the brunt of green2020 2020 2025 2025 2030 2030 2035 2040 2045 2045 2050 2050 2020 2020 2025 2025 2030their2035 2035 2040 2040 2045 2045 2050 2050 yearly revenues gathered under2035 the -50%2040 scenario, emissions reduce rapidly from 2030 ing logistics chains.

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48 | Baltic Transport Journal | 2/2022

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Fig. 5. Fuel price projections

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72

96

Biomass

Bio-methanol waste stream

19

21

23

25

20

40

61

81

9

19

26

33

130

114

99

83

208

182

156

130

Substitution price for biofuels Renewable electricity

E-diesel

Renewable electricity

E-methanol

84

73

63

52

136

118

101

83

Renewable electricity

E-LNG

69

60

51

42

113

98

84

69

Renewable electricity

E-ammonia

55

47

39

30

96

82

68

55

Renewable electricity

E-hydrogen

52

44

36

28

92

79

65

52

Natural gas

NG-ammonia

28

26

24

23

46

43

40

38

Natural gas

NG-hydrogen

25

23

21

19

44

40

37

34

Based on Scenario E which has a target of 50% absolute reduction in operational shipping GHG emissions globally by 2050 (compared to 2008); zero operational shipping GHG emissions globally by 2070.

Source: Lloyd’s Register & UMAS (2020).

Based on Scenario D which has a target of zero operational shipping GHG emissions globally by 2050.

Fig. 6. Carbon price trajectories based on the degree of revenue recycling Carbon price (US$/tonne ) price (US$/tonne ) This CO price difference is the result of theCarbon inherently higher CO price of new 2 2 500 500 zero-emission fuel alternatives in comparison to established fuels.

Percentage of revenue recycling Percentagefossil of revenue recycling 450 450 400 0% 100% 0% new100% Being widely used and well-established,400 fossil fuels have limited 350 350 capital investment costs, and relatively300 small research and development 300 250 250 (R&D) costs.

200 200 Carbon price range Carbon price range 150 150 100 100 50 50 0 0 2020 2025 2030 2035 2040 2045 2050 2020 2025 2030 2035 2040 2045 Year

One solution would be to have a higher than needed decarbonisation carbon price, generating surplus revenue for subsidising other projects. These investments could include crew training for Global South populations to provide them with future hi-end jobs like handling remotelyoperated vessels. The funds could also be used for setting up future fuel production plants. For instance, the International

2050

Year

Energy Agency (IEA) reports that currently, almost all capacity for producing zero-emission hydrogen and fuels based on it are in advanced economies and China, meaning that less developed countries might end up throwing themselves at others’ mercy. Transferring money and technology would, in turn, help the Global South to become independent – from extractivism and imports.

“The language in the Initial GHG Strategy […] was a hard-fought political compromise that does not specify how the principles should be interpreted or operationalised,” Closing the Gap reads.

While it prescribes a socio-economic analysis of climate policy measures ahead of implementation, it doesn’t specify how such impacts, especially disproportionate ones, could be addressed.

2/2022 | Baltic Transport Journal | 49

Based on Scenario E which has a target of 50% absolute reduction in operational shipping GHG emissions globally by 2050 (compared to 2008); zero operational shipping GHG emissions globally by 2070.

Based on Scenario D which has a target of zero operational shipping GHG emissions globally by 2050

SUSTAINABILITY

Fig. 7. Future revenue range from carbon price based on the degree of revenue recycling Minimum

Maximum

2050

2046

2048

2044

2042

2040

2038

2034

Year

2036

2032

2030

2028

2024

2026

2022

Billions US$

Maximum

200 180 160 140 120 100 80 60 40 20 0

2050

2046

2048

2044

2042

2040

2038

2034

2036

2032

2030

2028

2024

2026

2022

2020

Billions US$

200 180 160 140 120 100 80 60 40 20 0

2020

Minimum

Year

Fig. 8. Total investment needs compared to total revenues that could be generated BASED BASEDON ONSCENARIO SCENARIOEEwhich whichhas hasaatarget targetofofzero zero BASED BASEDON ONSCENARIO SCENARIOEEwhich whichhas hasaatarget targetofofzero zero operational operationalshipping shippingGHG GHGemissions emissionsglobally globallyby by2050.

2050. operational operationalshipping shippingGHG GHGemissions emissionsglobally globallyby by2050.

2050.

3.0 3.0 3.0 3.0

3.0 3.0 3.0 3.0

2.5 2.5 2.5 2.5

2.5 2.5 2.5 2.5

1.5 1.5 1.5 1.5 1.0 1.0 1.0 1.0 0.5 0.5 0.5 0.5 00 00

2.0 2.0 2.0 2.0

Range Range Range Range

2.0 2.0 2.0 2.0

Trillions Trillions US$ Trillions TrillionsUS$ US$ US$

Range Range Range Range

Trillions Trillions US$ Trillions US$ TrillionsUS$ US$

BASED BASEDON ONSCENARIO SCENARIOEEwhich whichhas hasaatarget targetofof50% 50%absolute absolute BASED BASEDON ONSCENARIO SCENARIOEEwhich whichhas hasaatarget targetofof50% 50%absolute absolute reduction reductionin inoperational operationalshipping shippingGHG GHGemissions emissionsglobally globally reduction reductionin inoperational operationalshipping shippingGHG GHGemissions emissionsglobally globally by by2050 2050(compared (comparedto to2008); 2008);zero zerooperational operationalshipping shippingGHG GHG by by2050 2050(compared (comparedto to2008); 2008);zero zerooperational operationalshipping shippingGHG GHG emissions emissionsglobally globallyby by2070.

2070. emissions emissionsglobally globallyby by2070.

2070.

1.5 1.5 1.5 1.5 1.0 1.0 1.0 1.0 0.5 0.5 0.5 0.5 00 00

Revenues Revenues Revenues Revenues

Investmentneeds needs Investment Investment Investmentneeds needs

High Highestimate estimate Highestimate estimate High

Low Lowestimate estimate Lowestimate estimate Low

Revenues Revenues Revenues Revenues

Investmentneeds needs Investment Investment Investmentneeds needs Minimum Minimum Minimum Minimum

Maximum Maximum Maximum Maximum

Fig. 9. Total investments needed to decarbonise shipping SCENARIO SCENARIO D D

Target of 50% absolute reduction in operational shipping Target of 50% absolute reduction in operational shipping GHGGHG emissions globally by 2050 (compared to 2008); operational emissions globally by 2050 (compared to 2008); zerozero operational shipping emissions globally by 2070. shipping GHGGHG emissions globally by 2070.

Target Target of zero of zero operational operational shipping shipping GHGGHG emissions emissions globally globally by 2050. by 2050.

1.8 1.8

1.6 1.6

1.6 1.6

1.4 1.4

1.4 1.4

1.2 1.2

1.0 1.0 89%89%

0.8 0.8 0.6 0.6 0.4 0.4

88%88% 85%85%

0

1.2 1.2

89%89%

1.0 1.0

0.8 0.8 0.6 0.6

87.5% 87.5% 85.5% 85.5%

0.4 0.4 0.2 0.2

0.2 0.2 0

US$ Trillion

2.0 2.0

1.8 1.8

US$ Trillion

2.0 2.0

US$ Trillion

US$ Trillion

SCENARIO SCENARIO E E

produced withwith produced produced withwith produced produced withwith produced electrolysis SMRSMR + CSS + CSS a mix a mix of SMR of SMR + + electrolysis CSSCSS andand electrolysis electrolysis supply supply infrastructure infrastructure

50 | Baltic Transport Journal | 2/2022

0

0

produced withwith produced produced withwith produced produced withwith produced electrolysis SMRSMR + CSS + CSS a mix a mix of SMR of SMR + + electrolysis CSSCSS andand electrolysis electrolysis

onboard onboard shipship

SUSTAINABILITY

Photos: Canva

Feebates A feebate system is when an emission or carbon intensity benchmark is put in place, adjustable to keep track of the changes. The demarcation line separates those underperforming, who incur a fee, from those going beyond the minimum, hence awarded.

“A feebate mechanism offers added value by providing incentives for continuous

improvement in carbon intensity, investment in zero-emission fuels and technologies and more efficient operations, thereby stimulating innovation and reducing emissions,” UMAS observes. Still, they caution, a feebate scheme is as good as the accuracy of the set benchmark. It may also make it exceptionally difficult for companies whose

fleets are red-flagged, as they will have to pay the penalties whilst scrambling to renew their tonnage to start receiving feebates.

Then again, a feebate system would be largely passive in management. Revenues would be directly recycled, evading a redistribution system, thus lowering the administrative expenses gnawing at the fund.

Emission trading system(s) In a sense, an emission trading system (ETS) is the opposite of carbon pricing.

The regulator regiments an overall emission target, leaving the topic of sorting out the goal-hitting carbon price to the market.

There are different ETS set-ups, but UMAS argues that the cap-and-trade (CAT) one is more probable in achieving the targeted outcome. Under a CAT ETS, an upper limit on GHG-E is set while allowances are traded (some might be distributed for free, e.g., to ease the initial collision). Those better performing can earn extra money, whereas others

continue to operate (and pollute) as long as they can afford to buy another CO 2 tonne.

However, the authors of Closing the Gap note that a CAT ETS has certain drawbacks. First, it doesn’t incentivise companies to surpass the system’s targets. Second, the price volatility of carbon allowances doesn’t add to daily business nor longerterm investment certainty. If the set-up’s design fails, market prices can rapidly fall due to global shocks. In this instance, companies are discouraged from making green investments because the market promotes the contrary – burning fossil fuels.

Such a situation was the fate of the European Union’s ETS in the wake of multiple 21st crises, prompting the block to slim down its ETS to ramp up the prices. The current proposal of the European Commission is to increase the EU ETS reduction target for 2030 to -61% (vs 2005). This move would increase the prices to €90-130/tCO2 in 2030, sharply contrasting with the below €10 prices seen in 2011-2017. Since the EU intends to make shipping part of its ETS, shipowners and operators have at least a more or less informed insight into what it will mean to serve the Fit for 55-EU market cost-wise.

2/2022 | Baltic Transport Journal | 51

SUSTAINABILITY Subsidies The United Nations’ definition of an environmental subsidy is “current or capital transfer that is intended to support activities which protect the environment or reduce the use and extraction of natural resources.” Consequently, subsidies decrease the price of zero-emission fuels rather than increase the cost of fossil fuels.

UMAS brings forth three types of subsidies that can help decarbonise shipping. First, fuel subsidies – cash handouts or tax breaks per unit of fuel or GHG-E reduction. Second, production subsidies – allocated to lower fuel production costs, set up the bunkering infrastructure, and construct zero-emission vessels. Third, R&D subsidies – supporting technological breakthroughs that lower the cost of zero-emission fuels (e.g., more efficient and cheaper electrolysers and storage). These are, authors of Closing the Gap say, “[…] examples of policy options which promote and support the production of alternative zero-emission fuels. As such, they complement demandside policy, […] carbon pricing or commandand-control measures. Combining both

demand- and supply-side policies is viewed as a more effective mix than stimulating only one side of an energy transition.”

Subsidies have their own set of challenges.

They may go against state aid rules, which from a combating climate change perspective is an argument against prohibiting state support and an exit point from the profit-over-environment/ ethics system. Subsidisation can also turn into winner-picking, which runs the risk of betting on the wrong horse. This uncertainty can be circumvented by basing the decision on the best scientific understanding (or aggravated by letting petty political and corporate interests take precedence over environmental care).

Speaking of discrimination: according to research outlined in Fossil Fuel Welfare versus the Climate, annual fossil fuel subsidies amass to $2.9tr – and over $5.0tr by adding the externalities. In contrast, IEA calculates that $1.71tr/year in clean energy and energy efficiency is needed by 2035 to nail the 1.5°C goal (the UN’s Intergovernmental Panel on Climate Change sets the figure at $2.38tr/year

in 2016-2035 – still lower than what fossil fuel companies get; compare that to annual climate finance flows in 2017-2018 averaging at $574b).

Author of the cited report, Alex Lenferna from 350.org (one of the few global eco-NGOs not hijacked by Big Oil & Gas), sounds the alarm, “[…] if we reinvested that fossil fuel welfare into social and ecological welfare, we could create a much more socially and ecologically prosperous future.” UMAS adds, “While subsidies alone are unlikely to decarbonise the shipping industry, they could play an important role in closing the competitiveness gap by lowering the prices of zero-emission technologies and fuels and stimulating RD&D and innovation. They could also be designed to support an equitable transition […].”

In the end, it seems, the discussion shouldn’t centre around ideological deadend chop logic whether subsidies are bad or good per se – but to what end they are used.

To decarbonise shipping in particular, and the world in general, green subsidies should go in, while the dirty ones– out the window.

Direct regulatory approaches Called command-and-control measures, they set standards that directly aim at decreasing ship emissions, therefore indirectly making fossil fuels more expensive.

“They could have a positive effect on RD&D and stimulate the uptake of alternative fuels in a similar way to carbon pricing.

By mandating certain outcomes, they can

also bypass some of the market barriers and failures and guide investments in a way that avoids locking in infrastructural choices and stranding of assets,” says UMAS.

Performance / emission standards These lay down mandatory performance targets by capping certain activities’ maximum allowable GHG-E or carbon intensity.

However, it is done without setting in stone the specific technologies and techniques of achieving the end.

There are some already in place or just around the corner regulations. These include the Energy Efficiency Design Index (EEDI: a CO2 intensity metric which considers a ship’s

total emissions, at the design stage, relative to the transport work done by the vessel resulting in grams of CO2 per tonne nautical mile); the Energy Efficiency Existing Ship Index (EEXI: which will apply technical efficiency standards to the existing fleet); and Carbon Intensity Indicator (CII: requiring ships to achieve a specified annual operational carbon intensity).

Taken alone, UMAS remarks, “[…] the stringency levels of these standards are

currently too low to lead to significant emissions reductions and, by themselves, will not cause the sector to even meet the IMO’s minimum level of ambition.” While there is a relatively high certainty that performance standards will achieve their goals, it is outside their scope to decrease absolute GHG-E. More shipping activity by better performing vessels, hence cheaper operation-wise, will nevertheless increase emissions.

Technology standards These, in contrast, do determine which solutions are applied – without setting the overall outcome. “With regards to decarbonising shipping, technology standards could, for example, mandate the use of wind propulsion technology, set mandatory speed limits,

and phase out or ban the use of fossil fuels altogether,” reads Closing the Gap. Implementing technology standards across the board can stumble over a variety of obstacles. While specific solutions are already mature enough, think wind assistance,

it might take significant time before supply meets demand (including shipyards’ capacity to install rotors or sails on both newbuilds and retrofits). At the same time, a uniform speed limit may be beneficial for this-and-that route or vessel but backfire when applied to others.

Product standards These define the characteristics of a given product, fuels among others, either banning the use of those that fall out the parameters or labelling them so that clients (ship52 | Baltic Transport Journal | 2/2022

owners and operators) and their customers (shippers, freight forwarders) can make an informed decision when determining what product or service to buy.

Emission Control Areas (ECA) are probably the most widely known applications of product standards insofar as they mandate the use of compliant fuels for lowering

SUSTAINABILITY sulphur and nitrogen oxides. Enforcement is another issue, as some may decide to cheat, hoping to slip under the radar given the authorities’ lack of capacity to check all traffic within an ECA. Heading towards shipping decarbonisation, UMAS considers that “[…] product standards could, for example, specify the maximum (lifecycle) carbon content of marine fuels used and set sustainability standards for marine fuels (e.g. biofuels).”

Blending could act as a transitional solution, used already today when the questionable CO2 lowering benefit of liquefied

natural gas (LNG) is patched up by adding bioLNG (whose GHG credentials can also be controversial, especially if manure is the base source, as animal agriculture is one of the leading polluters; refuse can be used for producing bioLNG, too, though this is the function of rampant consumption and food wastage; the question is whether we turn waste into resource or don’t litter in the first place).

Authors of Closing the Gap speak in favour of direct regulatory approaches as they have proven effective and “[…] can be less cost-intensive to develop for the

regulatory body because their design is relatively simple compared to MBMs.” On the other hand, performance, technology, and product standards don’t generate revenue for recycling, which could be used to speed things up and aid a just transition.

Regulations are also prone to political pushing and shoving. It means that less affluent countries might get exemptions because they cannot afford to comply at the same pace as advanced economies. However, doing so could aggravate their situation, as older and dirtier non-compliant-otherwise fleets would be forced to serve their supply chains.

Information programmes (governance-by-disclosure / information-based governance) These are all about transparency – in the case of shipping decarbonisation, of the costs & benefits of different options.

UMAS notes, “Indeed, there has been a significant rise in focus on carbon disclosures in annual reports and ethical investing in general. This points to a need for greater information disclosure in any decarbonisation measures.”

As things stand today, there are two GHG-E information-gathering systems.

First, the IMO Data Collection System (DCS)

for ship fuel oil consumption (although its data sets are confidential). Second, the EU Monitoring, Reporting and Verifying Regulation (EU MRV) collects data on CO2 emissions from maritime transport, which are then available under the Regulation.

Closing the Gap reads that “[…] despite their important role in alleviating market failures, available evidence – both in- and outside the maritime sector – suggests that the actual impact of information policies in terms of emissions reductions is small.

Therefore, information programmes are best suited to be a complementary instrument to enhance the effectiveness of other policy measures aimed at driving shipping’s decarbonisation.” In other words, GHG-E data fit best for sharing knowledge and best practices – towards creating well-informed regulations and making sure runner-ups, often less developed players, pick the optimal solutions. Ideally, with equitable transition in mind, best practices should be distributed in an open-source way.

2/2022 | Baltic Transport Journal | 53

SUSTAINABILITY Voluntary measures These are actions undertaken by any party interested in greening the shipping industry meant to go beyond the regulatory minimum. While alone they likely won’t decarbonise the shipping sector, they are an essential driver of R&D (e.g., investments in pioneering low- or zero-emission tonnage) and demand (e.g., when cargo owners decide to use eco-friendly logistics chains only).

Since it is mostly large players with significant PR outreach that embark upon voluntary measures, they can raise awareness throughout the industry (and who knows, maybe catch the public eye, too) and encourage others to follow suit. Information

sharing is crucial as well, since other players might feel compelled to invest in a given solution as it benefits their competitors.

Yet, publicity is one thing; hard data is another. UMAS cautions in this regard, “[…] numerous studies have been critical of the role of voluntary/private initiatives in the past. […] of 23 voluntary programmes across 18 countries […] many of the programmes did not meet their target for emissions reductions, and only voluntary programmes which were tied to future regulations were generally successful in meeting their goals.”

As Naomi Klein points out in the chapter No messiahs: the green billionaires

won’t save us of her book This Changes Everything: Capitalism vs. the Climate, fighting climate change cannot be left to those who have made profits on exacerbating the problem and who might feel motivated to drive future earnings out of ‘disaster capitalism.’ Over-the-top declarations of the Bransons and Gates, coupled with underperformance of the Obamas of this world, should be taken with a pinch of salt. Better sceptical than sorry.

Then again, as reported in the previous issue when rounding up the Baltic transport highlights of 2021, there is this organic, bottom-up movement that blazes the trail.

Tab. 1. Examples of voluntary initiatives in the maritime sector Name

Date of establishment

Cargo Owners Zero Emission Vessel Initiative

2020

Overview

Under this initiative, shippers/buyers make commitments to provide a specific volume of freight to zero-emission vessel(s) and have set a target for exclusively buying zero-emission maritime freight by 2040. Shippers/buyers will also track their maritime emissions to check alignment with their goals.

Focused on improving environmental performance in marine container transport using standardised tools for Clean Cargo 2002 measurement, evaluation, and reporting.

An international organisation working to mobilise the $100tr bond market for climate change solutions by Climate Bonds promoting investments in projects and assets necessary for a rapid transition to a low-carbon and climate-resilient Initiative: Shipping 2020 economy. The Shipping Criteria provide a definition for evaluating whether a shipping project contributes to Criteria climate change mitigation.

Environmental Ship Identifies seagoing ships that perform better in reducing air emissions than required by the current emission 2011 Index standards of the IMO. This initiative is aimed at financiers and provides a framework for integrating climate considerations into lending Poseidon Principles 2019 decisions to promote international shipping’s decarbonisation.

Aims to drive ambitious climate action in the private sector by enabling companies to set science-based emission Science Based Yet to be launched reduction targets. It is a partnership between the Carbon Disclosure Project, the United Nations Global Compact, Targets Initiative the World Resources Institute, and the World Wide Fund for Nature.

Addressing charterers, this initiative provides a global framework for aligning chartering activities with responsible Sea Cargo Charter 2020 environmental behaviour to drive international shipping’s decarbonisation.

Sustainable Shipping 2010 A multi-stakeholder collective driving change through cross-sectoral collaboration to create a more sustainable Initiative maritime industry.

National & regional policy measures These are divided into ship- and landside actions. The former target the decarbonisation of both international and domestic shipping, plus inland navigation and fisheries. The latter focuses on investing in the production and supply of zero-emission marine fuels, following money put into producing renewable energy.

To stimulate lowering domestic shipping’s GHG-E, the IMO has urged its Member States to develop and update a voluntary National Action Plan. Yet, this has been met with limited success (Closing the Gap mentions that only India, Japan, the Marshall Islands, Norway, and the UK have submitted their plans).

Notwithstanding, several countries and organisations are at the forefront of implementing their own measures.

54 | Baltic Transport Journal | 2/2022

Norway, for starters, wants to reduce its domestic shipping and fisheries’ GHG-E by half by 2030. In four years, the country’s fjords will become zero-emission areas (covering not only GHG-E but also other air pollutants). Norway is also known for making strides in hybrid and battery-powered shipping.

The UK has tabled the Clean Maritime Plan, which includes encouraging the uptake of low-carbon fuels and supporting green innovation (including zero-emission propulsion technologies). The 2021 United Nations Climate Change Conference in Glasgow also saw the emergence of the Clydebank Declaration. In it, governments plan to establish ‘green corridors:’ maritime routes decarbonised from end to end, seaand land-wise. Germany has its National

Hydrogen Strategy, including works on hydrogen as a marine fuel. There is also the Pacific Blue Shipping Partnership, a multicountry initiative for a large-scale blended finance investment to facilitate Pacific island countries’ transition to zero-carbon domestic shipping by mid-century (with a 40% reduction by 2030).

The EU, apart from including shipping in its ETS, is also working on the FuelEU Maritime Regulation. It aims at stimulating the uptake of sustainable maritime fuels and zero-emission technologies. The FuelEU Maritime Regulation wants to introduce a goal-based fuel GHG-E intensity target, increasing its stringency over time, thus requiring operators to reduce the carbon footprint of the energy used onboard ships calling at EU ports. In addition, the block

SUSTAINABILITY wants to advance cold ironing, mandating that vessels berthing at EU quays draw energy from the shore (from 2030). The main bone of contention with FuelEU Maritime is whether LNG fits the sustainable fuel definition while regarding onshore power

supply – if the supplied electricity comes from renewable sources.

Authors of Closing the Gap summarise this thread by saying, “[…] these national and regional approaches may assist in the development of the market for zero-emission

fuels. In stimulating demand for these fuels on a smaller scale, the development and production of zero-emission fuels can be initially shielded from the market pressures and barriers of the wider industry before supply is scaled up over time.”

Less is more?

This article’s main body was ready ahead of the Kremlin’s aggression on Ukraine.

In a manner of just days, the world took a U-turn, and it seems that there is no turning back to pre-24 February 2022 times.

It remains to be seen what will be the war’s impact on combating climate change.

Perhaps the EU will catch the wave and transition towards a zero-emission economy faster to sever its ties with Russia’s oil & gas.

It may, however, lead to importing more shale gas from the US, extraction of which causes higher GHG-E than when using traditional methods and pollutes the areas in the drill shafts’ vicinity. It might also lessen the restrictions on fracking in Europe.

Taking in crude oil from Canadian tar sands will have an even more catastrophic effect on the environment at large.

One also gets the impression that the analysis laid forth in Closing the Gap includes an unspoken assumption, namely

that global trade will more or less continue to function in the foreseeable future as it does today. After all, as the late Mark Fisher wrote in his Capitalist Realism: Is There No Alternative?: it is easier to imagine the crack of doom than the end of capitalism.

In his disturbing yet razor-sharp essays, Fisher surfaces the dominating system’s capacity to devour initiatives seemingly at odds with it, e.g., consumers can save the environment – they ‘just’ need to make the right buys. For instance, capitalism is inherently unable to raise the question of the justness of owning a car. Rather, it lures into changing your old vehicle for a new one – this time hybrid or electric. Such “remedies,” however, cannot patch the system’s internal failure – that infinite growth is impossible when there are finite resources (in addition, redistributed upwards). It results in “glitches,” capitalism’s externalities that remind us that the larger system,

Earth, has its arsenal of countermeasures of restoring balance. As capitalism feeds on societies, there are internal glitches, too, the rising prevalence of mental illnesses, loneliness, and feeling out of place and needless, particularly scrutinised by Fisher. Cynism or hipster irony, he adds, also became part of capitalism’s toolbox – attitudes that sabotage the will to act.

Is it possible to imagine, maybe not capitalism’s fall, but less trade, although still with increasingly greener fleets? Fewer purchases, sourced locally and of higher durability? Handicraft over factory production? More refurbishment instead of wastage? Essentially, a new strenuous age that builds character and ensures an equitable future for the generations to come, say nothing of the environment, in place of instant gratification-consumerism? There are, it appears, two conflicting meanings to the saying “less is more.”

2/2022 | Baltic Transport Journal | 55

Recommendations for adjusting the FuelEU Maritime to drive true decarbonisation of shipping

The ultimate switch

by Delphine Gozillon, Shipping Officer, Transport & Environment (T&E) Making the switch from dirty to clean shipping fuels will be an uphill battle. It hasn’t started yet as the sector is still 99% reliant on fossil fuels and is responsible for about 3% of global anthropogenic emissions. But the clock is ticking; shipping is expected to contribute to the European Union’s goal of climate neutrality by 2050. Among the 14 legislative proposals of the Fitfor55 climate package discussed by policymakers, one has the potential to finally drive the uptake of sustainable marine fuels finally. But the draft law proposed by the European Commission (COM) risks the industry switching to another fossil fuel, shows one of our recent studies. The European Parliament and the EU Member States can fill the pitfalls by making crucial changes in the next few months.

I

n July 2021, COM proposed the firstever legislative initiative requiring ships to progressively switch to alternative marine fuels. It has a unique design: a goal-based greenhouse gas (GHG) intensity target, the stringency of which increases every five years, requiring ship operators to reduce the carbon footprint of the energy used onboard vessels. The target is expressed in Well-to-Wake (WTW) CO2equivalent terms to account for all the lifecycle GHG emissions (CO2, CH4, and N2O) of the different fuels and engine technologies. Figure 1 shows how GHG intensive fuels progressively cease to comply with the proposed GHG targets (expressed as thresholds of gCO2e/MJ of energy used).

Technology-neutral – ostensibly While adopting a life-cycle approach and accounting for all GHGes is undeniably an improvement compared to the existing 56 | Baltic Transport Journal | 2/2022

legislations of the International Maritime Organization (IMO), a deeper analysis of the proposal raises serious concerns about the effects of a ‘technology-neutral’ target if introduced with no safeguards.

First, the FuelEU Maritime proposal has limited ambition in the first 15 years of its application. Half the fuel GHG intensity improvements will occur under normal market conditions and/or due to shore-side electrification.

Further, requiring only 13% fuel GHG improvements by 2039 as proposed by the draft law leaves the remaining 87% of the effort to the ensuing ten years if shipping is to decarbonise by 2050, as called for by the EU Climate Law, the block and its Member States’ declarations at the 2021 United Nations Climate Change Conference in Glasgow (COP26) and within IMO. This decarbonisation trajectory would be unrealistic for any sector.

As a result, fossil liquefied natural gas (LNG)-powered vessels with 2-stroke high-pressure dual-fuel engines comply with the GHG intensity target until 2039.

They could even extend their compliance at no cost as far as 2046, with no need to even blend in bioLNG due to the possibility to indefinitely bank the compliance surpluses in the early years of implementation. This scenario would accelerate the uptake of fossil LNG in the European shipping fuel mix: from today’s 6% to 23% by 2030 (Fig. 2). Ultimately, the currently proposed ‘technology-neutral’ design favours fossil lower-carbon fuels over truly sustainable options.

Dirtier ships, cold houses?

Why is driving LNG in shipping a problem at all? Controversy is growing over the use of it as a marine fuel and its alleged environmental benefits. In a 2021 report,

SUSTAINABILITY Fig. 1. Well-to-wake carbon intensity of marine fuels (FuelEU Maritime proposal)

Source for all figures and Tab. 1: Transport & Environment

Fig. 2. The COM’s proposal would drive huge quantities of fossil LNG and biofuels

the World Bank explicitly called on regulators to avoid any policy support to LNG in the maritime sector, including labelled as a so-called transitional fuel, due to the risk of stranded assets it creates. Many other studies show that LNG has marginal GHG benefits over existing marine fuels.

Moreover, depending on the engine, LNG can even have a worse climate impact than the bunker it is supposed to replace.

Secondly, incentivising demand for LNG use in shipping is a danger to the climate. It can put energy security at risk, as Europe is urgently trying to diversify its gas supplies. Increasing volumes of LNG shipped as cargo is different from driving demand for LNG as a fuel to power ships. The former contributes to energy security, whereas the latter undermines it.

Today, LNG is crucially needed for replacing gas supplies from Russia and ensuring European homes are heated next winter and the following years. In the light of this new context, driving further demand for LNG in a sector that did not rely on it would be playing with fire. Policymakers must seriously reconsider this.

Although there is no simple solution to limit the excessive growth of fossil LNG under the current design, stricter GHG targets would undoubtedly help set the compass to zero-emission shipping by 2050.

2/2022 | Baltic Transport Journal | 57

SUSTAINABILITY Tab. 1. T&E’s recommendations for revising FuelEU Maritime’s GHG target levels

58 | Baltic Transport Journal | 2/2022

-6% (86.2 gCO2e/MJ) -13% (79.8 gCO2e/MJ) -26% (67.9 gCO2e/MJ) -59% (37.6 gCO2e/MJ) -75% (22.9 gCO2e/MJ) -100% (0 gCO2e/MJ)

Fig. 3. E-fuel uptake pathway for the EU1 1,600

1,400

6% by 2030

1,200

1,000

800

600

400

200

2050

2048

2046

2044

2042

2040

0

2038

Pay-to-comply Decisions being taken now by EU policymakers will reverberate throughout the next decade. Waiting for the sector to ‘choose’ the right fuel is no option if shipping is to become decarbonised by 2050. By the time of the next review, the window of opportunity to launch necessary investments runs the risk of closing.

There has probably never been a better moment for the shipping industry to invest in sustainable fuels and technologies. The prices of fossil fuels are skyrocketing, which should push companies to shift away from fossil. At the same time, shipping revenues climbed to record high levels in 2021 due to post-Covid demand.

Yet, there was no boom of investments in e-fuels: renewable fuels produced from green hydrogen that deliver deep and long-lasting emission reductions. Many barriers stand in the way of e-fuel development in shipping. They will struggle to find their way into the sector without dedicated requirements and incentives to support their uptake.

The FuelEU Maritime proposal lacks the appropriate tools and even disincentivises their use. Compliance with the GHG target can be achieved with much cheaper fossil fuels despite their limited GHG savings – or with biofuels that are immediately available off the shelf but are not scalable for the entire industry. Furthermore, companies can be exempted from compliance with the GHG intensity targets against a simple penalty payment. Paying annual fees might be cheaper for shipowners than making real investments in zero-emission vessels – and much less risky. This pay-to-comply

-2% (89.9 CO2e/MJ) -6% 86.2 gCO2e/MJ) -13% (79.8 gCO2e/MJ) -26% (67.9 gCO2e/MJ) -59% (37.6 gCO2e/MJ) -75% (22.9 gCO2e/MJ)

2036

Incentives for hydrogen-based energy carriers would ensure a minimum switch to truly sustainable fuels in this decade.

T&E’s recommendation

2034

2050

COM’s proposal

2032

2045

2030

2040

2028

2035

2026

2030

2024

2025

2022

2020

reduction + effect of onshore Business as usual (BAU) reduction BaU power supply mandate 91.7 gCO2e/MJ -0.4% -0.9% (91.4 gCO2e/MJ) (90.9 gCO2e/MJ) -1.2% -2.9% (90.6 gCO2e/MJ) (89.0 gCO2e/MJ) -2.6% -4.3% (89.4 gCO2e/MJ) (87.8 gCO2e/MJ) -4.2% -5.8% (87.9 gCO2e/MJ) (86.4 gCO2e/MJ) -5.4% -6.9% (86.9 gCO2e/MJ) (85.4 gCO2e/MJ) -5.8% -7.3% (86.5 gCO2e/MJ) (85.0 gCO2e/MJ)

e-fuel in EU shipping (PJ)

Target year

e-fuel supply/demand balanced 1

T&E analysis which uses e-ammonia as a “placeholder” for calculations. This does not prejudge other e-fuels uptake by ships. Analysis assumes no regulatory-driven energy efficiency gains by the sector until 2050 and full shore-side electricity use by all vessels at berth. Energy density of e-ammonia: 18.6MJ/kg.

mechanism should be removed, or at least limited in time, especially since underperforming ships can use f lexibilities (i.e. “pooling compliance”) before paying the fine. Raising the level of the penalty would also help reduce the risk of non-compliance.

The best chance The FuelEU Maritime must mandate a clear pathway to zero-emission shipping by 2050. Advancing the GHG targets’ ambition by five years would have the advantage of starting the necessary fuel

switch from the entry into force of the first target while setting a progressive and realistic trajectory for European shipping to achieve zero-emission by mid-century.

Overall, it would increase GHG emission savings by 478mt CO2e over the 2025-2050 period, compared to the COM’s proposal (Tab. 1).

The EU’s best chance to set shipping on track to decarbonisation is likely to target a minimum percentage of green e-fuels. This solution has been the approach of the Renewable Energy Directive for years, and the EU’s aviation

SUSTAINABILITY Fig. 4. Combined e-fuel incentives and stricter targets could drive modest e-fuel uptake with reduced compliance costs in 2020

fuel initiative proposed in the same climate package as the FuelEU Maritime also targets a minimum share of e-kerosene in the mix.

For shipping, T&E recommends a mandate of 6% of the energy demand used by ships by 2030. Volume-wise, this would represent 85PJ of e-fuels under the proposed geographical scope of the FuelEU Maritime, which the sector could absorb with natural tonnage renewal. According to its 2020 Hydrogen Strategy, the EU already plans to produce 10mt of green hydrogen by 2030. If a 6% e-fuel mandate was introduced, the shipping industry would need just 20% of Europe’s domestic production. It sounds reasonable for a sector identified in the EU Hydrogen Strategy as hard to decarbonise.

Setting an e-fuel mandate would not prejudge the propulsion technology ships should be using. E-fuels are typically produced from renewable hydrogen, and multiple derivatives exist beyond the direct use of e-hydrogen: e-ammonia, e-methanol, but also e-diesel or e-methane. In other words, the mandate would respect the principle of technological neutrality at the heart of the FuelEU Maritime regulation while promoting

in the mix genuinely sustainable fuels.

It would apply in parallel with the GHG intensity targets and be met by ships thanks to using the compliance pooling system at the f leet level.

Last but not least, companies investing in e-fuels should be generously rewarded whenever they overachieve the minimum 6% target. This is where incentives come in, such as applying a multiplier. Should policymakers choose to introduce one on e-fuels – as recommended by the COM’s impact assessment – any GHG saving unit from e-fuels use would be counted several times. T&E recommends a multiplier of five, whereby e-fuels would become about five times cheaper when complying with the GHG targets.

To further boost their cost-competitiveness, only vessels running on e-fuels should benefit from banking and pooling their compliance surplus with other companies instead of any fuel type in the draft legislation. This approach would allow progressive companies to immediately deploy zero life-cycle e-fuels and lend/sell their surplus credits to other vessels/companies.

Multiplier and pooling incentives can help e-fuels catch up with other

alternatives, such as biofuels. They could even make overall compliance costs cheaper than the current COM’s proposal if GHG targets get stricter (Fig. 4).

Looking for the summer When it comes to decarbonisation challenges, including the cost and availability of sustainable fuels, shipping probably stands today where the road transport sector was some years ago. Electric cars were emerging on the market, say nothing of their limited use as finding a charging point was like looking for a needle in a haystack. The game changed when European CO2 standards for car manufacturers were introduced in 2020. All of a sudden, electric cars started conquering Europe’s roads. Early movers such as Tesla reaped the benefits thanks to a multiplier and a pooling system while driving the whole sector towards electricity.

For such a switch to happen in shipping, FuelEU Maritime will have to be fixed and target the ultimate fuels. The EU Member States are already discussing this, intending to take a position on 2 June 2022. September will likely bring a vote to the EU Parliament.

Created over 30 years ago, the Transport & Environment (T&E) NGO has shaped some of Europe’s most important environmental laws: we got the EU to set the world’s most ambitious CO2 standards for cars and trucks; campaigned successfully to end palm oil diesel, secure a global ban on dirty shipping fuels, create the world’s biggest carbon market for aviation, and make Uber commit to electrifying much of its European operations; we’ve also helped uncover the Dieselgate scandal. Head to www.transportenvironment.org to discover our vision of an affordable zero-emission mobility system with a minimal impact on our health, climate, and the environment.

2/2022 | Baltic Transport Journal | 59

The EU’s proposal on waste shipments can level the playing field for South Asian ship recycling yards

A significant step forward

by Steve Marshall The sustainable ship recycling consultancy, Sea Sentinels, believes the proposed changes to the EU’s Waste Shipment Regulation (WSR) will bring “legal clarity” on hazardous waste exports that will benefit South Asian ship-breaking yards seeking compliance with EU recycling standards.

S

hips sold for recycling at the end of their lifetime contain dangerous substances such as asbestos and mercury. They also hold toxic chemicals like oil, fuel, and ballast water that constitute a risk to human health and the environment if they are not managed and disposed of properly.

Exports of hazardous waste to nonOECD countries in EU-flagged ships sent for recycling are banned under the Basel Convention on transboundary shipments of such waste. The ban is transposed into the EU Ship Recycling Regulation (EUSRR) that requires ships to be recycled at EU-compliant yards on an approved list.

But this has not prevented some shipowners from circumventing the so-called Basel Ban by selling ships to cash buyers who then rename these vessels and switch them to flags of convenience.

Assuming responsibility By using cash buyers as middlemen, shipowners can obtain higher steel prices for scrap tonnage while theoretically avoiding legal, financial, and other risks when selling their old vessels for dismantling. It means that formerly EU-flagged ships end up at yards not listed as EU-approved. Once there, they may be dismantled in a manner that poses the risk of toxic spills and other types of pollution to coastal ecosystems, say nothing of the health hazards to workers.

Countering this trend, the Singaporebased Sea Sentinels has taken responsibility 60 | Baltic Transport Journal | 2/2022

for supervising many successful sustainable ship recycling projects in South Asian and other yards that have ensured safe disposal of hazardous waste in documented compliance with regulations.

The consultancy’s Chief Executive Rakesh Bhargava believes the EU’s proposed amendment to the WSR would, if approved, represent “a significant step forward” as it would strongly incentivise continued improvements at these yards to gain EUSRR compliance. The proposal would impose stricter rules on hazardous waste exports to non-OECD countries to assure that facilities receiving this waste have been audited and can manage it sustainably.

Obstacles to progress Importantly, this amendment distinguishes between EU-flagged ships on which the decision to recycle is taken in- or outside EU territory – basically allowing for those sold for scrap outside the bloc to be recycled at non-OECD facilities provided they are on the list of EU-compliant yards.

EU policymakers are now set to discuss the proposal over the next few months, with a vote due by year-end on the WSR amendment that would also result in changes to waste shipment rules under the EUSRR if ratified. The European Community Shipowners’ Association (ECSA) is lobbying strongly in favour of the amendment. The organisation believes it would resolve a legal anomaly whereby nonOECD yards cannot receive EU-flagged

ships for recycling – even if they are fully EU-compliant – due to the Basel Ban. Danish Shipping’s Executive Director for Climate, Environment and Security, Maria Skipper Schwenn, has characterised the present situation as “a legal mess creating obstacles to progress on sustainability in this industry.” Given the lack of global regulation, the situation is pressing as the International Maritime Organization’s Hong Kong Convention (HKC) on safe and environmentally sound ship recycling has still not entered into force.

Legal clarity Bhargava says: “The EU proposal would bring much-needed legal clarity to what has been a long-standing murky issue on the export of hazardous waste to ship-breaking yards in non-OECD countries.” He furthers, “A number of non-OECD yards, especially in Alang, India, have made significant progress towards EU compliance by upgrading their facilities in line with the required health, safety and environmental standards. It is important that these are able to compete on a level playing field with European yards given that around 70% of ship tonnage recycled worldwide is already dismantled at South Asian yards.”

Sea Sentinels’ Chief Exec also observes, “Furthermore, there is a lack of capacity for recycling of larger ocean-going ships at yards on the EU-approved list, so it is imperative that South Asian yards continue

SUSTAINABILITY

Photo: Sea Sentinels

to have an incentive to gain compliance for inclusion on the list.” BIMCO’s SecretaryGeneral David Loosley backs up this opinion, stating in a report on the EU list: “The capacity required for the large EU-flagged fleet simply isn’t there, which is especially evident when it comes to recycling Panamax-size and larger ships in accordance with the EU regulation.”

Only a fraction The current EU list of 41 recycling facilities comprises mainly European yards.

Most of them are constrained in terms of length and draft of the vessels they can handle and are primarily engaged in more profitable offshore/military decommissioning or repair and conversion work. Several Turkish yards on the list offer only limited additional capacity as they are busy with recycling non-EU-flagged cruise ships, according to BIMCO. In addition, the organisation says, “prices for steel at European yards are not competitive and commercially unviable.”

The ECSA states in a position paper on the WSR proposal that yards on the EU list “cover only a fraction of the capacity needed to recycle all end-oflife EU-f lagged vessels worldwide.” The Association is calling for the adoption

of the amendment to promote progress in recycling in third countries, level up standards and improve working and environmental conditions in these states – a key objective of the EUSRR – that could also lead to them ratifying the HKC. Considering the above, Bhargava says that, due to the lack of EU-compliant recycling capability, owners of larger EU-flagged vessels are often left with no alternative than to have these re-flagged so they can be sent to South Asian yards that have the required capacity.

Broadening the focus According to Bhargava, on-site supervision and monitoring of the recycling process by an independent third party with the requisite expertise are therefore essential to enforce regulatory requirements and ensure documented compliance for the shipowner, regardless of location.

Sea Sentinels provides supervision on the ground with an expert team monitoring

every step of the recycling process to achieve compliance with both the EUSRR and HKC and a mandatory inventory of hazardous materials in line with the Basel Convention.

As a result, the company boasts zero accidents and no pollution on numerous sustainable recycling projects carried out at yards in India and Turkey.

“From an environmental perspective, a lot of the focus in shipping is currently on reducing greenhouse gas emissions from operating ships. But equally important is the need to manage hazardous waste disposal for end-of-life vessels to prevent pollution to coastal waters and ecosystems,” Bhargava says.

He concludes, “As well as posing a risk to the environment, irresponsible waste disposal practices can result in a reputational risk to the business of the shipowner.

Therefore, having a sustainable ship recycling policy with reliable, low-cost supervision and enforcement represents a commercial advantage in the long run.”

Sea Sentinels is a leading maritime consultancy incorporated in Singapore that empowers safe and sustainable ships and offshore assets recycling. The company provides a broad range of high-quality, reliable, and innovative services for the maritime industry, including expert supervision and documentation, inventories of hazardous materials, advisory and implementation services for safe lay-up of vessels and offshore units, and ship audits/inspections. Go to www.sea-sentinels.com to learn more.

2/2022 | Baltic Transport Journal | 61

REPORT

Baltic port market in 2021

by Marek Błuś Last year made breaking the region’s freight port traffic 900 million tonnes ceiling again possible – by a hefty 13mt. With 342.79mt (+8.8% year-on-year), the general cargo market explicitly dethroned liquid bulk as the Baltic’s leading trade. The turnover of dry bulk also rose, albeit by a modest 1.6% yoy to 257.26mt.

On the other hand, less liquid goods went through the regional seaports’ jetties, down 1.8% yoy to 312.88mt (so a noticeable negative of 29.91mt behind general cargo). Most certainly, the figures for 2022 will be a completely different story, given the impact of the sanctions against Russia because of its aggression on Ukraine. The mythical one billion tonnes mark has once more hidden itself in the darkness of the future.

2/2022 | Baltic Transport Journal | 63

REPORT Tab. 1. The Baltic Sea region’s ports’ cargo turnover in 2020-2021 (thousand tonnes)1

1

№

Country

2021

2020

yoy

Share 2021

Share 2020

1 2 3 4 5 6 7 8 9

Russia Sweden Finland Poland Denmark Germany Lithuania Latvia Estonia Total

258,580 168,181 103,727 96,680 94,255 60,626 49,751 41,731 39,404 912,935

241,481 167,594 109,948 88,520 91,271 54,052 51,529 44,928 37,688 887,011

+7.1% +0.4% -5.7% +9.2% +3.3% +12.2% -3.5% -7.1% +4.6% +2.9%

28.32% 18.42% 11.36% 10.59% 10.32% 6.64% 5.45% 4.57% 4.32%

27.22% 18.89% 12.40% 9.98% 10.29% 6.09% 5.81% 5.07% 4.25%

Share 2021-share 2020 [pp] +1.10pp -0.47pp -1.03pp +0.61pp +0.03pp +0.55pp -0.36pp -0.49pp +0.07pp

All tabs.: only Russian and German Baltic ports; all Danish ports

Tab. 2. The Baltic Sea region’s ports’ general cargo turnover in 2020-2021 (thousand tonnes) №

Country

2021

2020

yoy

Share 2021

Share 2020

1 2 3 4 5 6 7 8 9

Sweden Russia Finland Germany Denmark Poland Estonia Latvia Lithuania Total General cargo’s share of total

83,652 48,850 44,207 43,297 40,520 38,520 17,984 13,352 12,410 342,792 37.55%

78,979 46,162 43,713 37,446 37,850 35,640 12,015 12,362 10,949 315,116 35.53%

+5.9% +5.8% +1.1% +15.6% +7.1% +8.1% +49.7% +8.0% +13.3% +8.8% +2.02pp

24.40% 14.25% 12.90% 12.63% 11.82% 11.24% 5.25% 3.90% 3.62%

25.06% 14.65% 13.87% 11.88% 12.01% 11.31% 3.81% 3.92% 3.47%

Photos: Canva

64 | Baltic Transport Journal | 2/2022

Share 2021-share 2020 [pp] -0.66pp -0.40pp -0.98pp +0.75pp -0.19pp -0.07pp +1.43pp -0.03pp +0.15pp

REPORT Tab. 3. The Baltic Sea region’s ports’ liquid bulk turnover in 2020-2021 (thousand tonnes) №

Country

2021

2020

yoy

Share 2021

Share 2020

1 2 3 4 5 6 7 8 9

Russia Sweden Poland Finland Denmark Lithuania Estonia Latvia Germany Total Liquid bulk’s share of total

134,608 56,968 29,560 28,000 22,985 14,941 13,770 8,824 3,224 312,880 34.27%

128,659 60,197 22,460 35,800 24,351 16,909 15,630 11,683 3,057 318,746 35.93%

+4.6% -5.4% +31.6% -21.8% -5.6% -11.6% -11.9% -24.5% +5.5% -1.8% -1.66pp

43.02% 18.21% 9.45% 8.95% 7.35% 4.78% 4.40% 2.82% 1.03%

40.36% 18.89% 7.05% 11.23% 7.64% 5.30% 4.90% 3.67% 0.96%

Share 2021-share 2020 [pp] +2.66pp -0.68pp +2.40pp -2.28pp -0.29pp -0.53pp -0.50pp -0.85pp +0.07pp

Tab. 4. The Baltic Sea region’s ports’ dry bulk turnover in 2020-2021 (thousand tonnes) №

Country

2021

2020

yoy

Share 2021

Share 2020

1 2 3 4 5 6 7 8 9

Russia Finland Denmark Poland Sweden Lithuania Latvia Germany Estonia Total Dry bulk’s share of total

75,122 31,520 30,750 28,600 27,561 22,400 19,555 14,105 7,650 257,263 28.18%

66,660 30,435 29,070 30,420 28,418 23,671 20,883 13,549 10,043 253,149 28.54%

+12.7% +3.6% +5.8% -6.0% -3.0% -5.4% -6.4% +4.1% -23.8% +1.6% -0.36pp

29.20% 12.25% 11.95% 11.12% 10.71% 8.71% 7.60% 5.48% 2.97%

26.33% 12.02% 11.48% 12.02% 11.23% 9.35% 8.25% 5.35% 3.97%

Share 2021-share 2020 [pp] +2.87pp +0.23pp +0.47pp -0.90pp -0.51pp -0.64pp -0.65pp +0.13pp -0.99pp

2/2022 | Baltic Transport Journal | 65

BPO’s EP Debate: the impact of EU’s sanctions, the block’s climate policy, and plans to lessen the dependence on Russian energy

by Andrzej Urbaś, Communication Manager, BPO The Baltic Ports Organization’s (BPO) annual debate held at the European Parliament (EP) tackled the impact of the war in Ukraine and the plans to reduce dependency on Russian energy sources in the context of possible consequences for the Baltic and European port industry. Also discussed was the inclusion of shipping in the EU Emissions Trading System (EU ETS) and the risks it entails for the continued competitiveness of the sector.

T

he meeting kicked off with the topic that currently dominates everyone’s thoughts. In the opening speech, Kimmo Naski, Chairman (BPO), once again underscored the deep sorrow and worry for the life and wellbeing of the Ukrainian people expressed by the whole Baltic community. While everyone unites in the hope of a quick end to the hostilities, the maritime industry cannot ignore the geopolitical and economic impact. Supply chains are being disrupted in Europe and globally, and business ties are being cut. The geopolitical shifts we are witnessing will have long-term consequences, some of which we can’t even yet identify.

As MEP Andris Ameriks observed: while the turnover numbers looked well in multiple Baltic ports in the first months of 2022, it is vital to remember that many of the sanctions are yet to take effect, and the full impact of the war is yet to become clear. Uncertainty is the enemy of long-term investments, added Isabelle Ryckbost, Secretary-General of the European Sea Port Organisation, during the meeting.

The current geopolitical situation only contributes to a certain feeling of unpredictability in the maritime industry, caused by a plethora of environmental initiatives put forth by the European Commission (COM). They often include obligations, which, without careful consideration and due to the present geopolitical shifts, may greatly impact the port sector’s competitiveness in Europe. The participants took an in-depth look at parts of two such initiatives, the Fit for 55 package and the European Green Deal (EGD).

Inclusion of shipping in the ETS

The inclusion of maritime shipping in the EU ETS, as part of the Fit for 55 package, introduced by the COM last year, was the topic second only to the one mentioned above.

Timothée Noël, Policy Officer (DG CLIMA), briefly outlined the main reasons for this step and its benefits. The former included the proposal being an essential step on the EU’s path 66 | Baltic Transport Journal | 2/2022

to becoming the world’s first climate-neutral continent by 2050, an ambition impossible without drastic greenhouse gas emission cuts, and it being in line with the block’s Paris Agreement commitments. Noël also emphasised that without direct measures, the already significant amount of emissions from the shipping industry is only bound to increase, as well as the fact that EU ETS-generated revenue will be used to support innovation and development of new technologies required for hitting the emission reduction goals.

While the BPO fully supports the COM in its efforts to combat climate change and the overall scope of the Fit for 55 package, it quickly became apparent that some points, such as the one outlined above, require further consideration. The main risks related to the inclusion of maritime shipping in the EU ETS are evasive port calls and modal shifts, which ultimately may lower the competitiveness of European ports. The COM promises to monitor how the market implements this policy and believes that it is not possible for the EU ports to suddenly lose the majority of their cargo due to its introduction. While the latter is technically true, it is critical to remember that any business, once lost, will be tough to reacquire, even after the regulations change reactively as an effect of the monitoring process. And it is only prudent to assume that non-EU ports are watching the situation closely and preparing to seize any opportunities it may offer them.

The right way to go about shore power

Participants of the debate also shared various insights regarding some other proposals introduced as part of the Fit for 55 package, such as the obligation for ports to provide onshore power supply (OPS) facilities to berthing vessels.

Given the cost of OPS implementation, there is a need for further discussion between the industry and policymakers to channel these efforts to ports that will most benefit from the overarching goal of emission reduction. Simply put, money has to go where it is needed most.

OPS technology is vessel- and port-specific; solutions vary within a specific vessel type, not just cross-type. Additionally, more thought needs to be given to the sufficient supply of necessary grid capacity. Given the current lack of coordination between energy-related proposals and the OPS one, as noted by Bogdan Ołdakowski, Secretary-General (BPO), a more transparent dialogue is paramount to maximise the proposal’s effectiveness.

And speaking about money, it goes without saying that a great deal of the uncertainty mentioned earlier could be alleviated by a decisive and transparent assurance of sufficient public funding, without which most of the goals and obligations making up the various climate initiatives won’t be possible to fulfil.

Way forward

It is impossible to foresee how the war in Ukraine and associated geopolitical turmoil will affect the pace of implementation of initiatives like the EGD and Fit for 55. Parts of the proposal will definitely be heavily discussed in the EP in the coming weeks and months. As for now, the way forward is to try and adapt to the new situation, carry on with the plan and accomplish various goals where it is most feasible.

One of the most crucial issues to tackle soon will be Europe’s energy policy, supply and diversity of energy sources. The recent REPowerEU proposal, focused on reducing the EU’s dependence on Russian fossil fuels, seems to have come just moments before becoming drastically more important. The first step will be changing gas suppliers, with plans to source liquefied natural gas (LNG) from the US and Qatar. Renewable fuels, such as hydrogen and ammonia, will come next, with bioLNG possibly used as an interim solution.

The shift from fossil to renewable fuels will create new opportunities for ports, likewise challenges. They will need to find new revenue sources for the ones lost. They may very well become hubs for green energy, but the path leading there must be carefully trodden.

FREQUENTIS MARITIME Regal House, 70 London Road, Twickenham London TW1 3QS, UK www.frequentis.com/en/maritime mike.roberts@frequentis.com

Frequentis joins the BPO

by Andrzej Urbaś, Communication Manager, BPO The Baltic Ports Organization (BPO) is thrilled to announce that Frequentis has become a new member of its family.

Providing communication and information solutions for the maritime sector (and many more beyond that), this new addition to our Member pool further expands BPO’s potential in a field of ever-increasing importance.

In a nutshell Headquartered in Vienna, the Austrian company is a global supplier of communication and information for control centres with safety-critical tasks. Their solutions are meant for various business sectors, such as air traffic management (civil and military air traffic control, air defence) and public safety & transport (police, fire brigades, ambulance services, shipping, railways).

Solutions provided by Frequentis increase mobility and digitalisation and raise the safety and security requirements, factors essential for driving long-term growth.

The company has a long-standing tradition of working with Nordic and Baltic countries, spanning over 20 years. Their solutions have been implemented in Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Sweden, and many more.

1st

worldwide

IP network with audio delay compensation

Shore-based AIS network

TCC tactical communications chart

Enhancing 2 decades > 20% 37% efficiency, safety and security World’s largest 7 Seas 25,000,000 Frequentis Maritime 5 Continents coastline solutions leverage almost two decades of Largest 8,000,000 18,000,000 experience within the maritime market and six decades in air traffic control. With deep with both large and small organisations. cross-industry expertise in aviation, defence, We are very keen to be involved with the public transportation and public safety, the BPO and, if possible, bring some help and Maritime business unit provides functional- advice around critical communications ity that supports the needs of today’s surveil- and vessel tracking. We are also at the cutlance, rescue coordination, coastal radio and ting edge of autonomous vessels, providing traffic management. the critical communications and tracking of the vessel. We’re eager to work with Core mission other BPO Members and look forward to Providing actionable intelligence that meeting you as soon as possible,” said Mike enables faster decision making is the pri- Roberts, Head of Innovation Maritime, mary goal of Frequentis’ Maritime team of Autonomous Vessel Lead at Frequentis. experts. The dissolving of physical borders The company has also recently won funding that currently define what is understood for a project set to impact the UK maritime as a control centre will be critical as search industry positively. Frequentis will be delivand rescue, broadband radio communica- ering on a vital workstream of the Shipping tions and traffic management evolve to and Port Interfaces in New Era (SPINE) proIP-based technologies. ject to support the ambition to open all UK “Frequentis are world leaders in control waters to the testing and commercial operaroom solutions and work across all public tion of autonomous shipping. "Our expersafety globally. Even though Maritime is tise in control room communications was a small part of Frequentis, we cover 75% of a key factor in being selected for this project, the world seas and have a wide and varying and puts us at the cutting edge of maritime customer base, from the Norwegian and autonomy as the world moves from voice Canadian coastguard to Ports of Jersey and communications to machine communicaNavy, showing we can work and partner tions," said Roberts about the endeavour.

1998

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of experience in safety and mission critical maritime solutions

of all ships at sea at any given moment connected to a Frequentis system

of the world's oceans are managed safely with Frequentis technology

operational hours with VCX-IP

equipped with Frequentis technology

tons of cargo

cargo port in the world

passengers travelled safely with Frequentis in 2015

50_MAR_Info_0820

D

igitalisation is a process affecting nearly every industry, with the maritime sector being no exception. BPO has kept close tabs on this process by organising various digitalisation-focused events and founding our Digitalisation Working Group.

Frequentis’ addition to our Member pool comes on the heels of Awake.AI’s decision to join the Organization. We are convinced that both companies will greatly benefit our Members and contribute to their continued competitiveness.

Maritime communication solutions for a safer world

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 2/2022 | Baltic Transport Journal | 67

Visy’s Automatic Damage Detection System (ADDS)

First of its kind

by John Lund, Sales and Marketing Director (Global), Visy Oy Aspects of science fiction films from the 1980s and 90s are becoming a reality in the modern container terminal.

Some 20 years ago, vision technology in terminal operations was limited to optical character recognition (OCR) for container code recognition (CCR) and license plate recognition (LPR; also referred to as automatic number plate recognition, ANPR, depending on your geography). The game-changer in vision technology occurred in 2013 with the advent of dynamic neural networks (DNN). Long story short, using a DNN provides a faster, more efficient, and more accurate way to extract data from images using deep learning techniques. The benefit for the industry is that virtually everything that you photograph can be automatically digitised and therefore used as a basis for process automation. The latest application for container terminals, and those interested in a container’s condition, comes in the form of Visy’s Automatic Damage Detection System (ADDS), the first system of its kind.

I

t is safe to say that the issues surrounding damaged containers cost the industry billions of dollars per year. Broken boxes lead to spoiled cargo, and containers with severe structural damage present safety problems.

Indeed, a container full of waterlogged iPhones, or one with warped corner posts that causes a stack to collapse, will evoke a ripple effect of insurance claims, angry customers, delays, and safety concerns.

As a result, many container terminals have created processes to manage damaged cargo. However, until recently, those processes have been manual and therefore labour-intensive, slow, error-prone, and unpredictable despite management’s best efforts. Today, damage inspection is automated through ADDS. This process automation improves the terminal’s key performance indicators (KPIs), including truck turnaround times, lifts per hour, and profitability.

Container terminals use OCR camera systems to identify assets entering or exiting the facility via road, rail, or quay to improve KPIs. The common industry terms for these solutions are gate operating system (GOS) 68 | Baltic Transport Journal | 2/2022

with OCR for trucks, train GOS for rail operations, and crane OCR for quayside movements. These deployments all utilise vision technology to collect event data (box ID, seal presence, door direction, hazardous goods labels, etc.) and share it with thirdparty systems such as the terminal operating system (TOS).

The same camera systems can now be upgraded to include the ADDS feature through a simple software add-on. For example, as a truck drives through an OCR pre-gate portal and images are taken to identify the box number, the same camera system now tells the operator if the box is damaged, shows where the impairment is and specifies the damage type. Afterwards, it is up to each operator how they want to use this new, digitised data.

Quayside operations As boxes enter the terminal via shipto-shore gantries, images are taken of all visible sides by the crane OCR system.

Cameras are typically located in the spreader and on the crane’s frame. As the spreader grabs the box(es), Visy’s TopView application (i.e., spreader OCR system)

captures images of the roof and uses those images for CCR, twin-20’ detection, and ADDS. The operator receives confirmation of the box IDs even before offloading, thus preventing wrong moves. As the containers move into the exchange area, the frame cameras capture images of each box’s long and short sides. These images are also used for automatic data processing, not least the box ID, ISO code, door direction, hazardous goods labels, tare weight, seal presence, and damage detection. Before the cargo touches the ground, the operator knows everything about it, including its condition. The information is digitised and shared with the TOS, meaning that exceptions, such as the lack of seal or extreme damage, are promptly managed. Perhaps the operator changes a work order so that a box goes to the maintenance & repair (M&R) centre and then updates the shipping line. With digitised data, previously inconceivable levels of automation become the standard.

The same data are used during loading operations. When a box is picked from the quay, all relevant information is captured, including its state. In this case, the

TECHNOLOGY

Photos: Visy Oy

terminal automatically collects and shares the standard OCR features, such as the box ID, but also confirms that the box is fit for sea travel. An equipment interchange receipt (EIR) can be automatically created and shared with the shipping line using the digitised data codes. Additionally, the terminal verifies that the box was in the same condition when it entered the terminal, refuting potential damage claims.

data are acquired. The cargo is matched with the truck and work order, and the damage condition is determined. If the cargo is unfit for road travel, or some other discrepancy exists, the truck will be prohibited from leaving the terminal as an exception handling event. If there are no discrepancies, the truck will go, and the terminal has evidence that the assets were in acceptable condition when exiting the facility.

Truck gates Before trucks and cargo arrive at the main gate, they typically drive through an OCR pre-gate portal. Depending on the operation, the portal is equipped with lights and cameras to capture high-resolution images for the OCR processes. The data extracted from the images will be similar to that utilised in quayside operations, save for apparent differences like truck license plates instead of terminal tractor ID, etc.

Again, using a single set of images from the OCR portal, ADDS will find damage on the cargo, digitise the result, and create an exception handling event if required.

Because the damage condition is digitalised, the work order can be automatically changed, and the container can be rerouted to the M&R centre if warranted by its state.

Much like the in-gate process, the outgate process can be automated with ADDS. As the truck drives through the out-gate OCR portal, hi-res images are taken before reaching the main gate area, and all relevant

Rail operations Like the truck pre-gate portals, rail tracks can be equipped with train GOS OCR portals to collect and share data in a variety of train operations. The train OCR portals work with double-stacked, dual-track, and bi-directional operations as the site requires. As the train travels through the portal, cameras capture hi-res images of the wagons and cargo to extract and share relevant data such as the box and wagon IDs and the composition.

The data are shared with the TOS and compared to the expected composition.

Exception handling events are created in the system for box/wagon discrepancies and damaged cargo alike. If a box

is damaged upon arrival, the information can be automatically shared with a third-party system before the terminal even offloads it. Similarly, as the train is departing, the OCR portal will verify that the boxes are in acceptable condition when they leave the facility.

Only the beginning of a new era Visy ADDS automatically digitises the condition of shipping containers. This tool presents a massive opportunity for operators and the industry alike. The ability to automatically know the condition of a box as it arrives at a terminal would have qualified as sci-fi only two decades ago.

Today, operators can utilise deep learning technology to automate processes, provide better customer services, and make prudent business decisions.

Sharing damaged cargo data with thirdparty systems like the TOS, creating a website for customers, or automatically generating and sending EIR reports are only the beginning of this new era in terminal automation. It will be amazing to see where vision technology takes the industry after another 20 years of development.

Visy provides process automation ecosystems to manage the flow of traffic, cargo and personnel in transportation hubs and logistics centers.

Every asset that goes in or out of a facility, whether by road, rail or quay, can be managed by Visy technology. Using vision technology and other data collection tools, Visy ecosystems manage more than 5,000,000 automation tasks per day in over 25 countries. Visit www.visy.fi to learn more.

2/2022 | Baltic Transport Journal | 69

Why accountability in bunkering is required to create greener supply chains

In technology’s trust

by Jonathan Arneault, CEO, FuelTrust The marine fuel sector is historically opaque in its operations. Fuel users and suppliers often lack the information they need to understand the history and complete make-up of the products they handle. However, knowing how a fuel will combust in an engine is key to understanding how a vessel performs and the emissions it will produce. The lack of accurate information about fuel provenance and quality hinders day-to-day operations for individual organisations, likewise the delivery of the industry’s future environmental and sustainability goals. Here is how this information can be put into the hands of shipowners and bunker suppliers.

Q

uality and fraud issues are well known in the bunker industry and frequently accepted by vessel operators as an unavoidable cost of doing business. Discrepancies in the quantity of fuel delivered during bunkering are often overlooked, even though deliveries can be up to 3% less than that stated on the bunker delivery note (BDN). These lowtransparency transactions tot up to billions of dollars lost by shipping each year.

In addition, the industry faces its biggest challenge – tackling climate change by meeting the shipping industry’s decarbonisation and the wider sustainability targets. Shipping is being pushed to be more transparent and open by regulators and inf luential stakeholders calling for the sector to deliver greater (environmental, social, and governance) accountability. For instance, nearly 50% of the 70 | Baltic Transport Journal | 2/2022

global ship finance portfolio comes from signatories to the Poseidon Principles, which set strict finance access criteria for shipowners and operators and, therefore, their ability to operate.

The Poseidon Principles and all emissions trading and credit methods currently measure vessel emissions using government guidelines based on generalised calculations: a one-size-fits-all approach formulated to simplify enforcement. They overlook the range of different engine types and how operations and maintenance decisions might influence their performance. At a vessel level, emissions are estimated using manufacturer specifications and ranges classified by fuel type and grade. The resulting figure is only a rough approximation of the emissions of a vessel.

Calculating ship emissions using these broad-brush methods results in vessel

owners and operators being charged or taxed too much relative to their actual emissions – even if they have taken actions to improve their performance.

Breaking the fuel DNA code FuelTrust uses Artificial Intelligence (AI) and blockchain-enabled technology to authenticate relationships across the marine fuel life-cycle to provide more accurate fuel and emissions tracking. This approach allows users to create a decentralised, immutable store of information – a single shared source of truth, if you will, recording the fuel’s life-cycle. In this way, we eliminate the opaqueness that has been typical of the bunker sector.

We then analyse the data recorded in the blockchain using our proprietary AI Digital Chemist™, a tool analysing information from suppliers, BDNs, certificates of analysis, and

TECHNOLOGY

Photo: FuelTrust

vessel operation data to create a chemical digital twin of the fuel. It then replicates interactions in the fuel at a molecular level to identify how it has been blended, what reactions would have taken place between molecules, and what occurred during combustion. This provides a precise ‘DNA’ of fuel at the batch level, enabling us to report fuel characteristics and emissions accurately.

The experience of tracking, recording and analysing these data sets using our Bunker Insights™ and Carbon Baseline™ products often reveals huge discrepancies in fuel characteristics. One issue discovered while working with our clients and their counterparties’ data is a stark difference in fuel energy densities. Based on our data analysis on 14m barrels of very low sulphur fuel oil across 28 batches, we identified a difference in performance between batches of fuel of up to 3%.

For a fully laden Panamax container ship, this would equate to a 50t fuel saving on a voyage from Vancouver to Portsmouth in the UK – or up to 469 nautical miles of extra sailing distance on a typical bunker.

For shipowners and operators, such insights are crucial to understanding where and when to buy fuel. They also come in handy when dealing with regulators and seeking potential carbon credits based on their decarbonisation initiatives.

Building trust with buyers For fuel suppliers, our findings represent an opportunity to market a superior

fuel offering. Due to the lack of insight into the fuel supply chain, suppliers cannot currently gain any advantage by supplying better quality fuel. Documenting the life-cycle of fuel batches allows suppliers to gain a competitive edge by providing reliable evidence of fuel quality and building trust with buyers. Over time, they can use these data to build a reputation as high-quality suppliers.

Fuel suppliers must also protect themselves in the event of quality claims, and FuelTrust’s products document a fuel’s journey through the supply chain without the risk of disclosing commercially sensitive information. In the case of claims, our Bunker Insights™ provides parties with preand post-purchase insight into the life-cycle history, chemical compatibility, and regulatory compliance of fuel – alerting all parties to potential risks and problems.

Creating a cleaner world Future fuels and stakeholders’ increased interest in tweaking their operations will continue to drive the shipping industry and the bunkering sector to increase their understanding of the fuels they use and

supply. FuelTrust is both commodity and fuel agnostic. We can use our technology to trace the origin and outcomes of alternative fuels such as green ammonia and biofuels – or even fuels and materials in other supply chains like chemicals, aviation fuels, or metals.

The importance of this cannot be overstated. Fuels presently represent over half of the expenses involved in operating a ship, and the cost of new fuels is anticipated to be much higher than existing fossil fuels. Today, maritime fuels make up 12% of the global fuel market but lead to over 30% of emissions, so ensuring accuracy and accountability in bunkering is critical to creating a cleaner world.

During the decarbonisation transition, the industry will need to deliver accountability and value for investors, regulators, customers, and consumers alike. Achieving this will impose tremendous logistical challenges. Fortunately, by accurately simulating and analysing the contents of fuel tanks and engines, we can create a trusted, transparent fuels supply chain that can deliver insight and accountability quickly and cost-effectively.

FuelTrust leverages its maritime technology platform to authenticate relationships across the marine fuel life-cycle, digitally verify data from shared sources, validate decarbonisation and compliance, and identify potential bunker fraud and risk. With deep insight into when, where and from whom quality fuel is supplied, our solution allows you to alleviate the financial impact of bad fuel, mitigate regulatory risk, and empower sustainable shipping. Click www.fueltrust.io to find out more.

2/2022 | Baltic Transport Journal | 71

The AIRCOAT project: a new coating solution for reducing maritime shipping emissions

Sailing on air by the AIRCOAT Team To achieve the greenhouse gas emission (GHG-E) reduction goals outlined in the European Green Deal, the aim of which is for Europe to be the first climate-neutral continent, the maritime shipping industry must reduce its footprint: by 50% by 2030 and 90% by mid-century. This can hardly be ticked off by a single measure alone. Ship resistance reduction means (via advanced coatings, air lubrication, hull management of biofouling, hull form design) are the necessary drivers to reduce emissions.

Shipowners cannot solely focus on alternative fuels, which won’t be on hand in the medium-term in large quantities, nor other solutions such as slow steaming, which is well understood but will increase delivery times and the number of ships needed for transport. As such, hull optimisation technologies look increasingly tempting – for newbuilds and retrofits alike.

S

ince 2018, the AIRCOAT project has been targeting the development of a bio-inspired green solution to create a passive air layer on ship hulls underwater – so-called air lubrication. The goal is to reduce drag and prevent biofouling, thus lowering fuel consumption and emissions.

The AIRCOAT technology consists of a structured foil that retains air when submerged. Due to the lower viscosity of air (low resistance to deformation) in comparison to water and the air barrier, drag reduction and limited attachment of fouling organisms are expected. The foil will also help avoid releasing biocide anti-fouling substances into the water.

Johannes Oeffner, Project Coordinator of AIRCOAT and Team Leader at 72 | Baltic Transport Journal | 2/2022

Fraunhofer Center for Maritime Logistics, highlights, “We have developed production lines and testing facilities, produced a foil prototype, coated a research vessel and applied a test patch to a container ship, performed a vast number of calculations and simulations and spent many hours with hydrodynamic and biofouling experiments. We have tackled a lot of challenges, had to make some compromises and learned a lot which will help to advance AIRCOAT further for being a future ship efficiency technology.”

From plant to a lab to a ship AIRCOAT is responding to one of the main challenges of the European Green Deal: nothing less than halving shipping emissions by 2050. Today, maritime

transport still emits around 940mt of CO2 every year, about 2.5% of global GHG-E. Because it can reduce up to 10% of the ship’s velocity per year, biofouling is an important factor in increasing fuel consumption and, consequently, the industry’s carbon footprint. Many solutions exist to reduce biofouling or drag, but none addresses both.

Professor Thomas Schimmel, Scientific Coordinator of AIRCOAT and Director at the Karlsruher Institute of Technology’s Institute of Applied Physics, explains the bio-inspiration methodology that AIRCOAT foil uses, “It was amazing to understand the mechanism, how the plant keeps a layer of air under water and to produce first artificial air-keeping samples in our lab – which by the way still are keeping

TECHNOLOGY What is friction and why is it important?

What solution does AIRCOAT provide?

The movement of water along the ship hull causes skin friction resistance.

By covering the ship hull with the passive AIRCOAT layer, the air acts like a lubricant between the hull and the water.

This frictional resistance works against the movement of the ship, reducing their speed.

The air layer lowers the frictional resistance of the ship, minimizing the speed reduction.

To conserve speed, ships have to exert more force in order to move through the water, which increases fuel consumption and CO2 emissions.

The AIRCOAT technology has the potential to save 73 million tonnes of fuel at any speed and 225 million tonnes of CO2 emitted in relevant ships.

The AIRCOAT project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement N° 764553.

What is biofouling?

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info@aircoat.eu

www.aircoat.eu

�

Ship hulls are often covered in marine life and organisms – this is called biofouling.

… increasing their fuel use by 40%…

AIRCOAT protects ships from the added friction due to biofouling…

The AIRCOAT coating does not harm the sea.

… thus reducing their fuel use…

… and increasing their emissions.

The AIRCOAT project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement N° 764553.

The passive air layer created by AIRCOAT separates the ship hull from the water, reducing or preventing biofouling.

Biofouling increase surface roughness, which increases friction…

Common anti-fouling paints wear off, containing chemical substances that can harm the sea.

@AIRCOATProject

What solutions does AIRCOAT provide?

… and decreasing their emissions.

�

info@aircoat.eu

2/2022 | Baltic Transport Journal | 73

�

www.aircoat.eu

@AIRCOATProject

TECHNOLOGY

1. Development of the surface/foil implementing the Salvinia effect, that is able to trap a layer of air when submerged in water.

WATER AIR SALVINIA

WATER HYDROPHILIC HYDROPHOBIC

AIR FOIL SURFACE

SALVINIA FLOATING FERN

FOIL

4. Application of the AIRCOAT foil on the hull of ships.

ADHESIVE

3. Large-scale production of the AIRCOAT foil.

2. Apply the AIRCOAT material onto a selfadhesive foil.

the air layer even after years under water. beginning were on the scale of one milli- air layer when submerged in water. The air But this was just the beginning. It was the metre are now on the micrometre scale.” retaining ability of the so-called Salvinia step from the plant to the lab. The step from The innovative eco-friendly air lubri- effect relies on a complex micro- and nanoThestill AIRCOAT has received funding the European developed within the the lab to the ship had to beproject performed, cationfromtechnology structured surface with hydrophobic and Union’s Horizon 2020 research and innovation programme � info@aircoat.eu www.aircoat.eu � � and progress has been achieved during the project coats the ship hull with a thin and hydrophilic�characteristics.

AIRCOAT has under grant agreement N° 764553. past four years. Starting with small, fragile permanent layer of air without the need for technologically implemented this natural samples on the centimetre scale, we mean- continuous pumping or air bubbling. The phenomenon to produce a bio-inspired hull while produce elastic foils on the kilome- solution is inspired by Salvinia Molesta, coating technology that combines three key tre scale. And the structures which in the a floating water fern that forms a permanent advantages: reducing the hull’s underwater

74 | Baltic Transport Journal | 2/2022

TECHNOLOGY Third, appliquéing the foil on ships: industry procedures have been developed to manually apply the self-adhesive prototype foils to commercial vessels within standard dry-docking processes.

Demonstration tests with a container ship showed the coating’s function applicability and operational durability.

Four t h, testing t he solution.

A ten-metre-long research vessel in the Mediterranean was coated on one side with the air-retaining foil. Meanwhile, the first ‘real’ maritime conditions demonstration was performed on a container ship in Romania, where the foil was attached to a part of the hull.

Lastly, a laboratory check of the antifouling quality has been carried out.

Experiments have indicated that diatoms, a special kind of micro-organisms widespread in natural aquatic environments, avoid growing on air layers. They, however, like to inhabit the same surface when the air is removed for a comparative experiment.

friction; minimising fouling (as fouling organisms find it rather impracticable to settle on a layer of air); and getting rid of toxic anti-fouling substances.

The AIRCOAT foil is introducing advanced technology in hull coatings and, as such, will come with strong investments from the vessel owners’ side. What makes AIRCOAT a lucrative choice is the expected operational savings. The solution brings direct business profit to the ship operator by materialising savings in fuel consumption and hull maintenance costs between dry dock intervals whilst promising significant investment returns.

Testing, testing Several remarkable project advancements have been made in developing a foil with a surface structure to retain air and realise drag reduction.

First, there is the geometry and the size of the surface structure. Theoretical calculations and simulations on a high-performance computer cluster have shown that drag reduction increases with surface structure and that 10% is possible for frictional drag reduction.

Hence, depending on ship speed and length, the size of the surface structure has to be adapted to reach equal drag reductions.

Second, the production of the airretaining foil in a novel, kilometres-long roll-to-roll process has been developed.

To reach the deep-water and high-speed stability of the air layers, it has been necessary to manufacture the individual structures down to the micrometre scale.

Tool up!

In the pursuit of energy efficiency gains, it is crucial that all efforts also preserve the integrity of marine ecosystems. After all, what good can come from climate action that leads to adverse environmental impacts? The maritime sector has been working to phase out harmful compounds from anti-fouling coatings since 2001; however, negative effects of anti-fouling biocides on marine life are still being detected.

Established anti-fouling coatings have an average duration of five years between applications, which generates costs, i.e., funds that could be directed towards other green investments aboard ships or in port/ terminal infrastructure.

Further incentives to the shipping industry to invest in environmentally friendly solutions to tackle biofouling are essential to ensure that solutions put in place today are contributing to both climate and marine protection goals. In addition to offering significant fuel efficiency gains, AIRCOAT is a retrofit technology: it can be put into place on existing ships, which avoids early tonnage retirement and the need to build new vessels to reap the technology’s benefits. In practice, it allows for a much faster transition to a greener fleet. With 50% of the European tonnage being under 15 years, retrofit solutions give the industry the tools to quickly adapt.

AIRCOAT stands for AIR-induced friction-reducing ship COATing. It is a Horizon 2020 EU funded project promoting a passive air lubrication technology with the potential to revolutionise the ship-coating sector. Head to aircoat.eu to discover more. You can also watch the project’s Final Event by going here.

2/2022 | Baltic Transport Journal | 75

How technology can bring greater order and certainty into logistics

A spring tender season in turbulent times

by Fitzwilliam Scott Rising diesel prices, driver shortages, closed borders, blocked trade lanes – by and large, shippers cannot complain about the lack of challenges. Although not every one of these can be resolved immediately, logistics service providers are working hard on solutions. A digital approach can help secure capacities and handle fluctuating fuel prices in this difficult tender season.

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ince the pandemic, the story has been making news headlines: shippers are struggling to secure production processes and deliver their products. Global turbulences stand behind this precarious situation, including the most recent one: Russia’s aggression on Ukraine. They are affecting entire economies and thus also the worldwide logistics chain. Meanwhile, the coronavirus hasn’t gone anywhere, still capable of closing down cities the size of Shanghai.

Additionally, the European Commission’s Mobility Package will bring about new labour regulations in a region that has been struggling with a truck driver shortage for a long time.

All of the above affects the availability of raw materials, building components, cargo space, fuel, personnel, and transport capacities, forcing companies across the board to incur costs and trickle them down to consumers. Even before the turn of 2019/2020, organising shipments successfully had often been a delicate equation in terms of efficient running times, freight rates, and the best transport modes used. However, many of the most popular trade lanes are currently disrupted due 76 | Baltic Transport Journal | 2/2022

to geopolitical turmoil, with COVID-19 continuing to curtail cargo space.

It is not easy for shippers to manage their logistics efficiently in such circumstances. One of the possibilities to get regular demands fulfilled is a tender, as the strategic development of a diverse carrier network is becoming increasingly important to secure capacities in the long term.

Keeping the chain unbroken No truck, no shipment – it doesn’t get any simpler. In general, obtaining capacity at a competitive price is one of the biggest advantages for shippers when tendering business. This factor is becoming ever more crucial due to the growing driver shortage, the pandemic, regulations on CO2 taxation and cabotage, and political instabilities affecting the usually finely balanced global division of labour and the supporting logistics industry.

But even with a closed tender, the agreed capacities cannot always be guaranteed, e.g., in the event of driver scarcity or the closure of mainstream trade routes.

To minimise the risk, it makes sense to commission contractual partners with

a diversified, extensive carrier network.

This is where digital logistics platforms come into play. “InstaFreight offers its customers an extensive network of transport partners through its cooperation with over 25,000 carriers. In addition, we are expanding our charter offer by managing freight capacity on a growing trade lane network. That way, capacities can be secured in the long term,” says Philipp Ortwein, the company’s Co-Founder & Managing Director.

Another factor that affects the efficiency of transport logistics is the accessibility of trade lanes. Current geopolitical disputes are impairing international routes and thus hinder the transport of goods. One can have the proverbial truck, but now the wisdom goes no road, no shipment. InstaFreight offers alternative intermodal solutions for such cases. Shifting volumes from road to rail is a way to secure the supply chain in crisis times, along with saving CO2 and reducing freight costs. Especially if the cargo is heavy, transported over a long distance, and not time-critical, companies benefit financially from intermodal transportation.

TECHNOLOGY

Photo: InstaFreight

Fuel prices and freight rates: in check “Money makes the world go round,” states the character starred by Liza Minnelli in the musical Cabaret. In addition to securing capacities, the optimisation or flexibilisation of freight costs also plays a significant role in the tendering business.

Due to the rising diesel prices since the outbreak of COVID-19 and their recent explosive increase when armed conflict came back onto European soil, shippers are trying to hold onto their old tender agreements to avoid freight cost increases. This approach makes sense strategically. That said, even the existing tender contracts are renegotiated again and again due to the rising diesel prices – a time-consuming and resource-intensive undertaking.

One solution is the so-called “fuel floater cost model,” used for recurring business.

Within it, diesel prices are automatically adjusted to the current market value at any given time – without the need to renegotiate contracts. “Our transport partners are thus protected against rising fuel costs, while shippers benefit from falling fuel costs – a fair and transparent model for both sides,” explains Ortwein. “As a digital service provider, we have the technology to quickly roll out this model across our customers’ entire carrier base – saving them a lot of administrative work,” he adds.

With freight rates f luctuating even stronger over the last months, it becomes increasingly difficult to keep an overview

of the current market prices. Tendering business is an effective way to benchmark freight costs and check if the current agreed freight rates are still competitive. With securing capacities being the most pressing challenge for many shippers, getting the best price might be second-listed. Still, it remains an important factor – especially for large companies with considerable volumes to move.

Getting past the wall The current situation in the transport business illustrates that stable supply chains cannot be taken for granted. Transport prices are record high in many regions, and capacities are very scarce. Yet, there were many empty runs in European land transport: roughly 30% before the events that shook the world. Furthermore, with more than 770,000 transport companies, the market is very fragmented.

Through platform technolog y, InstaFreight makes this capacity more accessible to shippers looking for reliable transport partners, proficiently organising their supply chain management. InstaFreight successfully closed its Series B funding round at

the beginning of this year. More than $40m will help the Berlin-based log-tech company continue its way to digitise the road freight market to, from, and within Europe. Heliad and the European Investment Bank led the financing round, with all previous investors of InstaFreight also participating. This commitment underlines the necessity to maintain a resilient, efficient, and sustainable shaping of overland transportation.

“Land transport is still highly inefficient, and we as InstaFreight provide more sustainability and efficiency through a technological approach, thereby contributing our share to secure global supply chains,” underlines Ortwein.

It was once said that “If you run into a wall, don’t turn around and give up.

Figure out how to climb it, go through it, or work around it.” Even in turbulent times, shippers can turn the tender season into a strategic advantage by utilising the digital processes of logistics service providers. They help achieve flexibility in everchanging situations through their broad and diverse carrier network, adaptable freight cost models, and alternative transport solutions like intermodal.

InstaFreight offers digital B2B transportation services that enable fast and easy processing of freight transportation.

For shippers, the company’s fully digital process (from quotation and order placement to track & trace and freight documents) allows for increasing efficiency while cutting costs. For carriers, InstaFreight finds suitable transports according to one’s vehicle fleet, helping to optimise capacity utilisation and pay in a fast and reliable manner. Visit www.instafreight.de/en to learn more.

2/2022 | Baltic Transport Journal | 77

HERITAGE CORNER

Hope floats: the Greenpeace Esperanza retires after two decades, but the light shines on

by Greenpeace International For over 20 years a Greenpeace ship called Esperanza – ‘Hope’ in English – lit up the darkness in the fight to protect the environment. Its voyages have now come to an end, leaving a proud legacy of inspiration and environmental protection. Built in 1984 in Gdańsk, the former Soviet/Russian firefighting vessel was acquired by Greenpeace in 2000 and conducted operations on whaling, nuclear transport, illegal fishing and illegal logging, alongside helping with scientific research on climate and energy. Its high speed and ice-class credentials meant it was also used for polar expeditions, pursuits, and for reaching places few others could.

Until a well-earned retirement, Esperanza carried the light of ‘Hope’ all over the world.

O

ver the course of two decades, the crew of Esperanza confronted pirate fishing and whaling harpoons, from the polar regions to West Africa, teamed up with scientists and journalists to reveal illegal activities and conduct groundbreaking studies. They fought on behalf of people and planet against those who are prepared to sacrifice both for profit and power.

‘Espy,’ as it is lovingly known inside Greenpeace, carried our activists to parts of the world that are inaccessible to most. It’s often in these most remote areas where the worst environmental and humanitarian crimes take place. It brought aid and humanitarian relief to those in need in the aftermath of the Haiti earthquake of 2010, and 2012’s Typhoon Bopha, which devastated swathes of the Philippines.

As the fastest ship in the Greenpeace fleet, Esperanza was often used to chase high-speed vessels and to confront environmental criminals few others could catch. Esperanza’s ice-class credentials meant it took these fights into the freezing waters of the Antarctic in numerous polar expeditions.

It was, and always will be, a symbol of hope, born from the support of millions of people around the world and put into action by those who risked their safety and lives to stand against impossible odds for the protection of our shared environment.

Leading the fight As the world changes, so must Greenpeace’s maritime operations.

Esperanza, even with its electric drive, had a much larger carbon footprint than other Greenpeace vessels and despite the constant efforts of dedicated crew, technicians, volunteers, and supporters to hone and improve the ship’s technical features, its fundamental biology does not allow it to be consistent with Greenpeace’s vision for a zero-carbon future. The ship thus arrived at its final port stop in the Spanish Gijón, where it will be retired for good.

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The crew of Esperanza launched a solar-powered aircraft, helicopters and submarines from its decks and gave the ship many green renovations from the start of service and throughout its life, but in the midst of a climate emergency with environmental crimes still being committed all over the world, Greenpeace needs to lead the way on carbon emissions while at the same time finding more flexible and local maritime resources to allow us to take the fight to remote places few can go. Indeed, while Esperanza will be dismantled – to the highest environmental standards – its spirit and the hope that it represents will live on in the continuing fight to protect our fragile Earth.

Gracias!

Before joining the Greenpeace fleet in 2000, the ship, which began life as a Soviet-then-Russian firefighting vessel, had been known as Echo Fighter. The first Greenpeace crews aboard painted out the ‘h’ to spell Eco Fighter, but as the organisation began an environmentally friendly refit of the vessel an online vote was called to choose a permanent name.

Thousands of activists in Argentina and other Hispanic countries saw a historic opportunity for the first ever Greenpeace ship with a Spanish name.

Bringing together their enthusiasm for action at sea and the emerging digital activism of the era, they flooded the vote with one name: Esperanza.

For more than two decades the Esperanza’s story has been the sum of the actions of its talented and dedicated crew, the brave activists and volunteers who called it home, the teams who helped to deliver hope in action through campaigns and the supporters who brought Esperanza into the Greenpeace fleet, named the ship, and stood behind it on every part of its journey.

Esperanza has hundreds of thousands if not millions of people to thank.

It is perhaps fitting that the ship’s final destination is in a Spanish-speaking country: the language of its name’s birth. To those people, and all of you, who have carried the light of hope in your hearts, we say “gracias.”

HERITAGE CORNER

Photo: Greenpeace

The longing While we don’t know for sure all the places that light will be needed in the future, we do know it will never be extinguished, and we will bring wherever it needs to go, together. It is often said that a ship is so much more than the physical construction: it

comprises the heart and soul of the people who make it go. As the French writer Antoine de Saint-Exupéry said: “If you want to build a ship, don’t gather up people to collect wood or assign tasks and work, but rather teach them to long for the endless immensity of the sea.”

A few highlights from Esperanza’s legacy 2003: Forests and indigenous relationships 2002: Launch, deforestation action and meeting with anti-apartheid icon

Photo: Greenpeace/Daniel Beltrá

After Esperanza’s extensive green conversion, it was officially launched in its homeport of Amsterdam in early 2002. There followed a series of actions across Europe against imported timber, including Spain, France, the Netherlands, Germany and Italy, targeting European governments’ failure to tackle destructive logging in the world’s remaining ancient forests. Later that year, Archbishop Desmond Tutu blessed the vessel and the crew in Cape Town and joined them in wishing for a clean, peaceful and nuclear-free world.

Photo: Gavin Newman/Greenpeace

Esperanza’s Endangered Forests, Endangered Freedoms tour of Alaska’s Tongass National Forest investigated the Bush administration’s large-scale clearcutting and logging of forests across the US. Many local community members, including the Indigenous Tlingit peoples, welcomed the ship with accommodation and logistical support. Also that year, crew members of Esperanza were arrested for the first time off the coast of Gibraltar while protesting the illegal import of oil.

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HERITAGE CORNER 2005: Clashes with whalers

2008: Against Indonesian forest destruction

Photo: Greenpeace/Jeremy Sutton-Hibbert

In a joint expedition with Arctic Sunrise against Southern Ocean whaling, Esperanza was rammed by Kyo Maru, a Japanese whaling vessel, as it attempted to block the transfer of a dead minke whale to the Nisshin Maru factory ship, generating publicity that created space and appetite for the ambitious Defending Our Oceans mega-tour in 2006-07.

2006: Defending Our Oceans

Photo: Greenpeace/John Novis

Esperanza launched Greenpeace Indonesia’s first action against forest destruction when it blocked the Gran Couva ship, which was carrying a huge cargo of crude palm oil, and crew scaled the sides, calling for the Indonesian government to protect forests from the rampant deforestation stemming from palm oil and pulp industries.

2009: Defending Our Pacific/Pacific Voices fisheries

Photo: Greenpeace/James Alcock Photo: Greenpeace/Pierre Gleizes

Spurred on by the success of 2005 anti-whaling confrontations, Esperanza began an 18-month world tour. The Defending Our Oceans expedition was the longest and most ambitious that Greenpeace had ever mounted, covering West Africa pirate fishing, the Mediterranean, India, Singapore, Pacific Islands fisheries, Philippines, US (Hawaii, California) and Mexico.

2007: Completing the first journey

During Esperanza’s expedition to expose unsustainable and illegal fishing practices in the Pacific, a campaign which had already for a few years helped mobilise Pacific Island countries against industrial states fishing in their waters, then Cook Islands Prime Minister, Jim Maruai, paid a visit to the crew.

2010: Relief work with MSF on Haiti earthquake

Photo: Greenpeace/Daniel Beltrá

An underwater research mission to campaign for Marine Protected Area (MPA) off the coast of Alaska took Esperanza to Amchitka, the island that Phyllis Cormack never made it to in the first ever Greenpeace expedition in 1971. The ship also campaigned for the protection of dugongs threatened by the creation of a US airbase in Okinawa, and continued to work against Japanese whaling in the Southern Ocean – and even in Japanese waters. When a fire broke out on Nisshin Maru, one of the whaling fleet ships involved in ramming Esperanza in 2005, crew of the Greenpeace ship offered safety support and to tow it out of the Southern Ocean. The offer was refused.

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Photo: STAN HONDA/AFP via Getty Images

In one of many collaborations with Médecins Sans Frontières (Doctors Without Borders; MSF), Esperanza delivered supplies – thousands of blankets, bars of soap and other essentials – to the Haitian capital Portau-Prince following the devastating 7.0 earthquake that rocked the country in January. The ship also conducted climate-related scientific research on ocean acidification (using mesocosms: outdoor research system) in Svalbard with the Leipzig Institute, teeing up confrontations the following year.

HERITAGE CORNER 2011: Arctic oceans research

2014: A big year for Hope in the Arctic

Photo: Nick Cobbing/Greenpeace

Photo: Jiri Rezac/Greenpeace

Following the previous year’s scientific research, Esperanza evaded the Danish navy off the west coast of Greenland and its crew scaled Cairn Energy’s oil rig Leiv Eriksson, the only rig in the world poised to begin new deep sea drilling in the Arctic. The confrontation, joined by Greenpeace International director Kumi Naidoo and Paul Simonon, bassist of The Clash, set the scene for a global Arctic oil campaign and years of work on oil, climate and energy.

2012: Typhoon Bopha humanitarian work

In a joint action, Rainbow Warrior and Esperanza teamed up to intercept the first ever shipment of Arctic oil to Europe. Carried from the Prirazlomnoye oil platform, the centre of the Arctic 30 case, the oil on board Mikhail Ulyanov was blocked in Rotterdam.

Many members of the newly freed Arctic 30 were involved, after their three months in detention in Russia made them globally recognised. President Anote Tong of Kiribati and Yeb Saño, the then Philippines Climate Change Commissioner known for his UN COP19 speech on record-breaking Super Typhoon Haiyan, sailed on board to witness the Arctic sea ice minimum and demand urgent climate action, connecting the melting polar ice with the rising sea levels and worsening climate impacts in their respective countries. Yeb joined Greenpeace Southeast Asia as Executive Director two years later. Other high-profile crew members in 2014 included actors Emma Thompson (England) and Michelle Thrush (First Nations, Canada) and English fashion designer Vivienne Westwood. Esperanza occupied and successfully halted Arctic oil drilling efforts by Norwegian state-owned oil company Statoil.

2015: Chasing fossil fuel villains across the world

Photo: Vincenzo Floramo/Greenpeace

Photo: TED ALJIBE/AFP via Getty Images

When the record-breaking category 5 Super Typhoon Bopha (aka Typhoon Pablo) struck the Philippine island of Mindanao, Esperanza diverted from an expedition to Manila for a Pacific fisheries conference to provide emergency humanitarian relief in cooperation with Philippine government agencies.

2013: Pacific campaigns expand

Climbers from Esperanza scaled Shell’s Polar Pioneer oil rig in April during a chase across the Pacific from Malaysia to Alaska that came to be known as The Crossing.

It was one of a global series against Shell’s Arctic oil drilling by Esperanza and others, including First Nations and other Indigenous protesters. Inspired by these, thousands of people in kayaks and other boats joined the ‘Paddle in Seattle’ (May) to protest Shell’s Arctic drilling plans, and then climbers swung from St Johns Bridge in Portland (July) to block the departure of an Arctic-bound Shell vessel. Later that year, Greenpeace Mexico and Esperanza worked in the Sea of Cortez/Gulf of California to protect the vaquita, a gravely endangered species of porpoise, from extinction. The campaign against illegal gillnets in the area, which often involved great personal risk, made the vaquita a highly visible public issue and eventually pushed then president Enrique Peña Nieto to take action.

2016: Targeting destructive fishing and palm oil practices

Photo: Will Rose/Greenpeace Photo: Dean Sewell/Greenpeace

Esperanza’s work on Pacific fisheries widened to Sri Lanka, Thailand and the Philippines and then Mauritius, Mozambique and Madagascar for an Indian Ocean campaign to document tuna transshipment and patrol the region with government authorities. The ship also carried a research mission to the Queensland coast in defence of the Great Barrier Reef, after the Australian government approved a massive dredging project at Abbot Point to rip up seabed to make way for coal shipments.

Esperanza’s high-tech expedition to confront illegal, unregulated and undocumented fishing forced the world’s biggest tuna producer, Thai Union, to the negotiation table to clean up its act. Combing huge expanses of the Indian Ocean for marine snares called FADs with solar powered drones, crew converted them into electricity supply for coastal communities and confronted vessels using lights to attract fish. Days later, the Indian Ocean Tuna Commission banned the practice. Then, Esperanza staged a blockade of palm oil in Rotterdam, the palm oil gateway into Europe, while directly affected activists from the cargo’s country of origin, Indonesia, blocked refineries on shore. The ship also passed by London’s iconic Tower Bridge during a UK campaign on microplastics.

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HERITAGE CORNER 2017: Amazon Reef and West Africa

2020: A new global challenge emerges

Esperanza hosted scientific research and world-first imaging of the undersea Amazon Reef, a unique biome where a French oil giant was bidding for oil licences. In 2018, after sustained pressure, Total lost its battle to drill in the area. The Hope in West Africa tour covered six countries with patrols against illegal fishing alongside national authorities. Ministers from Mauritania and the President of Guinea Bissau visited Esperanza to show continued support for Greenpeace’s many years of work on West African fisheries.

2018: Drop dirty palm oil

As the Pole to Pole world expedition finished up in Antarctica in January, a new global challenge was emerging: COVID-19. Maritime operations suffered along with the rest of the world as a pandemic was declared, but Esperanza made it to the North Sea for an investigation into a methane leak that resulted from a major blowout in gas drilling operations 30 years earlier. The ship also dropped inert granite boulders at precise locations in the Dogger Bank Marine Protected Area in the North Sea, to help prevent destructive bottom trawlers from operating in a new exclusion zone.

2021: Final confrontation

Photo: Greenpeace

Photo: Suzanne Plunkett/Greenpeace

Photo: Pedro Armestre/Greenpeace Photo: Marten van Dijl/Greenpeace

Six activists from Esperanza boarded a shipment of palm oil from Indonesia to the Netherlands and were detained on board. The action, against the world’s biggest and dirtiest palm oil trader, Wilmar, was part of a series of protests worldwide to urge food giant Mondelēz, the makers of Oreo and one of the biggest brands in the world, to drop their suppliers of dirty palm oil.

2019-2020: Pole to Pole

Further work dropping boulders to thwart the activities of destructive bottom trailers continued in the English Channel early in the year, before Esperanza’s final confrontation in Sagunto, Spain, against the national gas grid operator Enagas. Crew from 18 countries blocked the entrance to the port to prevent a ship loaded with liquefied fossil gas from entering, highlighting the harmful effects of gas and other fossil fuels on the most vulnerable, as European energy ministers met in Luxembourg to discuss rising energy prices. The action came just weeks after a huge victory when Greenland dropped all future oil exploration, demonstrating that activism, such as Esperanza’s actions against the Leiv Eriksson rig in 2011, works.

2021: The eternal light of Hope

Photo: Christian Åslund/Greenpeace

Esperanza and Arctic Sunrise jointly undertook one of Greenpeace’s biggest ever expeditions from 2019-20. An almost year-long ‘pole to pole’ voyage from the Arctic to the Antarctic, building the case for a UN Global Ocean Treaty. Scientists, activists, campaigners and famous faces including Marion Cotillard (France), Shailene Woodley (USA) and Gustaf Skarsgård (Sweden) all came aboard the ships during the ‘Protect the Oceans’ expedition, which began with the most northerly music concert ever and took a Turtle Journey through the world’s oceans to research and highlight the threats of climate change, overfishing, plastic pollution, deep sea mining and oil drilling.

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Photo: Will Rose/Greenpeace

Once crew in Spain were released from detention and the ship’s anchors released by police, Esperanza’s retirement journey began with a triumphant final return to Amsterdam. Thank you, Esperanza! True to your name, you gave millions of people hope. And we will always find ‘Esperanza’ in our hearts.

TRANSPORT MISCELLANY

Lay waste to zero-waste

Photo: Container Self-Storage and Traders Association

It became almost customary for us to report on the alternative ways of using a shipping container. Believe it or not, the good-ol’ box can serve as storage ashore as diligently as it does at sea. According to the Container Self-Storage and Traders Association’s Container Self-Storage Census 2021, there were 978 container self-storage sites in the UK alone, up by 35 on the 2020 result, with occupancy levels frequently going over 95% of the

capacity. It makes us wonder: are British houses and flats so tiny they cannot accommodate the things people own? Or, conversely, is there just too much stuff to cram under one’s roof, no matter the square footage?

What was the wisdom again? Ah, yes, love things, use people, right? At least the boxes manufactured for setting up container self-storage take in some cargo from China to Europe. You know, sustainability. Sort of.

Happy Women’s Day!

Photos: APM Terminals Gothenburg

On the 8 th of March, we traditionally put the flag out to celebrate women worldwide, among others, in tribute to the various roles and occupations they hold, including as transport & logistics workforce.

Although still in the minority across our industry, today’s reality is far from being a ‘man’s world’ only. The change has been driven by such figures as Kerstin Åström. Together with nine other women, she began working as a crane operator in Gothenburg in 1965 – answering the port’s call to help with the shortage of labour. A few years later and Kerstin decided to apply for permanent employment. “There 84 | Baltic Transport Journal | 2/2022

was a huge opposition to female crane operators at that time, and they came up with every conceivable reason why I could not get a permanent position. But I did not give up but wrote a letter to the Swedish Gender Equality Agency,” she recalls. Kerstin persevered, and in 1982 she became the first female crane operator in the Port of Gothenburg with a fixed job. “I was so happy! There was a clear macho culture among the older men, but the younger ones had a positive attitude towards me,” Kerstin recollects. We salute all women whose invaluable work helps propel the movement of goods and people!

TRANSPORT MISCELLANY

Who’s a good boy?

Book carriers

Starting in mid-February 2022, a two-week-long ‘Cerber’ drill took place in the Port of Gdynia, allowing service dogs and their partners to hone skills in an environment entirely new for them. The exercise comprised three segments: searching for explosives, sniffing drugs and tobacco, and training with attack dogs. Among others, the human-dog teams had to acquaint themselves with new working conditions, including steel decks of a ship, narrow corridors, and unfamiliar scents when going through the facilities of the search & rescue service, the port fire brigade quarters, the container terminal of Hutchison Ports Gdynia, and Stena Line’s ferry Stena Spirit. The latest drill formed part of the Port of Gdynia’s ongoing security and crisis management programme, which aims at emulating dangerous situations as realistically as possible to prepare for real-life events.

Transportation comes in various shapes and forms. Smuggling, though nowadays commonly associated with blameworthy acts of drug peddling or human trafficking, was also used to save one’s culture (and no, we’ll bring up the topic of getting whisky over the Pond some other time). Back in the 18th and 19th centuries, when Imperial Russia was trying to Russify other nations without remorse, among many the Lithuanians, people put their lives at risk to preserve what’s at the very core of culture – language. In 1866, a total ban on the Lithuanian press was enforced.

The Russians also wanted to replace Latin with the Cyrillic alphabet, to that end forcing schoolchildren to use textbooks written in Russian.

Meant as a swift russification campaign, it backfired immensely. The knygnešiaĩ – book carriers – took up the gauntlet with gusto (getting the ‘cargo’ as far as from the US)! It is estimated that millions of books were smuggled (some 2.75m living in Lithuania in 1897). Five days after their Independence Day on 11 March, the Lithuanians celebrate the Day of the Book Carrier in memory of the brave smugglers (the birthday of Jurgis Bielinis, who brought book smuggling to its heights).

Vincas Juška, one of the knygnešiaĩ; photo: Wikimedia Commons

Photos: Port of Gdynia

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WHO IS WHO ARUNA HUSSAIN Managing Director of Sealand Europe & Med

MARKO RAHIKAINEN One Sea’s Ecosystem Lead

The European and Mediterranean division of Maersk’s feeder & short sea arm has a new lead. Starting in 2000, Hussain worked for Maersk in liner and trade roles in Pakistan and the UK, then left for Australia in 2010, working for a few years as Supply Chain and Operations Director for Australia at Wayfair, and rejoined Maersk in 2016, first as Damco’s Country Head and then as Chief Operations Officer for the Middle East. Up till now, Hussain was Area Managing Director for Maersk in Pakistan.

Captain Rahikainen brings a wealth of maritime experience, particularly in safety, security, and facilitation. Recently, he was employed by the Finnish Transport and Communications Agency, where, among others, he represented the country at the EU Committee of Safe Seas. He was also involved in introducing the maritime autonomous surface ships topic at the IMO. Earlier, Rahikainen worked for the Finnish Maritime Administration as Maritime Inspector.

SØREN POULSGAARD JENSEN Advisory Board Member of EHRENBERG SØRENSEN Kommunikation

NICOLAS ALBRECHT CEO, CargoBeamer

Søren Poulsgaard Jensen worked, first as CFO and then CEO, for the Danish-Germany ferry line Scandlines for 11 years, having joined the company in 2010. Previously, he had held various executive positions with A.P. Møller-Mærsk.

Jensen will support the international communication agency with his experience in strategy, business development, and operational performance. He is a graduate of the Copenhagen Business School and the London Business School.

Albrecht had joined CargoBeamer’s Executive Board in January 2020 as Chief Business Development Officer and was recently chosen by the Supervisory Board as the company’s CEO. The chief responsibility of Albrecht in his new post will be to scale CargoBeamer’s proprietary technology for automated transhipment of semi-trailers onto trains Europe-wide.

To that end, Albrecht will lead the development of the company’s terminals (30) and network (50+ services) over the coming ten years.

JENS MATHIASEN Partner at HFW

ALEXANDER ADAMOU Chief Scientist, VesselsValue

The global, shipping sector-focused law firm has opened its Danish office and hired Jens Mathiasen to run the new bureau. Mathiasen previously led the shipping, offshore, and transportation practice at the Danish law firm Gorrissen Federspiel. He is the former Managing Director of the Shipowners’ Council of Copenhagen. Mathiasen also writes and lectures on maritime law, including more than ten years as Head of Maritime Law at Maersk’s graduate training programme MISE.

With a first-class degree in Mathematics from Cambridge University and a PhD in Applied Mathematics from Imperial College London, Dr Adamou will oversee the scientific research of the online valuation and data provider.

Dr Adamou already worked with VesselsValue – back in 2010 when he led the development of the company’s first asset valuation model. He also supported the company as a Quantitative Consultant in 2012-2022.

MARKUS HIRVONEN Stargate Rail’s COO

PAUL SELLS Global Head of Digital Solutions, ABS

The subsidiary of the Estonian Stargate Hydrogen has hired Markus Hirvonen, PhD in Machine Automation from LUT University, to oversee the implementation of solutions for retrofitting freight locomotives with zero-emission hydrogen fuel cell powertrains. Hirvonen was earlier with Sandvik Mining and Construction as Research and Development Manager for electric and hybrid vehicles. He has also worked on the electrification and digitalisation of mobile machines (at, among others, Rolls-Royce, Valmet Automotive, and Patria).

The American Bureau of Shipping (ABS) has appointed Paul Sells, holder of several patents, who joins the Houston-based class from Mira Labs, Inc., where he was Vice-President of Customer Experience. Sells graduated from the University of Tennessee with a degree in Mechanical Engineering and is a Master of Business Administration from the College of William and Mary. Paul has also served in the U.S. Navy as Lead Petty Officer.

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