JEM Portugal Shipping Week Edition

ROB OT IC S

LUSOYACHT

NEW NAVAL DESIGN FOR THE FUTURE

VISION AND ANTICIPATION The robotics revolution has the potential to dramatically change the ship design landscape, particularly in respect to automation. No doubt about that. Pág.27

Design as a projection of the true nature and soul of a boat is the highest virtue of Lusoyacht as well as its ability to combine the highest technical sophistication with the most futuristic beauty. Pág.12

PORTUGAL SHIPPING WEEK EDITION · DIRECTOR GONÇALO MAGALHÃES COLAÇO

Digital Safety & Security

BALANÇO DA ECONOMIA DO MAR

As systems become more sophisticated and ships become more automated, greater is the risk of all kind of attack. Pág.14

A LESS SULPHUROUS WORLD Complying with IMO’s cap for Sulfur in fuels is a challenge not only for shipping but, above all, for refineries. Few are capable of meeting such a challenge, but not Galp, which is already committed to delivering a 0.50% Sulfur fuel to the market by 2020.

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LISNAVE MAINTENANCE AND REPAIR OF EXCELLENCE With six dry docks and with a capacity to dock vessels up to 700k deadweight tons, four jetties capable of mooring simultaneously eight vessels, 20 cranes with capacity up to 100t and a gantry crane of 500t, Lisnave is one the major shipyards of Europe. Pág.8

PORT OF SINES THE ATLANTIC GATEWAY TO EUROPE Sines is blessed with a number of success factors: geostrategic location, a natural harbour, with up to 28m depth and ample free space in the industrial and logistics zone. Pág.20

TECNOVERITAS FUELS AND EMISSIONS’ REDUCTION Mandatory due to environmental concerns, the decrease of CO2, NOX and SOX is already the next big challenge for the shipping industry. It won’t be easy to overcome, but it has to be feasible. Pág.24

Energy to connect the world If the Atlantic is on your route, count on our energy.

Supply your vessel at the ports of Lisbon, SetĂşbal and Sines with Galp. Products exclusively produced in Galp refineries, meeting the latest ISO standards and the best bunkering service complying with all international environmental policies, will be provided by Galp.

We look forward to receiving your call.

+351 217 240 654/952 +351 210 039 032 bunkers@galp.com galp.com

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Portugal Shipping Week

Portugal Shipping Week Llewellyn Bankes-Hughes, Director of Shipping Innovation and – together with Portugal’s Ministry of the Sea – Organiser of the first ever Portugal Shipping Week.

Portugal Shipping Week is a week-long series of events, ranging from conferences, seminars and training to social networking gatherings and exhibitions. It includes technical field visits to the Port of Sines and on-board visits to ships that will be brought into Lisbon and moored alongside the main conference venue at the Gare Marítima de Alcântara.

The aim of Portugal Shipping Week is to put Portugal back on the global maritime map. Portugal has a very grand history in the maritime sector, but risks standing still rather than looking ahead. The purpose of Portugal Shipping Week is to focus on the future to unleash the vast potential that Portugal has on the global maritime stage.

How will Portugal Shipping Week work? It will work in rather the same way that the enormously successful London International Shipping Week works – by ensuring that every stakeholder in the maritime industry in Portugal and those from outside Portugal has an interest in working together for the greater good. This will make the week a great success.

Portugal Shipping Week has been organised this year because 2018 is an important year for the country. Portugal is undergoing what appears to be a great transformation and seems to be improving in all areas of life – economically, commercially and culturally – to the extent that the whole world is now looking towards Lisbon and Portugal. It is all working really well.

Another reason for running Portugal

Shipping Week this year is that Seatrade Cruise Med, a 2,500-visitor conference and exhibition, is coming to Lisbon for the first time. The timing is perfect because Seatrade Cruise Med has become part of Portugal Shipping Week, bringing its large cruise industry following to Lisbon. Together with the delegates from the cruise sector, Portugal Shipping Week is expected to bring up to 3,500 people into Lisbon.

Of course, this is the first Portugal Shipping Week, so we shall have to see how it goes before announcing a second event two years from now.

However, I suspect that during and after this inaugural event, everyone

involved will realise what a success it has been and will be fully behind running a second Portugal Shipping Week in 2020. If so, I believe that the second event will be much bigger and even more well supported, both by Portugal’s maritime sector and those foreign entities wishing to engage.

There are two exhibition spaces at the former cruise ship terminal in Lisbon, Gare Maritima de Alcantara, one a business-to-business event and the other about exploring the oceans.

The inaugural Portugal Shipping Week has been received very positively within Portugal. The Ministry of the Sea has been very proactive in making the event work and interest among the shipping and port community in Portugal and future afield is very strong.

The range of conferences is extremely encouraging, and the very high status of the speakers and delegates – including Ministers of State, Ambassadors, politicians and other diplomats from over 30 countries – is extraordinary.

My message to convince people to come to Portugal Shipping Week has been very simple: Lisbon is a wonderful place to visit; there is a dynamic maritime sector here; a lot of things are going on, from the Chinese Belt & Road Initiative that is helping the country develop ports and other infrastructure to digitisation, blue sea technology and green shipping.

The two main conferences of the week, the Portugal Shipping Week Flagship Conference and the Ministry of the Seas’ Oceans Meeting 2018 will bring a lot of people to Portugal and will certainly help put the country’s maritime sector back on the global map.

The aim of Portugal Shipping Week is to put Portugal back on the global maritime map. Portugal has a very grand history in the maritime sector, but risks standing still rather than looking ahead 03 3

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Shipbuilding&Repair JOSÉ VENTURA DE SOUSA

Export Consortia: A strategy for increasing competitiveness in EU The 2018 Annual Economic Report on the EU Blue Economy, the first report produced by the European Commission on maritime established and emerging sectors, allows the monitoring of the blue economy in the EU and member states.

COMPETITIVENESS IN EU SHIPBUILDING AND REPAIR Shipbuilding & Repair (S&R) is an established support activity necessary for sustaining the functioning and development of EU Blue Economy, acting as a tractor of other industries and ship equipment manufactures and complementary activities, such as the shipbuilding ancillary industry.

The European S&R industry is growing below the economy. For the period 2009-2016, the published figures on the 2018 Annual Economic Report EU Blue Economy, show that the EU S&R had a growth of 11,3 % against 20,1 % of EU GDP. In the same period, the Portuguese S&R had a negative growth of 2,7 %.

If considering only Shipbuilding, the GVA growth 23,7 %, bigger than the EU S&R GVA and GDP.

The Portuguese S&R was severely affected by the financial and economic crisis in 2009. Since this year, Shipbuilding prices decreased significantly due to lower demand of shipping and crude oil exploitation together with the excess capacity of construction and

EU BLUE ECONOMY GVA AND S&R VS EU-28 GDP

Portuguese S&R was severely affected by the financial and economic crisis of 2009

of commercial fleets. These provoked deep crises on EU S&R, very well noted in the Portuguese Ship Repair activity.

EU Shipbuilding in the last decades lost a significate market share for the Asian Shipbuilding Industry due to their unfair competitiveness. The competition with Asian countries remains fierce.

The Portuguese shipbuilding industry was even more affected by the crisis. In the two first years of the analysed period, the GVA decreased about 40 %, recovering the years after 2012. The S&R recovered on GVA but the weak results on Ship Repair limited a better growth.

HOW CAN THE INDUSTRY OVERCOME THE SITUATION? To overcame the world competition and improve the growth and development in S&R, shipyards are forced to focus on new markets and more demanding on high technology and high value vessels. The project CONSORTEX has the objective to give one contribution to this challenge.

The project CONSORTEX – European Internationalization Maritime Consortia, is a two years project funded by Interreg Atlantic Area Programme that aims to form export consortia formed by European Interregional SMEs, to improve the competitiveness on S&R sectors.

Interregional Export Consortia are going to be created to increase the competitiveness of the European Atlantic shipbuilding and ancillary industry in international markets by promoting joint work, high tech, employment and professional qualification.

European SMEs in the sector need to grow in size, to be innovate in marketing and supply a complete portfolio of technical solutions based on high tech in all links of the value chain.

The main aim is to set up at least 5 export consortia formed by 6 or more European interregional SMEs specialized in the manufacture of certain built-in packages of naval production (bridge, engine room, accommodation and deck) for a certain type of shipbuilding (offshore vessels, marine power plants, cruise ships and scientific vessels) to improve their market positioning, sign contracts, and make international sales.

While the goal of the consortia is innovation in marketing, their performance will be extended to all areas of the shipbuilding industry, such as innovation and technological development.

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Shipbuilding&Repair Faced with the challenge of international competition, it is planned that SMEs in the area can address some highly specialized niche markets with high added value by forming groups of companies. These groups of firms will become export consortia which will be able to supply to international market a different product, based on leading technology.

It is intended to tackle a fundamentally commercial problem that is common to all the Atlantic Area and other European basins: the low weight of the European ancillary shipbuilding industry worldwide. This problem has a higher acuity in Portugal. The Portuguese Shipbuilding industry has o low GVA; we have no significant equipment and materials suppliers nor expert subcontractors.

Maritime industry is constantly evolving for increased innovation. Emerging technologies boost efficiency and the green image of shipping. But innovation is not only technology and production. There is constant innovation in processes, marketing and management, namely in these aspects: A new approach to the market: Export consortia are a commercial tool to improve the access of SMEs to distant and very competitive markets, which each of them, separately, could not be able to reach.

A new export consortia incorporation methodology: This methodology consists of 4 phases (awareness, setting consortium, consortium model of the initial group, and implementation). These phases are deployed in 21 consecutive actions.

A new emphasis in specialization: Consortia will only work in market niches related to the already referred types of ships and naval buildings (offshore vessels, cruise ships, offshore power plants and scientific ships) and complete areas of them (accommodation, deck, bridge and engine room).

WHAT IS AN EXPORT CONSORTIA? The main difficulty of SMEs to establish a presence abroad is due to their small size and lack of financial means. Other problem SMEs may have is not meeting the necessary production capacity needed by their clients and to have competitive selling prices when compared with the Asian market.

An export consortium, according to the United Nations Industrial Development Organization (UNIDO) “is a voluntary alliance of firms with the objective of promoting the export of goods and services of its members through joint actions and multilateral trade programs.

Through synergistic operations, the firms participating in the Export Consortia, would be able to operate at a significantly higher level of efficiency and would therefore demand less resources for the same quality and in some cases even volume of outputs.

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According to Assis & Haneman, 2014. the collective internationalization strategy should be aligned with the vision and global strategy of the cluster

WHAT ARE THE BENEFITS, OBSTACLES AND CHALLENGES? Small to Medium size Enterprises (SMEs), play a key role in the economy, both on a domestic and global scale. However, most of the Portuguese and the other participant Interregional SMEs, do not meet the needed requirements and do not have the means to establish a successful presence in foreign markets.

By being part of an export consortium, participating SMEs will combine expertise and financial means, and so can overcome the limitations they face in taking advantage of market opportunities that require the delivery of large stocks of products or compliance with international standards. The main benefit of the created Export Consortia is the creation of a much more streamlined (i.e. faster and efficient) process of exporting. This leads to significant reductions in terms of both cost and risk.

HOW CAN AN EXPORT CONSORTIA BE CREATED? The initiative to create an export consortium may either come from a public institution or from the private sector as the CONSORTEX project. An export consortium can be created by starting a new entity based on a joint agreement between the participating companies. The resulting entity would then start to be considered as just a single entity that represents the collective interests of all its members and signatories. Important is that before initiating the process of establishing a consortium, the involv-

ing actors must be aware that it is necessary to have a clear objective, consensus should be built up, and time factor should be considered.

According to UNIDO (2005), There are 8 steps involved in the creation of a consortium which are: 1) identifying a promoter; 2) identifying potential members; 3) to conduct a study of interest and to contact interested firms; 4) designating representatives; 5) scheduling meetings between members; 6) to prepare feasibility studies and a business plan; 7) the incorporation of the consortium; and 8) ensuring follow-ups.

HOW TO IDENTIFY THE BEST PRACTICES FOR CREATING AN EXPORT CONSORTIA? According to Assis & Haneman, 2014. the collective internationalization strategy should be aligned with the vision and global strategy of the cluster. The cluster should also have a clear determination of strategic areas of knowledge with potential business development in a network context. This strategy will drive to clear objectives to the cluster management aligned with internationalisation collaboration and analytic tools to support the design strategy for internationalisation (Figure 1). The use of the competence matrix and constant update of it, will conduct to a periodic update of the cluster strategy in geographical and thematic terms. This was one of the approaches (Assis & Haneman, 2014) for the life cycle of a cluster (Figure 2).

Aligned with these authors, in Portugal were analysed previous experiences and identified best practices through the study of i) published research, ii) face-to-face interviews and by the iii) responses to the survey questionnaires that were sent to most known maritime clusters.

Direct contact was made with the national clusters and organizations that could bring the best inputs to this report. The following clusters were face-to-face interviewed:

Scrubbers can delay the exchange for low sulphur fuel oil (LSFO) in the shipping industry, according to Goldman Sachs

A ED Cluster Portugal – Aeronaut-

ics, Space and Defense Cluster I NOVARIA – Companies Association for an innovation network B igle – Fostering Oceans Sustainable Development W avec – Offshore Renewables One question that was raised on the meetings was the need that the members of the consortia retain their financial, legal and management autonomy.

Though, it is essential that consortia are formalized in some way, firms must formally commit themselves to the consortium. From our documentary search we understood that, except from Italy, a consortium is not recognized as a specific form of enterprise association.

Still, the establishing a formal structure with clear rules and responsibilities at an early stage of consortium development can help the participants to focus their activities.

During the meetings we were able to conclude that is most cases, between companies is signed a declaration of commitment, an until the moment it reveals

INTERNASIONALISATION STRATEGY Collective internationalization strategy (a set of resources, skills and trends, of a material, cultural and organizational nature) aligned with the vision and strategy of the cluster and clear determination of strategic areas of knowledge with potential business development in a network context.

Clear objectives for cluster management activities and international collaboration projects, ensuring that they are perceived and understood by all stakeholders.

Combining analytical tools (industry, cluster, regional, macro-trend analysis) to support the design of a strategy for internationalization - e.g. ‘cluster map’, market intelligence, foresight, ...

Figure 1 - Internationalisation strategy (adapted from Assis & Haneman, 2014)

Periodically redefine the cluster’s positioning in terms of internationalization (geographical, thematic and typological) based on the evolution of the strength of their relations.

Figure 2 - Internationalisation strategy lifecycle (adapted from Assis & Haneman, 2014)

sufficient for the consortium success. We then conclude that the formalization of the consortium depends once again on trust, how the members will operate together, for how long, with long-term objectives or for a specific purpose.

The formation of exportation consortiums is a good strategy for enterprises to work around some organisational growth problems. The creation of consortiums can minimize productive, knowledge, personnel or financial capacity problems.

For the CONSORTEX project success it is imperative to exist trust between the partners and all of them should be aligned with a mutual objective. No partner should overlap each other.

One of the most repeated advice, the consortium must know very well the capabilities of each partner. It’s important to know very well the organization itself. This knowledge will be crucial to define objectives, strategy and new partners profile, as well as to identify projects out of consortium capabilities, which can end in failure.

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Shipbuilding&Repair PETER LUIJCKX

Lisnave Shipyard One of the major shipyards of Europe LISNAVE, with six dry docks and with a capacity to dock vessels up to 700,000 deadweight tons, numerous workshops, four jetties capable of mooring eight vessels simultaneously, 20 cranes with capacity up to 100 tonnes and a gantry crane (located over docks 20 and 21) of 500 tonnes, offers first-class facilities for any kind of ship maintenance and repair or conversion.

The added value of the location of the Shipyard, the functionality and the diversity of the facility associated with the recognized quality of workmanship and technical competence are competitive advantages that positions LISNAVE SHIPYARDS on the frontline in ship maintenance and repair in Europe and worldwide.

The origins of LISNAVE dates back to 1937, when the CUF Group took grant of the exploitation of the ROCHA DO CONDE DE ÓBIDOS shipyard, located on the North of the Tagus River, in Lisbon. The success of this project, led to the need to build new facilities that could include larger docks.

It is in this context that in September 1961, LISNAVE-ESTALEIROS NAVAIS DE LISBOA, a company acting in the global market, had the prime mission of building, on the South of the Tagus River, a new yard, Margueira Shipyard, provided with facilities to accommodate larger vessels.

With the big success of the Margueira shipyard, which had opened in 1967 and the great expectation of new opportunities that would arise with the closure, of the Suez Canal, it was decided to create a new company for the construction of a new shipyard at Mitrena in Setúbal, called SETENAVE (ESTALEIROS NAVAIS DE SETÚBAL), and geared towards shipbuilding activity. The Mitrena Shipyard training centre started operations in 1973.

In mid-1997, following repeated financial difficulties and the failure of an initial restructuring plan in 1993, involving SETENAVE, LISNAVE and SOLISNOR, a vast restructuring 8

Most of the vessels coming to the modern Lisnave for repairs and maintenance are the larger tankers, bulk carriers and container ships that sail our oceans plan was implemented that included plans for infrastructures and Human Resources. A plan for development until 2007 and which involved the closure of the Margueira shipyard and the

concentration of all activities of LISNAVE shipyards in Mitrena. The implementation of this new plan in July 1997, gave rise to the current LISNAVE, ESTALEIROS NAVAIS, S.A., which has been operating since that date.

During the restructuring period, a MBO operation was made in June 2000, following which the new shareholders developed several structural measures for the recovery and sustainability of the company.

Part of this plan included maintenance and upgrading of Mitrena shipyard facilities, by building two WWTP’s and by building the Hydrolift (unique in the world) with three docks for Panamax size vessels. All was completed by the end of the year 2000.

The recovery process was implemented in the second half of the year 2000 during which LISNAVE closed the Margueira Shipyard and transferred and concentrated all activity in the renovated Mitrena shipyard. The effectiveness of the measures taken, were proven in particular through the inversion of a cycle of many consecutive years of negative operating results and the constant financial disruption, into positive results. The success showed a new horizon for the future of LISNAVE and for the continuation of this industry in Portugal.

Most of the vessels coming to the modern Lisnave for repairs and maintenance are the larger tankers, bulk carriers and containerships that sail our oceans. In general vessels enter into a drydock for inspection and maintenance in accordance with requirements defined by the Classification Societies. Other reasons for visiting a shipyard are the repairs of damages or in exceptional cases the need for modifications or upgrades. LISNAVE ESTALEIROS NAVAIS handles 100 vessels every year.

Many orders are placed with a relatively short period of time between contract award and arrival of the ship in the shipyard, which makes advance planning a difficult exercise.

And operating in a global market with severe competition puts a constant pressure on prices and performance. Many of LISNAVE´s competitors in the developing countries offer lower prices to attract work.

The biggest risk factor in the world industry is the imbalance between European countries and developing countries with regard to labour laws, health and safety legislation at work and the consequent impact on Labour cost from compliance with such rules. Developing countries are constantly looking for business areas where they can compete aggressively. Shipbuilding and ship repair are one of the sectors of activity where competition growth is almost daily.

But the advantage of repair and maintenance is that the necessity will not go away. As long as there are ships, there will be demand for repair and maintenance. And with the continuing eco-

Promoting Intermodality and Logistics

The Port of Setúbal has a privileged location at 45 km away from Lisbon, with excellent road and railway connections to its hinterland which goes to Madrid. It Is located in one of the most important industrial and logistic areas of the country and offers direct connections to the National Railway and National Road Networks, integrated in the Trans-European Transport Network (TEN-T) which makes it one of the most competitive ports of Europe’s Atlantic Coast.

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www.portodesetubal.pt

Shipbuilding&Repair nomic development also comes growth of consumption, growth of maritime transport and growth of the world fleet. The world economy is strongly depending on shipping for the transportation of raw materials and goods to and from different locations on our globe. Shipping accounts for around 90% of all transport in the world. And per ton, per mile, it is also the most environmental friendly way of transportation.

Nevertheless the overall volume of greenhouse gasses produced by ships needs to be reduced.

This is a serious challenge for the shipowners, who are now faced with regulations that require serious investments, whilst the freight rates in most sectors are still very low. This means modifications to the fuel carrying capacity for low Sulphur fuel, the installation of exhaust gas scrubber systems and alike.

But this is not the only challenge they are facing, because almost all ships also need to be modified to avoid the world-wide transportation of invasive species. This means the installation of a ballast water treatment system and modifications to the ballast water piping systems. These are extensive projects with high

costs to the shipowners, but projects that will keep many ship repair yards busy in the years ahead. Also Lisnave has been performing quite a few of these projects and many more are expected to come.

To be able to provide the services clients are looking for, it is extremely important for LISNAVE to have a suitable, reliable and flexible workforce.

Time is a key factor for customers, who want to have the ship out of service as few days as possible. So ship repair yards need to operate 365 days a year and 24 hours a day. LISNAVE

Each year LISNAVE recruits between 40 and 50 employees from the Setúbal region for specific training actions

MODERN CLASS FOR SMARTER OPERATIONS Today’s market needs smarter solutions – and a modern classification partner. Find out how our modern classification solutions can turn possibilities into opportunities – and make your operations safer, smarter and greener.

Learn more at dnvgl.com/maritime

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LISNAVE also recruits and provides training for up to 10 young engineers each year for project management teams and that are intended to be the basis for the company’s future management teams

needs to have workers from different sectors working every day of the year, requiring a significant effort by workers and their families.

Each year LISNAVE recruits about 40 to 50 employees from the Setúbal region for specific training actions and following which they are included in the workforce. The training is carried out at the premises of LISNAVE, at the SOLISFORM Training Centre which has developed, together with LISNAVE, programs tailored to the specific needs of the activity. Training actions focus on the technical component without overlooking the training and development of human capabilities and skills.

LISNAVE also recruits each year 5 to 10 young engineers for the project management teams that receive adequate training and are intended to be the basis for the company’s future management teams.

The purpose of recruitment processes is to guarantee the company’s future with qualified, competent and motivated personnel, since LISNAVE’s employees are the backbone of the organization.

In the near future there is sufficient market

volume to allow the continuation of the success that LISNAVE has been facing for the last two decades.

Nonetheless in the context of increasing competition, there are also increased risks of lack of human resources to meet the needs of this market. However, despite the rising difficulties in recruiting workers and technicians for an intensive, demanding and heavy labour industry such as this, LISNAVE believes that the training and rejuvenation strategy that has been followed will ensure the necessary resources for the continuation of the success.

LISNAVE is prepared to conquer the future.

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Shipbuilding&Innovation

TOMÁS COSTA LIMA

Design Naval LusoYacht – Leggera

THE VESSEL AS A DESIGN PIECE Creating a product that is 100% functional, ergonomical and with sailing preformance, creates countless challenges to the team of designers, naval engineers, and designers working in perfect harmony with each other to create the new vessel. With all the complexity of which a vessel is made up, this can be a maximum example of design in all its strands.

CHALLENGE One of the main reasons for a product’s success in a market where the offers are super competitive, is related to its degree of innovation in both form and design.

Design of a product can be considered as the whole process of conception that goes through an exercise of research/analysis of the markets, consumer study, knowledge of the materials, production processes, study of technological trends and market, concept development, innovative solutions, design and final project.

This is the formula needed to create and make a competitive product in the market. In naval design the approach is identical, from the conception process to the production of the vessel.

The various phases of the process are developed side-by-side with the client, it’s market is studied and a thorough a complete analysis of this study we find a suitable vessel for the client.

Following the approval of the idea by the client, the project goes to engineering and, with the ac12

companiment of the designer, for the production phase. For the Designer, innovative and effective solutions are the result of a work developed over years of study and accumulated knowledge of different areas. All these inputs will help the designer to achieve the best lines that will make a difference and create a unique product.

For any product, there are enumerated challenges. In what regards boats, these challenges lead us to the limit! Only the resilience of many and the spirit of sacrifice of all lead us to continue and Overcome these difficulties that blow on our bow.

The materials, the limitations of the shipyard, the lack of manpower, the suppliers delays, legislation, etc... They are some of the examples that day-to-day torment us. We must be persevering and follow the objective of seeing the vessel sailing. It’s almost like a son that’s growing on our hands.

Tonnage tax legal system was approved in a cabinet council by the Portuguese Government

PORTUGUESE RESPONSE In Portugal, country of sailors, the design in the process of developing a vessel is being now adopted gradually and with a growth that I believe, in the very near future, will project us in an international market with great Competitiveness.

For a sustained development of our Naval industry, the main concern should be in the design area to ensure that our competitiveness is strong.

Nautiber, in Vila Real de Santo AntĂłnio, is one of the shipyards that is bet-

ting on innovation and design. With a constant production and new vessels, it is a good example that helps us believe in the future of the area. Like WaterX, a maritime-tourism company, who has bet on three vessels where design makes a difference, both at visual and functional level.

We have the means, the location, the excellent conditions and the know-how to place Portugal on the map of the good shipbuilding countries again.

LUSOYACHT AND LIGHT BOATS LusoYacht and Leggera, are two brands of design and production of vessels: the first one, dedicated to the project of professional vessels for maritime-tourist; The second, dedicated to recreational craft. Both are developed through a market recognition process and are based on totally innovative solutions in the design area so that their products are different from the other offers and associate with the brand, values that empower it for new models and new markets.

The future may be uncertain, but it’s up to us to conquer it

Shipbuilding&Services DIGITAL SAFETY AND SECURITY

amendment leaves non-tanker vessel owners with little more than two years to achieve a similar level of preparedness as their tanker-owning colleagues.

Digital defence

RISKY JOB

As owners act to fortify their ships and shore-side operations against cyber risk in the face of evolving threats and imminent regulation, DNV GL has expanded its services to cover control systems, software, procedures and human factors.

Although the notion of a ship in the middle of the ocean being disabled by a software malfunction or by hackers was initially greeted with considerable scepticism and denial, a spate of incidents has transformed attitudes. Today the maritime industry acknowledges the potential dangers and is taking steps to address cyber risk at various levels.

While in earlier decades, office IT systems were the predominant target, these days, more incidents are affecting operational technology (OT) – the programmable control systems responsible for operating machinery.

The trend reflects the growing complexity of such systems and a general increase in connectivity which in turn increases the attack surface of a vessel.

This increase is borne out in the statistics: the number of attacks on OT in 2016 was double that the preceding year and quadruple the level seen in 14

2013. So whereas before it was mostly a company’s finances and reputation at risk, now that has escalated to safety of life, property and environment. The stakes are much higher.

REGULATORY RESPONSE Fortunately, industry policymakers have not been asleep at the wheel. Last year saw two particularly significant milestones in the regulatory environment. A section dedicated to maritime security – including cyber risk – was introduced in the third edition of the Tanker Management Self Assessment (TMSA), which came into effect in January this year.

Shortly after, IMO’s Maritime Safety Committee inserted Maritime Cyber Risk Management to the list of ISM Code requirements. Strongly encouraged to start on 1 January 2021, the

Ultimately managing cyber risk is no different to managing any other risk

Ultimately managing cyber risk is no different to managing any other risk, remarks Patrick Rossi, DNV GL’s Maritime Cyber Security Service Manager.

“The equipment and terminology may be unfamiliar and somewhat daunting but the approach is fundamentally the same as, say preparing for and carrying out hot work modifying a vessel’s structure.”

Software changes, for example, should not be done on a whim, which can often happen on ships. Because IT engineers don’t frequently visit vessels, when they do come aboard to update the ECDIS or set up the latest version of a maintenance management application, the temptation is to be helpful.

They click to install a new service pack and a backlog of other app updates.

Nine times out of ten, this is fine. But occasionally it can disrupt settings elsewhere on the system. Moreover, the consequences won’t become apparent until long after the engineer has left and the ship has set sail.

Instead updates should be carefully planned, tested, approved, and recorded. They should be categorised as minor or major to ensure personnel with appropriate authority can approve.

This, Rossi says, is virtually identical to the process for gaining approval prior to carrying out welding.

NOTPETYA LESSONS If there was one positive outcome of the NotPetya ransomware attack on Maersk in spring last year, reasons Rossi, it was awakening owners and operators to the fact that cyber threats are not hypothetical. “Today there is much greater awareness of the real-world implications and acceptance that cyber risk has to be tackled.”

However, shipowners and operators are at different stages on the learning curve in formulating a response, he observes. “Some are bewildered by the scale of the problem and don’t know where to begin; others have introduced some countermeasures but are uncertain whether they’ve covered everything they need to cover.”

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Shipbuilding&Services In its role as a classification society DNV GL has adapted and expanded its cyber security offering to assist owners and operators. It now provides services for educating and raising the awareness of all stakeholders, both on shore and at sea; assessing and implementing defensive and reactive countermeasures; and monitoring and reviewing effectiveness and robustness of barriers, emphasising continuous improvement.

PRACTICAL ADVICE In September 2016, DNV GL published a Recommended Practice (RP) to educate shipowners and operators on how to deal with cyber risk. “It was designed to demystify a subject, with which the industry was still getting to grips. We took care to write it in a maritime language and contextualise it in a maritime setting.” Also, DNV GL’s RP takes into account common constraints such as limited budget and resource availability. The core methodology is to identify weaknesses, assess their severity and then prioritise the most serious ones.

The next step for vessel operators would be to carry out a cyber security assessment. DNV GL can support in this task by sending interdisciplinary teams to engage with onshore personnel and offshore crews to identify and address specific business risks. “While operators typically understand the guidance as it is written down on paper, translating those principles into action is sometimes more challenging,” notes Rossi.

Such collaboration results in a highly methodical approach to developing procedures that are effective both at reducing risk and mesh neatly with the operator’s structure and working practices. In addition to technical mitigations for closing any cyber security gaps, this appraisal also considers system management and the human factor.

After countermeasures and new risk management regime are implemented, they can be followed up and qualified by penetration testing. In this process, authorised ‘white-hat’ hackers do their best to compromise the IT and OT defences to comprehensively validate that safeguards work as they should and risk vectors have been closed.

LIFECYCLE MANAGEMENT DNV GL now also provides third-party verification of cyber security re16

In September 2016, DNV GL published a Recommended Practice (RP) to educate shipowners and operators on how to deal with cyber risk

quirements throughout the newbuild project lifecycle. “Our cyber security team recently worked with a major cruise line on a newbuild project to devise a process for embedding cyber resilience from the very beginning of the vessel design phase,” reports Rossi.

This was accomplished by introducing defined procedures for handling and accommodating risk for all stakeholders in the project – not only the owner and yard, but also the vendors.

Incorporating technology and systems from third-party suppliers unavoidably adds complexity to a project, and, from a cyber security perspective, increases the potential attack surface area for malevolent actors.

“For a large, sophisticated vessel like a cruise ship, which is dependent on technology for both operational and hotel needs, collaboration is absolutely critical,” Rossi stresses. “Cyber risks are multifaceted. So the response has

Based on these advisory services, DNV GL has developed first class references covering cyber resilience

to mirror that. Everyone has to be involved in the conversation, because, as the saying goes, a chain is only as strong as its weakest link.”

Based on these advisory services, DNV GL has developed its first class notations covering cyber resilience.

The Cyber secure notations have three qualifiers: Basic, Advanced and ‘+’. Basic is primarily intended for ships in operation, while Advanced is designed to be applied throughout the newbuilding process. The ‘+’ qualifier is available for systems that are not part of the default scope of Basic and Advanced.

HUMAN ELEMENT Of course, cyber security is not just a matter of firewalls and antivirus software. Up to 90% of incidents are attributed to human behaviour. DNV GL has therefore expanded its options for training through its Maritime Academy. Courses cover cyber security from both management and technical angles and even include lessons in hacking to give participants an insight into how cyber-attackers operate. In addition, it has developed tools – incorporating friendly phishing campaigns and simulations of other social engineering techniques – to assess staff alertness, enabling customers to fine-tune the level and frequency of cyber awareness training.

If the Cape Route will be assigned to the One Belt, One Road, the port of Sines could play an important role in global shipping, says the Portuguese Minister of the Sea

Portugal was also the pioneer in maritime insurance, helping to shape the worldwide trade as we know it today

From Portugal to the World The Discoveries were the great visible feat of Portugal, but not unique. Among other achievements, we include the invention of insurance, without which it would be impossible for world maritime trade to be what it is today All historical questions tend to be, by their very nature, controversial. Such is the case in relation to Insurance. Nevertheless,

if there is any controversy as to the date and exact place where modern insurance was born, there is no doubt about the authorship

of the first treaty written on it. Many consider that the Companhia das Naus, founded by the King D. Fernando (1367-1383), inaugurated the practice of maritime insurance in Europe, although there are also those who claim to have discovered documents proving its previous existence (1347) in Genoa. Either way, is indisputable that the Edict of D. Dinis of 10 May 1293, established the first Mutual Insurance Society ever in history and that the authorship of the Tratactus de Assecurationibus et Sponsionibus Mercatorum, published in 1553

by Pedro de Santarém, was the first theorization of insurance ever written in the world.

As Moses Bensabat Amzalak, a scholar of Pedro de Santarém, wrote, if Mutual Insurance emerged in the form that it essentially still has today, it is a very different situation for the complex Insurance Premium’s payment evolution, particularly when, in Pedro de Santarém’s days, the insurance premium figure was still confused with other forms of speculation, such as the loan on general sea risks. One of the most important virtues of the Pedro de Santarém Treaty is precisely to distinguish, scientifically, as we would say today, between the concept of Insurance and other types of contracts, defining the insurance contract as “the convention by which anyone takes the misfortune of another at a previously adjusted risk price”.

Purists may have some objectios, but the fact is that, in addition to the lack of perfect definitions, we should not forgot that we are talking about of the first ever Treaty on Insurance written in history, published in 1553, when the legal matters still essentially followed the precepts of Roman law, fearing consequently that this type of insurance contracts could be confused with usury, prohibited under canon law.

One of the crucial issues of insurance, generally speaking, concerns the calculation of the premium payable accordingly to what is imagined be the probability of whether a certain fatality might occur or not.

However, the calculation of probabilities in insurance only arose in the 18th century and, in the time of Pedro de Santarém, and for a long time afterwards, the main criterion for calculation of the premium, per Reatz, also quoted by Amzalak, was essentially based in the evaluation carried out on the main 17

Shipbuilding&Services maritime claims’ statistics registered in the different Stock Exchanges or Mutual Insurance Companies operating in Lisbon.

In this respect, therefore, Pedro Santarém has not made any great progress, but it is equally interesting to note, accordingly to his Treaty, that fees paid in Portugal varied between 8 and 10% for small trips, rising up to 20% at certain times of the year for voyages to Flanders, possibly in accordance with seasonal meteorological conditions, among other factors taken in account for the premium calculation.

For a trip to India, it was not uncommon for rates to rise to up to 30%, despite knowing at the same time that, already in those times, Land Transport Insurance was, on average, 50% lower than maritime transport.

Regardless of the question of the calculation of premiums, the Treaty is equally interesting and important in other respects, such as, for example, the fact that Pedro de Santarém explicitly states that the Insurance Contract should rest on an entirely good faith basis, and that it was not admissible to become a means for the insured’s

enrichment, but merely a way of avoiding losses.

Proven either way, it would also be a basis for a declaration of the invalidity of the contract.

MÚTUA, LUSITANIA AND LUSITANIAMAR

The Portuguese Experience Mútua and LusitaniaMar are two very distinct but equally significant Portuguese insurance companies in the national panorama Mútua is the only Portuguese Insurance Company organised as a cooperative and entirely dedicated to the difficult area of fishing, with its high accident rate.

Born in 1942 as a small mutual for small-scale fishing, it nevertheless grew to become the undisputed leader in the fisheries sector in Portugal in 1985, with 94% of its insurance portfolio represented on this area.

In this framework, the main insurance products marketed by Mútua respect the Insurance of Accidents of Work for the shipowners and of Personal Accidents for the fishermen when they are at sea, as well as for the loss of personal assets.

At the same time, Mútua also has Compensation Wage Insurance carried out by the fishermen themselves or by the shipowner in the event of a vessel, following an accident or any other kind of problem, is unable go to sea.

The shipowner is also able to contract a Hull Insurance Policy with Indirect Losses in order to continue to pay the salaries to the respective crew in certain conditions.

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Without wishing to be exhaustive, it should also be highlighted that there is multi-risk Insurance for Warehouses which is particularly important for small-scale fishermen, although not exclusively, as well as other insurances related to aquaculture and maritime tourism.

Finally, but of no less significance or importance, is the fact that Mútua also has its own clinics, as its own clinical body, since many problems with its policyholders, predominantly fishermen, are so specific that it is often very important to have a clinical body that is highly specialized.

Rather diferent, but not less significant, is the case of Lusitania and LusitaniaMar, as a spin-off of the former, which occurred in 2009 after the acquisition of two other insurance companies, Real Seguros and Mutuamar, both already specialized maritime insurance companies. The latter has been exclusively dedicated to fishing, allowing therefore LusitaniaMar to quickly become the second largest Portuguese Insurance Company in the maritime arena.

Born and integrated into a major insurance

On the other hand, in the Treaty, Pedro de Santarém establishes that the Insurance does not assume and does not respect, by definition, damages caused by fault attributable to the insured, nor is it allowed to insure contraband or prohibited goods.

In the event of a claim, Pedro de Santarém also stipulates that the insurer must pay the full amount of the insured item and, in the case of partial loss, a value proportional to the loss suffered, not forgetting that, in the event of a dispute between traders, more than attending to the rigor of the law, it is important, above all, to attend to equity.

Finally, the great Pedro de Santarém is far in time but not in spirit. And it was not by chance that he was Portuguese, even though he lived a great part of his life in Florence, as it was not a mere accident that Portugal was also a pioneer in Maritime Insurance, without which, in the past, as today, World Trade wouldn’t have been what it was, nor what it is, and most certainly will hopefully still remain for a long time to come.

company such as Lusitania, belonging to the Bank Montepio Group, LusitaniaMar has evidently not only absorbed, capitalized and expanded its already extensive experience in the more traditional areas such as the Maritime Transport Branch, Goods and Hull Insurance, but also has open to new areas.

In this context, LusitanaMar presents today a complete offer of insurance for activities related to the sea, from freight insurance to recreational boating, fishing, trade and maritime responsibilities, and a specialized offer for recreational marinas, naval shipyards, ports and terminals.

Regarding the main risks covered in each area, there are the damages covered in respect to goods transported by land, sea and air, damage to recreational craft, maritime tourism activity, fishing or commerce, including the hull, machinery and its responsibilities, which also include P&I, that is, the shipowner’s liability, in addition to the value of the hull, in risks such as pollution, clash with other vessels and responsibility to the passengers.

There is also global coverage for shipyards, recreational marinas, ports and terminals, specifically covering maritime responsibilities, and the strategy also includes the valorization and integrated coordination of resources and activities such as fishing, aquaculture and fish processing, sea salt extraction, off-shore energy and off-shore operations, shipbuilding, port operations , as well as the maritime tourism, a rapidly growing area.

Shipbuilding&Infrastructures PORT OF SETÚBAL

Strategic Location on the Atlantic Coast of Europe The Port of Setúbal benefits from excellent conditions which allow offering almost all port services required for a medium-sized export port.

It is directly connected to the National Railway and National Road Networks, belonging to the Atlantic Corridor of the Trans-European Transport Network (TEN-T) and has great available terminal capacity and quay expansion possibilities. It is located in one of the most important industrial areas in Portugal with available space and at the NS and WE maritime routes, with advantages that distinguish it from others.

It has as clients some of the most important companies: Autoeuropa Volkswagen, Portucel, Navigator, Siderurgia Nacional, Secil, Cimpor, among others.

The Port of Setúbal has 12 specialized port

terminals in several types of cargo, shipyard naval repair, fishing and aquaculture and leisure navigation, being a logistic solution for the region development. It is the national leader in the Ro-Ro traffic of brand new vehicles. It also handles general break bulk cargo, containers and several industrial cargoes such as metallurgical products and bulk feedstocks. The port offers also integrated logistics services.

The total of cargo handled at the Port of Setúbal was, in 2017, about 6,6 million tons, having the containerized cargo handled 152 thousand TEU and the ro-ro 224 thousand vehicles.

Until July of 2018, the Port of Setúbal handled more of 4 million tons, standing out the growth

of 51% on the roll-on roll-off cargo, in number of handled vehicles (191 thousand units), as the result of the exportation increase from the vehicles produced ate the industrial unit VW AutoEuropa (T-Roc, Sharan and Seat Alhambra), continuing to be the segment with the highest increase of the port. In volume, the public terminals represent more than 70% of the handled cargo at the port, having a 2% increase. Also, the dimension and number of vessels that called the port had a growth of 9,7% and 5,2% respectively.

As part of the implementation of the Strategy to Increase Port Competitiveness, Horizon 2026, of the Sea Ministry, are in progress the projects of the VTS System Improvement, which consists on updating the dedicated hardware and software infrastructure of the Maritime Control Centre; the Railway Accesses Improvement, being in development the technical studies, which will allow direct more efficient links, promoting the exportation; and the Improvement of Maritime Accesses to Port of Setúbal, with conclusion expected in the first half of 2019, consisting in the deepening of the Entrance Channel and the North Channel to -15m (CD) and -13.5m (CD).

The Port of Setúbal is the only national port classified as Ecoport and it is certified by the ISO standards with quality, environment and safety management systems.

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Shipbuilding&Infrastructures

In January 2016, Amazon stunned the shipping world by announcing that it had been licensed by the Federal Maritime Commission (FMC) to operate as a Non-Vessel Operating Common Carrier (NVOCC), thus becoming a de facto maritime operator between China and USA.

blockchain technology. They have launched a joint venture with IBM aimed at providing the container shipping industry with a blockchain “pipeline” where other carriers, terminals, freight forwarders, railroads, and others submit cargo movement information to provide shippers with an end-to-end record, replacing the complex paper trail involved in global supply chains. IBM and Maersk estimate that this initiative, dubbed TradeLens, could save the industry billions of dollars.

Following a similar strategy to address the increasing customer need for integrated endto-end solutions, in April 2018 CMA CGM announced it had reached an agreement to acquire an equity stake of nearly 25% of CEVA Logistics AG, a leading Dutch logistics operator.

A global leader in logistics with more than 50,000 employees in 160 countries, CEVA is ranked 5th in contract logistics, providing

Unlike a freight forwarder, a NVOCC sells ocean freight services under its own Bill of Lading. As a NVOCC, Amazon can offer integrated door-to-door logistics to companies selling on the Amazon Marketplace, taking advantage of one of the most advanced fulfillment networks in the world: FBA or Fulfillment by Amazon. This way, Amazon won’t have to deal with a plethora of sellers, buyers and operators to bring the cargo to their own warehouse and courier it to the final destination. Additionally, Amazon is able to secure the best ocean service in terms of rates, capacity and service reliability by requiring that the companies that sell through its website ship their volumes under Amazon’s contract, thereby adding to Amazon’s own volumes. Incidentally, this is how Walmart has built up its ocean volumes and squeezed ocean freight costs, thus supporting its longtime strategy of driving out supply chain costs and passing those savings along to customers.

One presumes that this is Amazon’s first step towards shaking the $350 billion ocean freight market, as they have done in all the markets they have entered. It is, so to speak, the tail wagging the dog.

Not surprisingly, in February 2017 A.P.Moller – Maersk announced a major change in the company’s strategy, moving from a multifaceted conglomerate to a focused and integrated global container logistics company.

This entails divesting from oil and oil-related businesses, placing a strong bet on digital transformation and developing new revenue sources. One year later, CEO Søren Skou clarified the company’s direction by comparing its service development to that of FedEX or UPS, i.e. providing ocean and inland transportation services, customs house brokerage,

end-to-end supply chain solutions, and managing more than 9 million sqm. of warehouses in more than 750 sites in the world. It is also ranked 10th in the world in freight forwarding, with a strong footprint in Asia. In July 2018 the CEVA transaction received regulatory approval.

JORGE D’ALMEIDA - CPSI PRESIDENT

AMAZON, the tail that wags the dog

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Amazon won’t have to deal with a plethora of sellers, buyers and operators to bring cargo to their own warehouses and courier it to the final destination financing and insuring the goods, consolidation, and whatever other services that may be relevant for its customers, pulling together the resources of logistics operator Damco, carrier Maersk Line (integrated by Hamburg Sud), and port operator APM Terminals.

Part of Maersk’s digital strategy involves

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European ports deserve more support in the next CEF budget for transport, says ESPO

One presumes that this is Amazon’s first step towards shaking the $350 billion ocean freight market

Taking a different but equally far-reaching tack, MSC has decided to enter the rail freight market, having acquired Portugal’s largest rail operator CP Carga (now Medway) in January 2016, as a launch pad for a European-wide rail network.

MSC’s initiative has a common thread with the other maritime operators: disintermediating complex supply chains offering integrated end-to-end solutions, enabled by the phenom-

enal progress in information and communication technology.

Needless to say, ocean ports play a critical role in this scenario, creating new opportunities for hub ports like Sines.

Sines is blessed with a number of success factors: geostrategic location, natural harbor with up to 28m depth and ample free space in the industrial and logistics zone, to name a few.

In less than 15 years, Sines container terminal (Terminal XXI) increased throughput from 4,000 to 120,000 teus per month and is currently ranked top-15 in Europe. This remarkable success justifies Sines claim as the Atlantic Gateway to Europe, creating exciting opportunities for further development, particularly as a budding logistics cluster attracting global distribution centers and value-added services.

Sines is also fortunate to be able to count on the vision, competence and energy of the Minister of the Sea, Ana Paula Vitorino, who is largely responsible for the radical transformation of Portugal’s maritime sector, starting as Secretary of Transport in 2005. Portugal Shipping Week, hosted by the Portuguese Ministry of the Sea, is a good example: it will join policy-makers, shipowners, operators and other stakeholders to focus on Portugal’s maritime economy and attract international investors and promotors.

Sines Port Community (CPSI), an association of public and private entities with vested interest in Sines, is proud to support Portugal Shipping Week and will stay at the disposal of any party that wishes to explore Sines vast array of business opportunities.

THE PORTUGUESE MRV VERIFIER SHIP ENERGY MANAGEMENT EXPERTS

www.tecnoveritas.net Or contact us: info@tecnoveritas.net | +351 261 819 819

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Towage JOSÉ ANTÓNIO A. COSTA

Towage and Maritime Assistance Economics influence ship sizes, with the average size increasing substantially in recent years.

Larger vessels intend to reduce shipping costs (crew, fuel, demurrage, insurance, servicing and ship maintenance) per load unit.

Costs lead into balance between increase in size, trade volumes, number of ports served, number of roundtrips worldwide, and safety/ environmental aspects.

The technical limitations to the size of ships1, are gradually being pushed further. Studies suggest, that the ongoing increase in ship size will continue in the upcoming years. Although and regardless improved manoeuvre capability introduced, physic dynamics still rules. Ships are subject to a dynamic system of forces on a continuous manner. Among others, safe operations, require these forces to be controlled.

Operations efficiency and time determine that ships size will continue to drive the quantity, quality and diversity of auxiliary means to serve ship’s operations, both on high and coastal waters, and in particular in port operations, such as: size/type of the cranes, load/unload automatic systems, communications and navigation control systems, terminals shape and size, tugboats type and operation capabilities.

SHIPS AND TUGS On the specific case of tugboats, their main function is to facilitate ships manoeuvres, lowering operational risk to acceptable levels. Ultimately towage, assures safety on operations both for ships, but also port infrastructures, maritime coast lines, and maritime environment. Towage is the vital and primary guardian that provides the safety and environmental protection, to shipping activities.

Tugs are ships, following all regulations applicable to generic commercial ships (flag register, IMO conventions, Classification Societies, etc.) with a high ratio size vs available installed power. In a simple manner, tugboats can be grouped based on their navigation area: 1. Harbour Tugs; 2. Coastal Tugs 3. Ocean-going Tugs.

In the case of harbour towage tugs, it is quite 22

common to group tugs based on their propulsion type, directly associated with their manoeuvre capability. If originally, most tugs had a conventional propulsion type, over the years, other types were successfully introduced: ASD – azimuth stern drive, Azimuth tractor, Cycloidal (Voith), Rotortug, Eddy tug, etc.

Technological innovations are being tested and applied, aiming efficiencies leading to economics. Not only, but also on tugboats, power generation alternatives, through different main engines types (Hybrid Diesel-Electric, Electric, LNG, etc.) are being used.

Also various automation technologies, have been introduced to shipbuilding and ship operations, including self-loading/unloading systems, computerized navigation, and unmanned towage, giving the 1st steps.

Besides all innovations and economics trends, it is expected over the next years, that towage operations will continue, both on ocean-going planned operations, rescue/ salvage, and harbour operations.

On the jurisdiction areas of harbours, a tugboat fleet (one or more operators) is usually assigned to assure safe operations, on the following tasks: (un)mooring, (un)anchoring, running along pier, escort and assistance, Fire-Fighting and Environmental Protection.

TOWAGE OPERATIONS ECONOMICS As per above mentioned, it is reasonable to accept, that a tugboat is becoming a highly sophisticated ship type. This means, high investment requirements, highly trained and skilled crews and low operational costs. Altogether, become part of a very difficult equation, to manage.

Shipping activity, was, is, and will be, per definition, global. Shipowners, charterers, harbour (port) operators, et., act on global markets, seeking for global service contracts.

In the particular case of Portugal (also in other countries), the legal regime applicable for the provision of harbour towing services,

considered as public service, is regulated by Decree-Law No 75/2001 and associated port regulations. In particular as regards the rules for rendering towing services (Article 3), the licensing process, with rights, duties (namely with the reference that licensed entities must provide guarantees to have an adequate fleet to guarantee the quality of the public service) and the fees due, for the exercise of the activity (Article 14).

Article 4, defines that the towage service, in the areas of port jurisdiction, may be provided: a) By the Port Authority; b) By licensing (annual renewal); c) By concession.

The Port Authority is responsible for choosing the regime that best fits the specific situation of each port and is considered of public interest.

The licensing regime, besides their annual range with obvious impact on any investment, limits the capacity of local towing operators to intervene, adding the already mentioned fact, that many of the regular users of the ports operate under international contracts with multinational towing services providers. The above-mentioned equation is increasing complexity, in particular, for local towage operators.

REBONAVE – REBOQUES E ASSISTÊNCIA NAVAL, SA REBONAVE is a Towage Company, established in 1989, duly incorporated and registered under the laws of Portugal, with headquarters in Setúbal, prepared to perform the following activities: ocean-going towage, harbour and port towage, rescue, salvage, escort services, fire-fighting at sea, available for immediate response to any emergency call, 24 hours a day, 365 days a year.

Our operations have a constant concern for safety/environmental aspects, as well as effective results in accordance with excellence criteria, for quality.

REBONAVE operations, are organized in such a manner that, efficiencies are often based on complementarity. Being a local harbour operator, our fleet also provides ocean going services, in close cooperation with our customers.

Cooperation agreements are established with other tugboat owners/companies to expand, as well, to complete our services portfolio. In general terms our operations are organized by business units, with the following main activities: S hipyard towage and maritime operation of vessels demanding Portuguese Shipyard terminals and dry-docks, for and from outer/ inner anchorages. Available specific skills for assistance to vessels manoeuvring inside locks and dry-docks; P ort towage and maritime assistance services for vessels demanding, Portuguese ports terminals, identified as mooring, unmooring, anchoring, cast off anchor and running along

There could be no summer ice in the Arctic by somewhere between 2030 and 2050, according some scientists

the pier). REBONAVE covers a wide area of the Portuguese coast and ports, being able to provide an integrated service to all our customers, both on long range lines, short sea shipping, regular or tramping operations/ lines. Currently, directly or through our affiliates, we provide Port Towage Services, in three of the four major Portuguese Ports: SetĂşbal port, Lisbon port, Sines port.

L ong range sea-going operations, for vessels and floating structures, both on planned voyages and emergency/rescue operations, the Portuguese Coast, salvage and close-insupport of maritime works on coastal areas.

Operations are developed mainly in North/ South Atlantic covering, Atlantic Islands, Mediterranean Sea, Africa West coast line, and South America East coast line, including the Caribbean Sea. Ocean Towage can vary from routine, well planned activities to critical emergencies such as rescue or salvage towing. Maritime/Rescue Operations rely on permanent support of our Operations Rescue Center (24/7).

Our fleet includes all common propulsion/ steering gear types of tugboats, with a wide range of bollard pull, including Fi-Fi and spill containment equipment (some vessels).

At our home port in SetĂşbal, Fleet Maintenance assures an effective technical support to all our naval vessels supporting effective maritime operations.

Tugboat operations, particularly in the port context, are essential to ensure the necessary efficiency

TOWAGE FUTURE Tugboat operations, particularly in the port context, are essential to ensure the necessary efficiency in the integrated management of passenger and/or freight flows, and the optimization of resources, ensuring safety to the vessel and the whole environment (other vessels, infra port structures, or waterfront). It is an undeniable but often neglected contribution, for the shipping activity. Local towage services providers, are often facing additional difficulties, associated with global economic effects, but also local poor understanding of the scope and importance of our role. Constant and efficient adjustments will be required to all operators. Following Shipowners trends, mergers and acquisitions will probably follow.

1. Statements of this article are referred to ships used exclusively on commercial trade, under flag register, rather than vessels.

Therefore, warships, floating platforms, cranes, others, are not being considered. 2. It is easy to consider millions of Euro, to invest, even on a small size tugboat fleet. Regardless the number of vessels calling a specific port, a minimum fleet is required. It cannot be adjusted, with short term strategies. Fleet is required to be on a permanent readiness status.

R&D JORGE M. G. ANTUNES

Shipping, fuels and the future Shipping was for a long time considered an environmentally friendly form of transportation; however, the trading companies demanded more cargo capacity and quicker deliveries, leading to the introduction of the first coal-fired propulsion engines to help sailing ships to overcome the days without wind.

Ship fuel consumption and carbon dioxide emissions are related (as well as all the other pollutants present in the engines’ exhaust)

The ships lost the sails and kept the coal -fired propulsion engines and finally, with the advent of Diesel engines, coal was put aside and the liquid hydrocarbons were the perfect option to sail at high speed, from one side to the other of the world for approximately one century. Three revolutions occurred in about one century, all were based on speed and cargo quantity, which is the same as power and ship dimension.

The price and quantity of the fuels, and the conscience of the resulting emissions effects, has not been in the order of the day for many decades. Although some countries, were filling such effects, and started pushing forward some type of control such pollutants that were responsible for many thousands of deaths per year, namely in Denmark and the Baltic countries by creating the Emissions Controlled Areas (ECA’s and SECAS).

Despite there are some alternatives to decrease 24

effectively some other effluent components like NOx (ECA areas), SOx (SECA areas) and Particulate matter, there is no apparent immediate solution for the decrease of carbon dioxide emissions, as these were never the driver when shipping started to investigate fuel alternatives to replace the traditional heavy fuel oil. The driver has been the compliance with the regulations of sulphur contents emission control areas (SECA).

Nowadays a fourth revolution is being started, but imposed by environment concerns, not only to decrease some atmospheric effluents on exhaust of Diesel propulsion plants, but to reduce carbon dioxide emissions.

With the objective to keep the world to stay within the safety threshold of a 2°C increase in average temperature agreed by virtually all governments. The two main obstacles that have prevented this from happening have been the ab-

sence of a global legally binding deal and the high relative cost of clean energy propulsion technologies. The Paris Agreement, has committed countries to reductions of GHG emissions, has virtually solved the first problem and paved the way for countries to implement environmental taxes and subsidies in order to change the relative costs of clean alternatives, which would solve the second problem. These policy actions combined with investment in clean infrastructures and regulation can contribute for the decarbonisation of the marine transport sector.

In the case of CO2 reduction, there are a number of things that can be done, to reduce the impact of the global warming, namely the increase of energy efficiency, from the mere 25%-30% for a medium size container ship, to anything well above that. Or simply, and concomitantly use of lower carbon content fuels, or even to use marine fuels (or energy vectors) that do not have carbon at all in their molecule, that is the same as to say hydrogen. Evidently, nuclear power is also an option that should be considered.

Power propulsion plant power, is intimately related with speed, in fact is related with speed to the third power.

Power=k.V^3 Therefore, the ship fuel consumption and the carbon dioxide, are all dependent (as well as all the other pollutants present on the engines exhaust). So, lowering the speed of transportation, could be a very efficient way to decrease the emissions of carbon dioxide, while in parallel, will promote some social sustainability of the societies by pushing the factories and respective manufacturing capacity to be closer from the buyers, thus creating again more jobs, and wellness.

Despite that generally everyone can accept that shipping is the mode of transportation that less carbon dioxide emits per tonne of cargo, it is in fact the fifth larger emitter of carbon dioxide if all the shipping companies were considered as a nation, just after India.

Shipping as a business is looking for economic results, therefore the driving forces are compliance with the regulations and the cost of fuel, which is the same as to say that the economic judgement will prevail over the long terms sustainable solutions.

Presently, shipping is under a great pressure, looking for a solution for heavy fuel oils with ultra-low sulphur content, but the main challenge and concern is certainly the carbon dioxide reduction.

In fact, it should be noted that, it is not to the shipping companies that lie the burden of developing new and sustainable propulsion technologies, although shipping in general should aim a sustainable environmentally sustainable activity, therefore demanding to the engine manufacturers such solutions.

2017 was a record year for several climate topics, including average sea levels, which were the highest since the beginning of satellite altimetry

Despite LNG and methanol in addition may satisfy IMO sulphur and nitrogen oxides regulations, also provide a pathway to a more environmentally friendly ship operation due to their respective low emissions of nitrogen oxides and particulate matter, they call for heavy costs of conversions as well as lower prices and availability on the calling ports..

However, in the past years, the price advantage of the “clean” fuels like LNG or methanol has decrease or even inverted in many cases therefore changed from a favourable situation, towards traditional fuels satisfying only the sulphur regulations. If the problem is posed to new constructions, it is posed as well to the world fleet that would be candidates for conversions to these “clean” fuels, but cost of converting these ships is prohibitive, in particular when considering their remaining operational life.

Nowadays decisions are based entirely on the fast changing fuel prices, providing a selec-

tion of fuels that fulfil only present regulations not considering possible future regulations or customer demands. The long-term pathway towards sustainability with a change to fossil free fuel production is still not considered, so if it is already difficult to find the right quantities of ULSHFO (Ultra Low Sulphur Heavy FUEL OIL), it would be much harder to find fuels with ultra-low carbon content or even without carbon at all.

CRITERIA FOR FUEL SELECTION Being the shipping a very conservative and global industry, the change of fuel is a long term decision dependent from a considerable number of variables. Some of the variables are: availability of these new fuels, in quantity and quality within the routes of the geographic area of a fleet operation, but also, the technology required to use such new fuels, this apart of the

local environment regulations, crew training to handle such fuels, costs to convert the existing fleet trough retrofits, type and age of the vessel, and many others.

As Diesel engines are quite flexible in terms of fuels that can be used, in particular in Dual fuel mode, allowing their operation typically with mixtures from 100% to 3% Diesel with 0% to 97% fuel gas or similarly Diesel and alcohol (methanol or ethanol). These type of engines make possible freedom of management of the mixture percentages, as a function on gas fuel prices and availability. Diesel engines, are still the working horse, which needs to be updated and redesigned to cope with the coming fuels, including hydrogen.

Also dedicated gas engines (Otto Cycle), is another alternative, although making the ship owner dependent on a market price for the gas and respective availability.

In order to make a new fuel work, there are a number of criteria that have to be fulfilled.

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AFRICA

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R&D According to the above, it can be concluded that there is no “best fuel”, but a fuel that is more advantageous considering a number a variables to the ship owner and its ships and their respective operation.

Some important criteria parameters to consider for a comprehensive fuel selection are: the fuel availability in the geographical are of the ship operation, physical state of the fuel – gas or liquid, its energy content or Net Calorific Value (kJ/kg), Heating requirements, Flash point temperature. The infrastructure and the fuel handling systems on board are dependent on the choice and it is associated with costs to retrofit between these alternatives. Dual fuel engines provide some flexibility, but require double fuel systems. Methanol fuel represents a combination of liquid fuel that can be handled in a dual fuel engine, but as its Net Calorific Value is less than half the NCV of the HFO or MGO, the approximate quantity of methanol to produce the same power as 1 kg of HFO is just about the double, therefore implications on space, and dimensions availability and weight, but also safety as its Flash Point Temperature.

Regarding the marine fuel pathways, it may be important to understand the carbon foot print to from well to ship, may be very different, and not negligible. Figure 2 below, represents possible pathways from source to propulsion plant.

As it can be seen on figure 3, there are a number of propulsion plant technologies that are flexible, namely Dual fuel engines based on Diesel cycle, Boilers or Gas turbines, each one of them being more adequate to certain types of vessels than others. So, a criterious choice of propulsion plant technology is a very important step towards the carbon dioxide emissions, in particular if the vessel operation is demanding more or less thermal energy, as well as the magnitude of propulsive power.

As conclusions, one can say that: Decarbonisation of shipping is the bigger and probably the tougher step the shipping industry must consider in a near future; The impact of decarbonisation will be much stronger, the impact of ultra low sulphur fuels, more difficult to solve, as it needs great strategy, and very well defined pathways, in order to avoid extremely costly mistakes; The decarbonisation, has a strong impact on the social part of most countries, by promoting local or regional manufacturing instead of intercontinental manufacturing, generating unemployment in consuming countries (importers); Decarbonisation will call for innovation in technology, which already exists, but needs to be improved in order to use the new fuels.

There is no doubt, that hydrogen in its various forms and nuclear power will be hand in hand and will be a solution for the shipping of the future.

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Figure 1 - Possible considerations criteria for the choice of a marine fuel

Table 1 - Comparison of commercially available fuels Net Calorific Values and Carbon Dioxide emissions factors.

Figure 2 - Marine Fuel pathways from source to ship.

Figure 2 - Marine Fuel pathways from source to ship.

ICS fears that an international agreement on maritime protected areas will impair global shipping

JOÃO TASSO BORGES DE SOUSA

Maritime robotics and potential future ship operations The “robotics revolution” is already impacting the design, as well as the operational deployment of unmanned underwater, surface and air vehicles for maritime operations, and has the potential to dramatically change the ship design landscape, particularly in relation to automation.

The “robotics revolution” is already impacting the design, as well as operational deployments, of unmanned underwater, surface and air vehicles for maritime operations, and has the potential to dramatically change the ship design landscape, namely in what concerns automation.

But this is just the beginning. Technological trends and projected developments of capabilities will entail a paradigm shift from single vehicle/asset operations to integration into system(s) of systems. The new capabilities will enable concepts of operation which could have not been imagined before. These, in turn, will pose new organizational and legal challenges.

Current practices and major trends in robotic systems for maritime operations are presented along with projections of new capabilities to be explored by the ship industry.

First, various aspects of vehicle design, program operation, and overall program costs are reviewed. Technological trends relating to robotic vehicles are also discussed, focusing on relevant developments to maritime operations, which provides a background for assessing potential future ship capabilities and developments. Notably, trends including miniaturization of sensors and computer systems, high energy density of power sources, and increased subsystem standardization and modularity are expected to have a important impact in this sector. Another significant trend is towards increased system autonomy via new command and control frameworks that facilitate integration of robots into higher level maritime systems through new concepts

Underwater Vehicles (AUVs) are unmanned, untethered, submersibles. Autonomous Surface Vehicles (ASVs) and Unmanned Air Vehicles (UAV) are, respectively, their surface and air counterparts. Remotely Operated Vehicles (ROVs) are tethered submersibles, remotely controlled from a ship or shore by a skilled pilot.

Key technical specifications for marine robots include endurance, size, payload, range, communications, and navigation capabilities.

Endurance is highly constrained by the limitations of current energy storage technologies.

The size of the vehicle typically constrains the payload and energy storage. Power and size are the major limitations of the payload, as well as availability of sensor technologies.

Range depends not only on endurance, but also on the mission profile. Communication and navigation capabilities determine the level of human intervention, the practical endurance, and the usefulness of the vehicle. Underwater navigation is very challenging because GPS is not available underwater. Communications are necessary for operating the vehi-

New capabilities will enable concepts of operation which could not have been imagined before

of operation for networked systems and new business models.

The organization of this article follows the structure of a book chapter1 to discuss maritime robots and potential future ship operations.

MARITIME ROBOTS BACKGROUND Maritime robots come in several shapes, sizes, configurations, and categories. Autonomous

cle and retrieving information from it. Above water communications typically rely on radio technology, with line-of-sight limitations imposed by the curvature of the Earth. Underwater communications have relied mostly on acoustic communications, in spite of recent advances in optical communications.

Heretofore, most robots have been automated but are not autonomous, as one could infer from the used acronyms. Autonomy basically 27

R&D means that decision-making takes place onboard without human intervention. In other words, in autonomous vehicles the typical Sense-Decide-Act cycle is intrinsic. This is in contrast to what happens with automated vehicles, where Sensing and Acting are mediated by scripted control procedures. In fact, full autonomy is still not feasible today; vehicles still lack the sensing and decision-making capabilities required for that purpose. This is partly why the concept of mixed initiative operation was introduced in the last decade. In this concept, human operators are part of the planning and control loops of the robot.

Currently there are several obstacles to the operational deployment of maritime robots.

Legislation and standards are still in the early stages of development. Interoperability is another major obstacle.

“The interoperability goal for Unmanned Systems is an ability to provide data, information, material, and services to and accept the same from other systems, units, or forces (. . .) and to use the exchanged data, information, material, and services to enable them to operate effectively together”2.

Open systems architecture concepts have been advocated in several unmanned air/surface/ground/underwater vehicle system roadmaps to address the problem of interoperability. This is because open architectures (OA) utilize a common set of interfaces and services, associated data models, robust, standard data busses, and methods for sharing information to facilitate development. The expectations are that OA will reduce life cycle costs, enhance competition, and open new markets.

In fact, life cycle cost has been another major challenge for maritime robots’ development, operations, and support. Systems, capabilities, and associated cost have been changing significantly over time. Yet, there is no standard way to estimate and report costs.

The distribution of robot cost across acquisition, operation, and support categories differs significantly from that of manned vehicles.

The diversity of robots, ranging in size from a few millimeters to tens of meters, precludes uniform cost metrics. However, nonrecurring costs, which typically include engineering, fabrication, test and integration, payload integration, vehicle transport, support team travel, and aircraft acquisition costs, must also be considered. This state of affairs makes it hard to determine cost estimation relationships (CERS) for robots. Finally, robotic technology enables new concepts of operation, notably those concerning the high levels of automation and coordination. However, the economics of coordination and cooperation for heterogeneous systems of systems is still poorly understood.

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POTENTIAL FUTURE SHIP OPERATIONS The development of automated ships is receiving significant attention worldwide and is expected to significantly impact the ship industry in the next decades. We observe that ship automation does not necessarily mean unmanned ships. Humans will still play a fundamental role in the years to come, namely with regard to safety, security, maintenance, and interactions with other systems. But there is more to it than that.

Future ship operations will differ significantly from what is done today. This is because technological trends and projected developments of capabilities will entail a paradigm shift from single vehicle operations to integration into system(s) of systems. New concepts of operation will revolve around interactions, teaming, persistence, services, network behavior, and dynamic reconfiguration. This is not a roadmap and does not address issues specific to countries or organizations. By this means, some concept of future ship operations can be better understood.

Ships will interface with automated ports and also with other ships or specialized aircraft, for cargo transfer, eventually on the fly.

This would enable direct delivery of goods from

The economics of coordination and cooperation for heterogeneous systems of systems is still poorly understood

ship to destinations. Specialized ships will assist other ships, for example in ice-operations, or in emergency response. Teamed operations involving ships, and other underwater, surface and air vehicles will advance planetary studies by providing truly 4D synoptic observations with adaptation of spatial and temporal resolution to observation needs. Extrapolations to mobile offshore autonomous bases are easy to make. The same concepts will be used in security applications, as well as in military operations. The concept of loyal wingman from air operations will inspired ship operations in which multiple robotic assets will assist the operation of isolated or convoyed vessels. Finally, underwater exploration and sustainable management will rely heavily on new ship designs capable of supporting persistent operations in the open ocean.

1. J. Borges de Sousa, P. McGillivary, J. Vicente, M. Nunes Bento, J. Passos Morgado, M. Madruga Matos, R. Bencatel, and P. Mónica de Oliveira, “Umanned Aircraft Systems for maritime operations”, Handbook of Unmanned Aerial Vehicles (Eds. Valavanis, K.P., & Vachtsevanos, G.J.). Springer Verlag, New York, 2014.

2. The Unmanned Systems Integrated Roadmap FY20112036, Office of the Secretary of Defense USA DOD, 2011

Sneak Peek of the Future

PORTUGAL’S GALP

Ticking all the boxes Portugal’s Galp is rising to the challenge of 2020 – the development of a proprietary 0.50% Sulphur fuel is well underway and the company is also committed to maintain production of HSFO to supply scrubber-equipped vessels.

Galp is Portugal’s market leader for bunker fuel and it is ready for the challenges ahead, fully embracing the task of providing new fuel to meet the requirements of the International Maritime Organization’s (IMO) 0.50% global sulphur cap in 2020.

Bunker suppliers and shipowners are looking at the upcoming IMO regulation with a lot of uncertainty; predicting if the preferred compliance option will be the use of exhaust gas abatement systems (scrubbers) or burning compliant fuel (residual very low sulphur fuel oil (VLSFO), marine gasoil (MGO) with 0.10%-0.50% sulphur or LNG is not an easy task. Recently, a South Korean shipyard delivered what was said to be the first VLCC equipped with a scrubber. Cruise ship companies are also investing in exhaust gas cleaning systems, but the relative amount of time they sail in emission control areas (ECAs) is higher than tankers, bulkers or container ships, which helps the scrubber economics. Nonetheless, scrubber takeup has been somewhat slow in recent years; out of a world merchant fleet of

around 90,000 vessels, only 300- 400 ships are equipped with scrubbers at this moment.

As for the way in which refiners will deal with the disruption in 2020, there are some confirmed projects, namely the installation of cokers and residue hydrocrackers, but most of

One of the biggest concerns of ship owners is the stability and compatibility of the new VLSFOs due to the recent ‘traumatic’ experience with ULSFO

them will not be ready in time for the deadline.

Consequently, the most likely options in 2020 are compliant fuels, such as 0.50% sulphur fuel oil (VLSFO) and marine gasoil, as LNG infrastructure will not be available in most ports when the deadline kicks in, and in the period immediately following this.

Considering that there is insufficient desulphurization capacity to take high sulphur heavy fuel oil (HS HFO) to VLSFO, the only alternative to enable refiners to supply the global VLSFO market will be through blending sweet residue with other low sulphur components.

Producing straight-run VLSFO will only be possible with very sweet crude, which is not available in the required amounts to meet market demand in 2020 and onwards: The graph overleaf does not include shale oil because the amount of vacuum residue from these crudes is close to 0%, which means they are not suitable to produce residual fuel oil.

However, they may be a valuable option to refiners that choose to stay out of this business after 2020. Normally, treating high amounts of shale oil in a typical refinery designed to treat heavier crudes represents an additional investment.

One of the biggest concerns of shipowners is the stability and compatibility of the new VLSFOs due to the recent ‘traumatic’ experience with the use of ultra-low sulphur fuel oils (ULSFO) (0.10% Sulphur or ECA fuels). Even if some of the reported issues concerning the stability of this product did occur, they were certainly exaggerated. In truth, the dramatic drop in Brent prices that followed the implementation of ECAs in 2015 is probably the main reason why ULSFO never really took-off. The reality is that back in 2015, 0.10% sulphur MGO was cheaper than 1.0% sulphur residual fuel oil in 2014. Besides, the MGO versus ULSFO differential was not wide enough to encourage shipowners to test this new product.

With VLSFO things may be a lot different, for two main reasons: first, the refiners don’t have enough capacity to supply the world’s entire merchant fleet exclusively with MGO; and second, the differential between VLSFO and MGO (even with 0.50% sulphur) will be more pronounced than was the case between MGO and ULSFO. In other words, the incentive to consume VLSFO will be there. However, regardless of these factors, shipowners are obviously concerned about the potential stability and crosscompatibility of these new fuels.

The stability of a fuel oil is closely related to the behaviour of the colloidal systems formed by the four families that constitute this product: saturates, aromatics, resins and asphaltenes. When we talk about VLSFO fuel oil incompatibility, we are essentially talking about the flocculation of asphaltenes. Typically, asphaltenes are stabilised by resins and 29

Sneak Peek of the Future aromatics and destabilised by saturates. Asphaltenes are only present in residue fractions, which means that lighter cuts, such as vacuum gasoil (VGO), by definition, will have no stability issues, although this may not be true for crosscompatibility. In reality, low sulphur vacuum gasoil (LSVGO) can also play a role in the bunker business after 2020, which could put added pressure on this product’s price.

Here at Galp, we have been testing close to 100 different VLSFO formulations since the beginning of 2016, to understand which are the most competitive and stable blends. This work has involved several lab analyses, including p-value determinations, Saturates, Asphaltenes, Resins and Aromatics (SARA) analysis, compatibility testing and Total Sediment Potential (TSP)/Total Sediment Accelerated (TSA) determinations. As well as analysing pure blends, we ran several crosscompatibility tests to understand if two stable blends could result in an unstable blend after mixing. This work will continue until 2019 but right now, Galp is 100% confident that it can produce a completely stable VLSFO if certain ‘blending rules’ are taken into consideration.

Earlier this year, we produced our first large

scale batch of VLSFO in our Matosinhos refinery, near Oporto. This 2-kton batch has shown good compatibility results and was suitable for use as marine bunker fuel. We even did an ageing test in a heated on-ship tank for a month without any relevant modifications of properties.

This work will continue until 2019, but Galp is 100% confident that it can produce a completely stable VLSFO if certain ‘blending rules’ are taken into consideration

It is part of Galp’s strategy to grow its marine business in the coming years, due to several factors: our location and strong presence in important trading ports, namely Lisbon, Sines and Setubal; the decrease in gasoline and diesel consumption due to the electrification of road transport modalities; and an expected increase in bunker fuel consumption in the future. Naturally, we will continue to work on our formulations and keep on testing new alternatives with the goal of producing a stable, compatible and competitively priced 0.50% sulphur residual bunker fuel that can be supplied to ships from 1 January 2020 in all Portuguese ports.

Moreover, Galp is planning to continue the production of HSFO and the company will have all the required facilities and logistics in place to provide its clients who have already opted to equip their ships with scrubbers.

In the end, it all comes down to responding appropriately to our clients’ needs and to the wider world’s concerns – and our own corporate responsibility – to preserve the planet for the coming generations. These are perhaps the two most basic requirements for any company wanting to stay in business in the 21st century.

INTERNATIONAL EDITION FROM NOVEMBER 2018 ON

30

The world greatest offshore windfarm has been officially inaugurated, in the Irish Sea, covering 145 square kilometres

mostly used as starting fuels – enables a better conservation of fossil resources and thus improves oil products footprints. As a sea lover, Vincent Favier also said that ‘collecting slops and financially helping ship owners to unload in harbours also helps prevent sea environment from wild and polluting waste.’

HIGH TIME FOR INTERNATIONAL DEVELOPMENT

ECOSLOPS

Improving oil waste in Sines for nearly four years

This process, which is 100% transparent and meets every single international rule, has proved efficient on both industrial and international levels. The firm is now internationally oriented and is currently setting up a second production unit in Marseille, South of France. A number three unit should operate in Antwerp, Belgium in 2020. In spite of this geographical diversification Sines remains a necessary development center for Ecoslops, which is currently developing treatment solutions mini-P2R - for locally influential harbours.

Thanks to their long-time expertise mini-P2R is now considered as a modular solution: it will prove shorter, cheaper and easier to build outside its physical location. Exporting the oil waste revaluation process will therefore be easier and will be carried out outside its physical location as well. Many commercial outlets for this microrefining process are currently in the pipeline, mostly in Oman, Morocco, Cameroon, Mauritius, Martinique or even in Cape Verde Islands. Ecoslops will therefore have some fish to fry for the next four years!

Sines was chosen in 2013 by Ecoslops to set up their ten year top notch innovative pilot technology project. The company has implemented its process to open its first global waste processing unit.

Thanks to both a production capacity of 30,000 tons of second generation oil products per year and major partners such as the Sines Port Authorities, Galp, EDP or even IAPMEI, Ecoslops has been able to diversify the harbour offer. More than 20 million euros of investments have been necessary to build the unit, which is now genuinely part and parcel of the local economy ; all this has consequently generated 40 new jobs.

This is a world premiere and this has been done in Sines’, Ecoslops CEO Vincent Favier announced. The recycling compant has published the results of an environment study and has proved that its specific microrefining of oil products has three times fewer CO2 emissions than the traditional oil production. Giving a second life to some products formerly considered as mere waste – the ones that cement manufacturers 31

Sneak Peek of the Future JORGE D’ALMEIDA

The Economics of LNG Propulsion The LNG industry is a relatively young industry, at barely sixty years old. It all started with the revolutionary design of the first LNG carrier, the “Methane Pioneer”, converted from a general cargo ship in 1958.

The storage of natural gas (mostly methane) in liquid form creates a tremendous technical challenge due to the fact that one needs to reduce its volume by a factor of 600 and, for security reasons, LNG must be stored at its boiling temperature of minus 161º C at or close to atmospheric pressure. J.J.Henry Co, a New York naval architecture firm, where I was privileged to work in the 70’s, was responsible for the design of the “Methane Pioneer” and for the development of several new generations of purpose built LNG carriers, starting with the “Methane Princess” in 1964. Incidentally, J.J.Henry was also responsible for the design of the first container carrier, Malcom McLean’s “Ideal X”.

Leakage from LNG storage tanks is unavoidable. By design, the leaked gas (boil-off gas or GRAPHIC 1 LNG INDUSTRY TIMELINE

32

by Jorge

D’Almeida

More than 40 years of experience in maritime sector, Engineer and Naval Architect by IST with MBA in Business and Internatinal Finances, has worked for more than 12 years in USA at J.J.Henry Co. and U.S.Lines Inc. where has also closely worked with the so called containers’ father, Malcom McLean. Former CEO of PSA Sines, is now the CEO of Saconsult and invited Professor of Nova School of Business and Economics.

BOG) is captured and used as propulsion fuel.

The successful experience in LNG carriers led to the adoption of LNG fuel in other types of vessels, starting with the Norwegian ferry “Gl-

utra” in 2000. As of December 2017, the fleet of vessels with LNG propulsion, excluding LNG carriers and small river vessels, amounted to some 85 units (15 in Europe) and an order book of 120 (60 in Europe). The total represents a year-on-year jumpof 25%. The most common vessel types are ferries, platform supply vessels (psv) and tugs, which have a relatively short autonomy, hence bunkering is easier to arrange.

In December 2012 the US shipping company Totem Ocean Trailer Express (TOTE) contracted General Dynamics NASSCO shipyard in San Diego, California for the design and construction of two 3,100 TEU advanced Marlin-class containerships. They are the world’s first containerships powered by LNG. The first one, Isla Bella, was launched in April 2015 and is being operated by Tote Maritime (ex- Sea Star Line) between Jacksonville, Florida and San Juan in Puerto Rico. She was joined by her sister ship, Per del Caribe, in early 2016.

TOTE’s Marlin-class vessels are equipped with a dual-fuel, slow-speed 8L70ME-C8.2-GI engine, built by Doosan Engine under license from MAN. This engine has the option of using either heavy fuel oil (HFO) or gas as fuel.

The MAN Diesel and Turbo engine package, including turbochargers, has no methane slip and ensures low emissions, making the ships more environment-friendly.

In 2016, during the Posidonia trade fair in Athens, Greece, the Greek shipowner Arista Shipping (wich operates out of Sintra, Portugal) announced a revolutionary bulk carrier design of the “kamsarmax” type. It will be the world’s first LNG powered deep sea bulk carrier. This project, named “Project Forward”, is

Commercial fisheries can remain profitable despite sea warming if sustainable measures are taken, scientists say

GRAPHIC 2 EMISSION REDUCTION OBTAINED BY SWITCHING TO GAS

LNG. These ships will be built in China, five at Hudong-Zhonghua and four at Waigaoqiao, to be delivered between the end of 2019 and the end of 2020. They will be propelled by the largest gas-burning engines ever built, Winterthur Gas & Diesel Ltd (WinGD) low-pressure, twostroke 12X92DF engines rated at 63,840 kW. Undoubtedly, the groundbreaking TOTE, Arista and CMA CGM initiatives will be closely monitored and, most likely, will be replicated by many others in the near future, as the International Maritime Organization (IMO) and EU imposed environmental restrictions loom ahead.

REGULATORY FRAMEWORK It is well known that shipping is the most environmentally efficient way to move cargo. However, the sulphur content of heavy fuel burned in slow speed diesel engines is some 3,000 times higher than what is authorized for diesel used in road vehicles. Not surprisingly, IMO GRAPHIC 3 PROVEN NATURAL GAS RESERVES, TN CBM

Nitrogen is the other major pollutant from ship’s emissions. Its reaction with oxygen at high temperatures during combustion generates nitrous oxides (NOx) that can be transported over hundreds of miles and deposited as acid rain. It also plays a major role in the atmospheric reactions that produce smog.

In 2008 IMO established standards for NOx emissions from ship engines. It is a three-tier structure with progressively tighter emission standards depending on the engine’s installation date. The allowed emission levels are set as follows: T ier I: for engines installed in ships constructed on or after January 1st, 2000 and

GRAPHIC 4 NUMBER AND SIZE OF TRAINS

SOURCE: IGU World LNG Report 2015

SOURCE: US Energy Information Administration (EIA)

being developed by Arista Shipping in cooperation with Wartsila, American Bureau of Shipping, Shell, Deltamarin and leading LNG engineering company GTT. The design, based on Deltamarin’s B-Delta class, will cover a range of 80,000 to 210,000 dwt (maximum size allowed at Kamsar, Guinee, corresponding to a length of 229 m) and will be powered by Wartsila’s 31-DF dual-fuel medium speed engine.

Construction of the first units will start this year at China’s Jiangsu Yangzijiang Shipyard.

More recently, CMA CGM ordered nine 22,000 TEU container ships that will be the largest non-LNG carriers to be powered by

times lower than the 2012 limit; MARPOL admitted that the deadline might be extended to 2025, pending a feasibility study to be conducted in 2018; however, in October 2016 IMO took the decision to set 2020 as the definitive deadline.

has established strict rules to lower the sulphur content of marine fuels, as per Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL), transposed into EU Directive 2012/33/EU, to wit: S ince January 1st, 2012 the sulphur content of marine fuels cannot exceed 3.5%; S ince January 1st, 2015 the sulphur content of marine fuels in the Emission Control Areas (ECA) cannot exceed 0.1% (the European ECA include the Baltic Sea, the North Sea and the English Channel); F rom January 1st, 2020 the sulphur content of marine fuels cannot exceed 0.5%, i.e. 7

before January 1st, 2011, the NOx emissions may not exceed 17 g/kWh; T ier II: for engines installed in ships constructed on or after January 1st, 2011 the NOx emissions may not exceed 14.4 g/ kWh; T ier III: for engines installed in ships constructed on or after January 1st, 2016 the NOx emissions may not exceed 3.4 g/kWh, when the ship is operating In a designated Nitrogen Emission Control Area (NECA).

There are several technical solutions to meet the MARPOL requirements. However, natural gas is 33

Sneak Peek of the Future GRAPHIC 5 IGU WORLD LNG REPORT 2015

SOURCE: IGU World LNG Report 2015

currently favored by most shipowners for operational and economic reasons.

According to engine manufacturer Wartsila, the emission reductions obtained by switching to gas are quite impressive: 95% in particulate matter (PM), 99% in sulphur oxide (SOx) 30% in carbon dioxide (CO2) and 85% in nitrous oxide (NOx).

To be sure, there still are many barriers to the wide spread adoption of LNG propulsion. The major ones are: (i) additional capital expenditure (capex), (ii) larger fuel tank size, hence lower payload, (iii) methane slip at lower engine load, and (iv) lack of LNG bunkering infrastructures. Several EU sponsored projects are dealing with these and other issues. For example, GAINN 4 MOS, led by Fundación Valenciaport, is an action to improve the Motorways of the Sea network in six Member States (Spain, Italy, France, Portugal, Slovenia and Croatia) by carrying out engineering studies of ships retrofitting and port LNG bunkering stations.

It should be noted that natural gas, being a fossil fuel, will not have a major impact in the reduction of the carbon footprint. Therefore, the quest for non-fossil fuels will continue to gain pace and we will witness the gradual introduction of alternative fuels such as biofuel and fuel cells in ships over the long haul. Renewable energies (solar and wind) have great potential to mitigate carbon emissions, but are not seen as viable alternatives for commercial shipping in the foreseeable future.

SUPPLY CHAIN Typically, an LNG project or “train” consists of a liquefaction plant at the gas source, a gasification plant at the receiving end and one or more LNG tankers, often purpose-built and funded on a project finance basis. The proven natural gas reserves amount to around 200 trillion cubic meters, led by Russia, Iran, Qatar and USA. These four countries control close to 60% of the

GRAPHIC 6 HENRY HUB PRICE

Dollars per Million Btu

SOURCE: Henry Hub Natural Gas Spot Price

global reserves. The number and gross capacity (in million of tons per annum or mtpa) of trains commissioned since 1964 is shown below. The geographical spread of the receiving terminals is of particular importance, to ensure availability of LNG bunkering stations. The graph below shows that Japan and USA dominate the landscape, but Europe is well served both in the Atlantic and in the Med. It should be noted that Sines, Portugal has great potential to become a leading LNG bunkering station due to its geostrategic location and infrastructure facilities. Like many other commodities, natural gas is traded in spot and futures markets. The Henry Hub Price, denominated in US$/mmbtu (millions of British Thermal Units) is generally used as the primary reference price in the natural gas market. Incidentally, the name comes from the Henry High School that stood in the gas rich town of Erath, Louisiana, before being destroyed by hurricane Ike in 2008.

Historically, LNG price in the world market has been closely tied to oil price. Although a gradual migration from oil-linked pricing to spot or hubbased pricing is likely, it is reasonable to assume an LNG reference price at 25% - 30% discount from MDO on a per BTU basis. Caution: history also teaches us to expect the unexpected in the energy market.

COST–BENEFIT ANALYSIS At this stage, there is not enough experience and data to present a generalized analysis on the economic and financial merit from switching to LNG propulsion. Indeed, each case is a case. Accordingly, the following are general guidelines derived from limited available information.

PROPULSION PLANT There are two main types of LNG burning engines: single fuel and dual-fuel. Single fuel engines require spark plug ignition (Otto cycle), while dual-fuel engines run either on LNG mode or diesel mode. There are two alternative dual-fuel engine designs: medium speed (four stroke) or slow speed (two stroke). Four stroke engines require the injection of a small amount of diesel fuel into the combustion chamber to ignite the lean air mixture, while gas is injected at low pressure. Two stroke engines differ in that the gas is injected at high pressure together with the pilot diesel fuel, according to the normal diesel cycle. It is rather easy to switch between gas and diesel modes on the go.

Dual-fuel engines are largely preferred for ship propulsion due to their fuel flexibility under different operating scenarios.

CAPITAL EXPENSES CAPEX Additional capex for LNG propulsion is re-

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China is the world’s largest maritime nation, according DNV GL and Menon Economics

GRAPHIC 7 ADDED COST OF INVESTMENT FOR LNG PROPULSION

GRAPHIC 8 LNG PROPULSION IMPACT

load, that very much depends on ship type.

In the above mentioned DNV study the negative impact of tank size is estimated at 36% of the additional capex for a ropax vessel.

Operating Expenses (OPEX) The main impact of LNG propulsion on opex will be a reduction in fuel costs. Needless to say, the cost – benefit analysis is highly dependent on the fuel cost projections throughout the life of the investment. The best way to deal with this uncertainty is to run calculations for a series of price scenarios, thus establishing a breakeven point that determines the relative merit of LNG versus diesel propulsion. For example, a scholarly study on Iceland fishing vessels considered six LNG/MDO price scenarios to determine the Net Present Value (NPV) breakeven point for new buildings as well as for conversions. The results show that NPV may reach breakeven within a wide time window, typically from 7 to 17 years. Notwithstanding this lack of precision, the study leads to the conclusion that LNG propulsion should generate a positive NPV within the useful life of the vessel. On the other hand, some of the conversions that were analyzed did not reach breakeven within the vessel’s remaining life.

IMPACT As a rough guideline, the waterfall chart below shows the relative impact of the main capex and opex items, of switching from diesel fuel to LNG, over the lifetime of a newly built general cargo vessel. The data has been normalized to show a total investment (shipyard + engine + equipment) of 100 and assumes a price differential of US$ 10 – 15 /mmBTU between LNG and MDO.

CONCLUSION quired for an LNG burning power plant (single or dual fuel). DNV (now DNV GL) provides a rough guide to the additional capex in €/kW for a dual-fuel power plant with an installed power between 1,000 and 9,000 kW1.

Due to the lower energy density of LNG compared to diesel, LNG tanks require about 50% more space than MDO. This will require additional vessel cubic (hence, capex) or a loss in payload, that very much depends on ship type.

In the above mentioned DNV study the negative impact of tank size is estimated at 36% of the additional capex for a ropax vessel.

Operating Expenses (OPEX) The main impact of LNG propulsion on opex will be a reduction in fuel costs. Needless to say, the cost – benefit analysis is highly dependent on the fuel cost projections throughout the life of the investment. The best way to deal with this uncertainty is to run calculations

for a series of price scenarios, thus establishing a breakeven point that determines the relative merit of LNG versus diesel propulsion. For example, a scholarly study on Iceland fishing vessels considered six LNG/MDO price scenarios to determine the Net Present Value (NPV) breakeven point for new buildings as well as for conversions. The results show that NPV may reach breakeven within a wide time window, typically from 7 to 17 years. Notwithstanding this lack of precision, the study leads to the conclusion that LNG propulsion should generate a positive NPV within the useful life of the vessel. On the other hand, some of the conversions that were analyzed did not reach breakeven within the vessel’s remaining life.

Due to the lower energy density of LNG compared to diesel, LNG tanks require about 50% more space than MDO. This will require additional vessel cubic (hence, capex) or a loss in pay-

The main driver for LNG propulsion stems from the tighter IMO and EU environmental restrictions, particularly the sulphur content limit of 0.5% in marine fuels that will be imposed from January 1st, 2020. Current technology seems to favor LNG propulsion over other alternatives .

However, general conclusions cannot be drawn because the economics are still somewhat fuzzy.

The results are highly depending on energy prices and on the individual vessel operating profile. For example, increasing the percentage of time spent in ECA, with a stricter sulphur limit of 0.1%, will favor the usage of LNG. Admittedly, there is a tendency to extend ECA around the world, which is a strong argument in favor of LNG propulsion.

1 LNG as fuel for ship propulsion”, C.W.Graugaard, Deputy Head of Maritime Srvices, DNV 2010 2 LNG as ship fuel in Iceland”, G.J. Jonsdottir, Reykjavik University, 2013 3 Costs and Benefits of LNG as Ship Fuel for Container Vessels”, MAN Diesel & Turbo, 2012

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Sneak Peek of the Future ANTÓNIO ALVES VIEIRA

Aquaculture is the only solution...

Over the course of the past three decades, the global consumption of fish, shellfish, molluscs and cephalopods has increased about 2.5 times, going from aproximately 60 milion tons/year, in the late 80’s, to the current 155 milion tons/year.

Between 2008 and 2013, 40% of the increase in consumption is due to the increase in population, but 60% is due to the general increase in revenue. In this period the global consumption per capita increased from 18 to 20 kg / year (FAO nº 607). The distribution of the fish consumption in 2013 shows strong regional disparities: Asia 70%, Europe 11.6%, the Americas 9,8%, Africa 7.8% and Oceania 0.8%.

The expected evolution consumption for 2030 of the sea fish, freshwater fish, diadromes, crustaceans, molluscs and cephalopods have been estimated on 186.3 millions tons / year 36

(FISH TO 2030, World Bank 2013). In this projection, it’s evident the increase of the chinese consumption, due not to the populational growth that will be of only 3.4 % in that period, but instead due to the increase in the domestic product of 177%, that will lead to a fish consumption of about 53.2 millions tons / year.

For India, the predicted increase for the GIP in this period is 92.6% and to the Southeast Asian Countries 88.4%, with the inherent predictable consequences to the fish consumption.

In the same period, the study points to the consumption stability for the Europe and Central Asia, some decrease in the Americas and

Between 2008 and 2013 the global consumption per capita increased from 18 to 20 kg / year (FAO nº 607)

Japan and a moderate increase in Africa. That means stability or slight decrease in the developed countries and a variable strong increase in the developing countries.

Worth refering that regarding the 2010 data, 38% of the produced fish have been exported, 67% of which coming from developing countries, which clearly shows how global this market is, whith a high degree of integration and where everyting that happens has impacts on all the members. This means that all the problems that we can foresee to the future, arround problems of eventual scarcity of the offer and the increase of the prices, are not only an asian problem but will have strong incidence at regions like Europe higly dependent of imports.

To go further ahead and foresee the scenario for 2050, in the absence of specific analysis, the only possibility, despite its inherent fragility, consists in extrapoling the data calculated for 2030. For that, we prefer a very conservative perspective only looking to the global populational increase and not taking in consideration the increases corresponding to the improvement of the standart of living of the population.

As such, considering that the estimated global population in 2030 is around 8.3 billion people, and that in 2050 will be, according the United Nations, around 9.7 billion people, we can consider that the consumption of the various categories of fish that have been considering, will be around 218 million ton / year in 2050 1. It’s important to mention that this tendancy for the consumption of fish occurs in a context where the increase of the meat production is very limited by the shortage of land and water and by the less efficiency regarding the food conversion. So that, fish consumption is the inescapable alternative to meat.

GLOBAL FISH PRODUCTION ESTIMATES IN MEDIUM AND LONG TERM Looking from the point of view of the global fish production, we must find out that there are an evolution on the production paradigms. In a context of an easy disposal of sites to produce inshore and of cheap and plentiful manpower, the answer of the production to the market solicitations have been done but with some structural adaptations.

In only twenty years, from 1993 to 2013, besides a great increase in the consumption,

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Sneak Peek of the Future there was a very significant variation in its composition. The sea fish that used to represent 52.6 % of the consumption in 1993, decreased to 36,7 % in 2013. On the other hand, fresh water fish and diadromes which used to represent 22.9 % increased to 37,9 % (FAO nº 607). This can be explained by the stagnation of fishing at sea, but also by the small increase of the marine aquaculture at the seashore, due to the lack of protected locations for that. Despite this, aquaculture in fresh water and in estuaries increased significantly, whith a particular incidence in China which currently represents almost 50 % of the global aquaculture production, whith a particular incidence in the production of fresh water fish of around 25 million ton / year (carp and tilapia). Others countries of the Asia-Pacific Region also contribute for

this predominance of aquaculture in freshwater and estuaries (Pangasius).

According to FAO (Doc. nº 607), from 2015 to 2020 the potencial increases in consumption will be of 11.2 million ton / year for sea fish and 15.8 million ton / year for freshwater fish and diadromes. These values were adquired through a linear regression which uses specific coeficientes of demand elasticity, regarding the revenue and the price, for each kind of fish considered. These coeficients are used for short term evaluation because they will change over the time.

However, in this study where have been considering the stimulant effect of the prices and the existing production capabilities in each case, it is verified the impossibility to ensure the demands of the consumption.

ENVIRONMENTAL IMPACTS OF OPEN-OCEAN AQUACULTURE

The gap is particulary serious in respect to sea fish production, with a predicted increase of only 500 000 ton, creating a deficit of around 10.7 million tons, owing to the inability of the infrastructures to answer the demand. The plausible explanation remains in the fact that mariculture is limited to the protected areas regarding the marine agitation, which are rare in a global context, and are pratically occupied, at least the ones which have accessibility to the market.

THE ROLE TO BE PLAYED

BY OFFSHORE AQUACULTURE The following graphic shows the growth rates relative to fishing and aquaculture verified since 1960 until now, and according to previsions made until 2029.

The decrease of the capture is not a novelty and probably will deacrease in the futur more than is considered in the graph.

Regarding aquaculture, the rates verified from 1980 to 2009, despite the decreasing, have allowed the rising development of aquaculture production. In fact, they have varied between 11 and 6 % during that time frame, but were applied to bases of a rising annual value. Still, the foreseen decrease for the current decade for 3 % and, even more importantly, what is predicted for 2020 – 2029, less than 2%, decisively compromises the contribution of aquaculture to the high levels of demand as we have been referring, which imposes for the production growth rates much hight for it, to be possible to ensure the great growing demand (9.9 % for the period from 2015 to 2020 as refered by FAO nº 607).

So, the only possible conclusion, that is important to emphasise, is that the authors of the World Bank study clearly testify the inexistence of the offshore exploration nowadays.

But express also the non consideration for the

Regarding aquaculture, the rates verified from 1980 to 2009, despite decreasing, have allowed the rising development of aquaculture production 38

The Port of Lisbon is a sheltered and multifunctional port, with 16 terminals dedicated to all types of cargoes and cruise passengers, connected with the world’s main ports and international shipping players. Located in the largest consumption center and in the main economic region of Portugal, the Port of Lisbon serves also as a direct door to the Iberian market. The future improvement of the inland waterways and of IT Systems to the logistic platforms will position the Port of Lisbon as a more efficient and sustainable one.

Ship your cargo through Port of Lisbon and discover the Atlantic meeting point

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Sneak Peek of the Future WORLD’S FIRST ‘OFFSHORE’ AQUACULTURE

The Ocean Farming facility is a new and innovative design, developed to overcome the challenges of more traditional inshore fish farming facilities by being located in deeper waters, further from the coast.

future of the offshore aquaculture contribution for the solution of this problem, attitude which is urgent to correct, once only the investment in offshore aquaculture can make the difference inverting this tendency.

The main actual contribution to the fish production through the aquaculture are the fresh water sistems, that in China has, among others expressions, the tipical configuration of paddy-fields where at the flooded beds, the rice plants are cultivated together with carps and ducks. Considering that the increasing rural exodus currently happening in China will lead to the progressive desertion of these cultivated fields or, to an alteration on the technology, to attain higher rice productivity, in which the cultivation will begin using herbicides which will prevent the fish 40

production, we can foresee why there is predictable a decrease, and not an increase in freshwater fish production.

In short, once the marine aquaculture growth in protected areas appears neglectable by the unavailability of those places, the increasing production that must be attained to satisfy the potencial demand at a global level, in medium and long term, must be faced as an objective for offshore aquaculture.

AVAILABLE SPACES FOR THE PRACTICE OF OFFSHORE AQUACULTURE It remains to know if there are available spaces to the aquaculture offshore and where are they located. The excelent publication A global assessement of offshore mariculture potential from a spatial perspective (FAO nº 549) where is made the inventory in a global scale of the adequate spaces for offshore aquaculture production, gives the answer.

Using geographical information systems available in a global scale, the study proceeds by successive phases for the identification of the areas where offshore activity will be feasible.

On what concerns the fish production shows

the world possibilities for Cobia and Salmon as representative species to cultivate. As can be constated at the figure, the use of only 5 % of the identificated areas covers the space needed

by Offshore Aquaculture for the production of fish until 2050.

OFFSHORE AQUACULTURE TECHNOLOGY The equipments that are being developed to enable the fish production at the high energy environment that characterises the open sea situations, can be classified as hard or soft solutions.

One example of the first case is the world’s largest autonomous cage, an Oil &Gas technology adapted to the fishfarm. With a volume of 250 000 m3 and a producing capacity just to 7 500 tons by batch, is a solution adapted to some norvergean fishfarms that are the largests in the world.

At OFISEQ – Offshore Fishfarming Equipments, Lda we are developing feeding platforms and cages, with dimensions adapted to a lot of types of fishfarms, that can withstand the most severe storms by submerging just to 30 / 40 m deep where the surface agitation is not perceived.

Direito&LegislaçãoLaw&Legislation Cristina Lança ADVOGADA

Portugal’s Shipping Tax Regime There are two different tax regimes existing in Portugal concerning the Shipping Industry, one is of the International Business Centre of Madeira and the other is the general tax regime for all of Portugal, including the Azores.

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THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA

Starting with the speciaL tax regime of International Business center of Madeira (IBC of Madeira). This tax regime allows the incorporation of new entities within the legal framework of IBC of Madeira until the end of 2020, granting a reduced corporate tax rate of 5%, applicable on the taxable income until the end of 2027.

On the development of business activities with portuguese companies there are no restrictions and portuguese companies will be taxed at the general corporate tax rate in Madeira of 21%.

However in the case of international services activities the reduced rate of 5% is applicable to profits from operations exclusively carried out with non-resident entities or with other companies operating within the frame of IBC of Madeira.

Relevant to say that production and assembling activities carried out by companies in the Industrial Free Trade Zone of Madeira benefit from the tax reductions also in operations with portuguese residents.

In order for Madeira’s IBC companies to qualify for the Portuguese participation exemption regime, applicable to both dividents and capital gains, the following conditions must be fulfilled:

Minimum

shareholding of 10% held for 12 consecutive months;

T he subsidiary must be subject to taxation

at a rate of at least 60% of the portuguese general rate; T he subsidiary cannot be resident in a jurisdition included in Portugal´s “black list”

In addition to the 5% reduced tax rate, manufacturing companies in the Industrial Free Trade Zone may also benefit from 50% reduction on their taxable income, when fulfilling two of the following criteria:

T echnical innovation, new products and

procedures contributing this way to the modernization of the economy; I ntroduction of new activities of added value diversificating the regional economy; F ixation of qualified human resources; C ontribution to environmental improvement; C reation of 15 jobs for a period of 5 years.

The companies will also benefit from a suspension regime, according to which import duties will be charged on the no-E.U., incorporated raw materials and components only when the final products leave the IFTZ (International Free Trade Zone of Madeira).

Non-resident single and corporate shareholders of Madeira´s IBC Companies will benefit from a full exemption from withholding tax on dividend remittances from the Madeira companies, provided that they are not resident in jurisdictions included in Portugal´s “black list”.

Portuguese corporate shareholders will also be exempt if holding a participation of at least 10% for 12 consecutive months.

It will be applicable also other benefits: exemption on capital gains payments to shareholders not resident in black listed jurisdictions; no with41

Law&Legislation holding tax on the worldwide payment of interest, royalties and services.

Capital duty and other local taxes: documents, contracts and other operations requiring public registration carried out by IBC companies will benefit from 80% exemption on stamp (capital) duty, provided that other parties involved are not resident in portuguese territory or are companies operating within the legal framework of the IBC of Madeira.

Companies licensed in the IBC of Madeira will also benefit from an exemption of 80% applicable to municipal property tax and property transfer tax, regional and municipal surtax and any other local taxes.

All companies licensed to operate in the International Business Centre of Madeira may also benefit from the large network of international treaties to avoid double taxation ratified by Portugal.

To qualify for tax reduction, companies incorporated in Madeira’s IBC have to comply with one of the following requirements:

C reation of 1 to 5 jobs in the first 6 months of operation and undertake a minimum investment of €75.000 in the acquisition of fixed assets, tangible or intangible, in the first two years of operation; C reation of 6 or more jobs in the first 6 months of operation.

The reduced corporate tax rates are applicable up to a ceiling placed upon the anual taxable income, which varies according to the number of employees, as follows:

Union Register.

All entities undertaking the maritime transportation of persons and goods operating from any jurisdiction may register vessels in MAR. Flying the Portuguese flag gives full access to continental and domestic cabotagem and a competitive tax regime applicable both to vessels and shipping companies.

Commercial vessels, oil-rig platforms and commercial and pleasure yachts may be registered in MAR, benefiting from the services of the Private Commercial Register and Notary of Madeira´s IBC. MAR offers several operational and tax advantages to vessels and shipowners: To vessels: hight quality E.U. register; total access to continental and island cabotage within the framework of the E.U; a competitive social security regime which exempts non-Portuguese crew members from contributions to the portuguese social security regime, but only if it exists some form of security scheme is guaranteed (i.e. insurance, private ou public). The crew must be allowed to choose the portuguese voluntary social security regime or any other type of protection scheme. Portuguese crew members have be covered by the general portuguese social security regime with a reduced contribution rate of 2,7% (2% employer and 0,7% by employee); the wages of the crew are exempt from personal income tax; competitive mortgage system in which the mortgagor and the mortgagee, by written agreement, may choose the legal system of a particular country that shall govern the terms of the mortgage. By default the portuguese law is applicable.

a. Number of jobs: 1-2; Minimum Investment: 75.000€; Ceiling: 2.730,00€; b. Number of jobs: 3-5; Minimum Investment: 75.000€; Ceiling: 3.550,00€ c. Number of jobs: 6-30; Minimum Investment: Ceiling: 21.870,00€ d. Number of jobs: 31-50; Minimum Investment: Ceiling: 35.540,00€ e. Number of jobs: 51-100; Minimum Investment: Ceiling: 54.680,00€ f. Number of jobs: +100; Minimum Investment: Ceiling: 205.500,00€

To shipping companies: not mandatory to incorporate a company in Madeira´s IBC in order to proceed with the registration of a ship, it may be registered in the name of a company based abroad, which in this case, a legal representative in Madeira must be nominated with sufficient powers to assure full representation before the State and Regional authorities; shipping companies based in the IBC of Madeira benefit from the application of the tax regime of the IBC of Madei-

Companies will also be subject to one of the following maximum anual limits applicable to the tax benefits of the presente regime:

Companies licensed in the IBC of Madeira will benefit from several exemptions in applicable regional and local taxes

a. 20,1% of the anual Gross Value added; or b. 30,1% of the anual incurred labour costs, or c. 15,1% of the anual turnover.

There i salso the international Shipping Register of Madeira-MAR offers shipowners and shipping community low operational costs, maintaining quality levels and safety culture of an European 42

ra, namely reduced corporate tax rates of 5% on the profits until 2027.

2

GENERAL TAX REGIME

Portugal is creating an optional regime, a tax tonnage scheme, an alternative to the general regime that is not very favourable to the companies.

The European Comission has approved under EU State aid rules a Portuguese tonnage tax scheme which, together with a scheme to support seafarers, will encourage ship registration in Europe and contribute to the competitiveness of maritime transport, preserving the employment in the sector and promoting high environment standards.

Maritime transport companies will pay taxes on the basis of the size of the shipping fleet operated in maritime transport activities rather than on the basis of their taxable profits.

Tonnage taxation will appplied to a shipping company`s: Core revenues from maritime transport activities, such as cargo and passenger transport; shipbrokerage of ships and vessels owned by the company; deep sea research vessels; time and/or voyage chartering; Certain ancillary revenues closely connected to shipping activities (capped at a maximum of 50% of a ship´s operating revenues; Revenues from towage and dredging subject to certain conditions (50% must come from maritime transport).

For more environmentally-friendly ships, companies will achieve an additional reduction of 10%

Portugal is creating an optional regime: a tax tonnage scheme, an alternative to the general regime that is not very favourable to the companies

to 20% of the tax base under the tonnage tax scheme. There will be also general conditions that the shipping company will have to fulfill: Needs to have permission to exercise one of the activities connected to maritime transport; Subject to Corporate Income Tax wih registered office or effective management in Portugal and carry out commercial activities related to maritime transport; At least 60% of the fleet has to be registered in European Union or EEEA, part of the fleet can be chartered but at a maximum of 75%.

The fee will be between 0,20€ and 0,75€ for each 100 NT. To benefit from this favourable tax regime the Shipping Company will have to stay in it for at least five years.

Also, important to say that for a shiping company to benefit from the scheme a significant part of its fleet must fly the flag of a European Economic Area (EEA) state. This will encourage shipping companies to register their ships in the EEA and will prevent any discrimination between shipping companies and registries of different EEA state, thus preserving the internal market rules on freedom of establishment.

The Portuguese seafarers scheme exempts seafarers employed on vessels that are ilegible under the tonnage tax regime from paying personal income tax. It also allows them to pay reduced rates of contribution for social insurance.

The tax tonnage regime will be also applied to shipping companies in the IBC of Madeira.

Either way both regimes are favourable to shipping companies interested in establishing their business core here in Portugal.

CONFERENCE

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The Technological Challenge of Shipping By definition, homo sapiens has always lived under the shadow of technology – in other words, thinking about the world around him, the ability to imitate nature and develop the instruments necessary to reduce the difficulties encountered and to increase his life chances.

Ironically – or perhaps not – this evolution led to an inexorable increase in the complexity of life, creating new difficulties as fast as the problems conquered, which now also needed to be resolved and overcome.

It is a vicious cycle that man has managed, to some extent, to transform into a kind of virtuous cycle of development.

Such has been the case with shipping where, as with any business, the first question is necessarily: how do you foresee the evolution of demand in the future?

It is the million dollar question.

What is it that we know and consider as known in so far that we can consider anything already known?

In principle, that which we can determine as more or less certain, in accordance with the evolution of the world, is that the consumption that we have experienced will continue to rise.

Unfortunately, three factors compete to moderate any optimism we may hold. Firstly, 3D printing continues to create profound disruption in manufacturing; we know the disruption will be profound, but not yet to what extent, nor are we able to quantify. Nor, in second place, are we able to say what disruptions the natural economic and social development in Asia will lead to, although we are aware that the competitive advantages of the past are unlikely to remain in the future. Moreover, and of no lesser importance, there will be alterations in consumer behaviour brought about by profound technological change, with an economy increasingly characterized by sharing and largely devoted to entertainment.

44

Besides the sale of consumer goods, it would seem that, at the moment, not even the trade in raw materials is stable. Suffice to consider the energy transition to work out what this means, as well looking at the more or less ghost cities already built and spread across China.

Meanwhile, what we know is that: a) as a matter of survival, man is increasingly concerned with environmental matters; b) the growing territorialization of the sea is also evident and, whether exactly for environmental reasons or because mineral resources on land are increasingly scarce, mineral extraction from the seabed is inevitable. In today’s world, living at the beginning of a new Post-French Revolution era, dominated essentially by economic conflict, we should not be surprised at the widening gap between Blocs and no-one can say what will happen and what the consequences will be.

However, environmental concerns have immediate repercussions, not least the need for and imposition of reductions of emissions of

CO2, NOX e SOX, or ballast water management, which may lead to equally profound and immediate alterations, inclusively, in regards to investment needs.

When we consider investment in the context of a growing trend towards autonomous ships and seeing the extraordinary scale of the new aircraft carriers, it is clear that the world is changing and that there are other challenges, including financial, that are increasingly relevant.

Automation goes well beyond ships, however; it also affects ports, road transport, railways and processes, leading to the idea that shipping is simply becoming another element of the logistics whole.

How far will this transformation go? When will we see the rise of a new type of logistics ecosystem led by shipping, totally integrated but, at the same time, totally decentralized?

Is this not an inevitable trend, given the possibilities offered by a new technology such as the blockchain, allowing even the creation of a new currency solely for the shipping world?

The challenges are enormous, without question. And Portugal, a pioneer of the modern world since the first globalization, has an important contribution to give.

And it may have an important contribution owing to its own idiosyncrasy, to a great extent contrary to the era of industrialization, to massification, but with a systematic vision of the world and a prodigious imagination – a uniqueness – making it the ideal location to set up new Centres that will be necessary for research, development and innovation that will be required, whether for shipping, for robotics, automation, biotechnology, new energies or whatever.

If Portugal did not tire in other eras while embracing the world, from America to Australia, from Africa to the Indigo, not forgetting China or Japan, we know that it will not relax now until it has discovered “the new Indias that do not appear on the maps”.