MB92 Group · A joint effort for the oceans

A joint effort for the oceans DRIVING SUSTAINABILITY ACROSS THE SUPERYACHT SUPPLY CHAIN

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Index

04

12 08

20

3

I.

Introduction / PAGE 04.

II.

Methodology / PAGE 06.

III. Executive summary / PAGE 08.

An industry already on the move / PAGE 10.

V.

A joint effort across the ecosystem / PAGE 12.

VI. Interview: Emirates Team New Zealand / PAGE 20.

VII. The industry in numbers / PAGE 22.

VIII. MB92 in numbers / PAGE 24.

IX. Conclusions / PAGE 26.

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IV.

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INTRODUCTION

METHODOLOGY

EXECUTIVE SUMMARY

I

Introduction

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Jean-Marc Bolinger / MB92 Group CEO

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SPURRING COLLABORATION THROUGHOUT THE SUPPLY CHAIN For all the spectacular growth seen in recent decades, the yachting industry is today faced with a daunting challenge.

Either it becomes truly sustainable, or it risks disappearing, sooner rather than later.

Not all is doom and gloom, though. The sustainability challenge is also a phenomenal business opportunity for the industry. There are currently almost 6,000 superyachts of over 30 metres in operation around the world, most of which are motor yachts. Making this fleet sustainable represents tremendous commercial tailwind for those willing and able to catch it.

Refit shipyards should play a critical role in this transition and spearhead change. At MB92, we have actually been leading the way in many aspects for several years already, implementing initiatives that may seem like obvious moves to the neophyte, but that are unfortunately still far from mainstream in the industry.

For instance, we provide shore power connected directly to the national grid, thus eliminating the need for yachts to remain on generators while in the yard. We have also taken important steps to reduce waste generated at our facilities. Another example regards our new 4,300-tonne shiplift in La Ciotat which was built to the highest sustainability standards and includes innovative features to cancel any negative ecological impact.

But our responsibility does not stop at the gates of our shipyards. We need to consider sustainability in every aspect of a yacht’s lifecycle, from design to maintenance, refit, operations and end of life. Focusing solely on one aspect – say, for example, green propulsion – would be missing the point. It is our duty as well as our best interest to help make yachting truly sustainable.

This entails close collaboration throughout the supply chain, as well as with clients and their prescribers. The good news is that many players have already taken steps. Some yacht owners are still waiting for regulation to come through. We need to convince them that if they take the lead, they will benefit from being one step ahead.

We must consider sustainability in every aspect of everything we do. This is our chance to take the initiative and make our contribution to a more sustainable future, not just for the yachting industry, but also for the entire maritime ecosystem.

WE MUST CONSIDER SUSTAINABILITY IN EVERY ASPECT OF A YACHT’S LIFECYCLE

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Indeed, as the world moves forward on the path to a decarbonised and more sustainable economy, yachting is likely to be increasingly seen as an outlier, a legacy of a not-so-distant past when the climate crisis was not at our doorstep yet. This is why, at MB92, we are convinced now is the time to take action. This is also what the vast majority of our stakeholders expect from us.

BEYOND OUR GATES

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INTRODUCTION

METHODOLOGY

EXECUTIVE SUMMARY

AN INDUSTRY ALREADY ON THE MOVE

II

Methodology

The findings of this report are based on a panel discussion between renowned experts and institutions focusing on driving sustainability in the superyacht industry. They are also based on

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extensive research carried out by MB92 prior to the panel discussion, including a quantitative survey within the shipyard’s network of suppliers and a qualitative survey of representatives of yacht management companies and captains.

After analysing the current situation of the sector, both in environmental, industrial and market terms, the panel outlined the progress made in recent years as well as the way forward to achieve a more sustainable industry.

The debate set out not only the main areas of focus for the sector but also the key factors driving change as well as some challenges still holding back broader adoption of sustainable solutions and practices. The report also discussed the key role some industry players should play, in particular refit shipyards, to lead transition towards a more sustainable yachting ecosystem.

Finally, the report looks at the new hydrogen-powered foiling catamaran, ‘Chase Zero’, developed by Emirates Team New Zealand (ETNZ), defender of the upcoming America’s Cup. This project aims to demonstrate not just the technical feasibility of hydrogen powered vessels but also their viability for broader commercial use across the maritime industry.

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PANEL OF EXPERTS

Sascha Meinhardt Head of Sales yacht at SKF

Riccardo Repetto Global Segment Manager yachts at ABB Marine

Mattias Skrinning Vice President of Global Customer Support, Propeller & POD at Kongsberg

Philippe Bernard Procurement Director at MB92 Group

Txema Rubio Commercial Director at MB92 Group, Moderator

Richard Strauss Chief Executive Officer at Teakdecking Systems

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Hanna Dąbrowksa Naval Architect & Sustainable Design Specialist at Water Revolution Foundation

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III

METHODOLOGY

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Executive Summary

EXECUTIVE SUMMARY

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The yachting industry is currently undergoing profound changes, as rising awareness of the need to become truly sustainable gradually gets translated into concrete initiatives.

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Many industry players also acknowledge they face similar difficulties. The survey of MB92 suppliers showed that nearly half of respondents consider the data available to support sustainable development in their field of expertise either insufficient or non-existent. Several participants of the panel Research conducted in December 2022 by MB92 for this debate organised by MB92 also flagged this issue as a vital one. report, within its network of suppliers, shows that four in five companies surveyed already have a sustainability plan in The limited progress made by the supply chains of place. Moreover, close to 40% of respondents also indicated some equipment makers is also a challenge. According they even have a dedicated person or committee to monitor to the survey of MB92 suppliers, the main hurdle restraining implementation. the implementation of an active sustainability plan is the lack of green alternatives. This highlights the need for additional The efforts undertaken by these companies appear to be R&D efforts throughout the supply chain. broad-based, encompassing many aspects of their business operations, in order to reduce any negative impact. For Steel production is a good illustration, as it remains heavily example, almost seven out of ten suppliers surveyed carbon intensive. In the EU, for example, around 60% of indicated they already re-use or recondition some of their steel is made via the energy-intensive blast furnace process, input products. Also, three out of four said they prioritised while only 40% comes from recycled steel scrap in electric local suppliers to reduce their logistical carbon footprint. arc furnaces. Achieving significant emissions reduction will require a profound overhaul.

However, while these efforts may be important, they do not make up for the relatively slow progress Meanwhile, only 15% of respondents to the MB92 survey made so far regarding the sustainability profile of said they see cost considerations as holding back the yachts themselves. There are multiple reasons for adoption of a sustainability plan. This result is consistent this, two critical ones being the relative lack of easy and with the views expressed by several captains consulted by straightforward solutions for yacht owners and the lack of MB92 for this report who indicated that, given the recreative regulatory incentives. nature of yachts and the wealth of yacht owners, financial constraints were typically not centre stage.

Yet the situation appears to be changing. Regulation, which has historically been the most powerful driver of change, Ultimately, the journey towards a more sustainable by far, is increasingly being accompanied by intense public yachting ecosystem will be a long one. But at least the scrutiny of the industry with an increasing number of protests course it set. The rising number of panel discussions around from environmental Groups. these issues can already be considered a step forward. Another positive sign is that many respondents to the MB92 survey of In this context, the industry needs to intensify its efforts suppliers showed strong interest for a broader assessment to raise awareness regarding the sustainability challenge of their impact, with regards to Environmental, Social and among all stakeholders. This encompasses not only shipyards Governance (ESG) criteria. and suppliers, but also yacht owners, crews, management companies, regulators, and local authorities, for example. In fact, almost 40% of firms said they have a mechanism Turning yachting into a sustainable practice will require in place to assess their direct impact, although just 14% of broader involvement from all parts of the ecosystem. companies said they have such a mechanism in place to assess their own suppliers’ impact. Even those currently not One of the main obstacles holding back wider monitoring their impact show substantial interest in going sustainability adoption is the lack of reliable data to the extra mile, as most of them said they would be interested assess the sustainability credentials of alternative in assessing both their own and their suppliers’ impact. products and solutions offered. Prescribers often find themselves ill-equipped to convince decision makers. Several captains surveyed by MB92 highlighted the uphill battle they face to enhance the sustainability profile of their yachts.

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METHODOLOGY

EXECUTIVE SUMMARY

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An industry already on the move

AN INDUSTRY ALREADY ON THE MOVE

One area where companies may need to improve their sustainability credentials in the short term is certifications.

A large majority of respondents indicated they lack any type of certification on aspects as critical as energy efficiency, operational best practice, or emissions. Waste management is the area where they concentrate their efforts the most, with roughly half of the companies surveyed saying they were certified.

CHALLENGES: MORE TECHNICAL THAN FINANCIAL

Over the past few years, the yachting industry has not only realised the vital need to become more sustainable, but it has also taken steps forward. According to a survey carried out by MB92 among its network of suppliers, four in five companies indicated they already have an active sustainability plan in place, with over a third indicating that they even have a dedicated person or committee to monitor implementation.

For all their efforts and commitment to sustainability, companies still face considerable challenges. The main hurdle holding back the implementation of an active sustainability plan raised by companies is the lack of green alternatives. This highlights the need for additional R&D efforts throughout the supply chain. Many suppliers also say they lack incentives to move to greener alternatives, underscoring the need for additional collective pressure to make the entire yachting ecosystem more sustainable.

Initiatives taken by companies do not focus on just one specific area in the spotlight. Instead, they tend to be wideranging, covering aspects as diverse as the use of recycled base materials, or a systemic preference for local sourcing.

For instance, 69% of companies surveyed indicated they already re-use or recondition some of their input products, while 74% said they prioritised local suppliers to reduce their logistical carbon footprint.

Many firms feel they are flying blind. The survey showed there is a lack of reliable data, making it harder to assess the situation and take action. Almost 45% of respondents consider the data available to support sustainable development in their field of expertise either insufficient or non-existent. Several participants in the panel debate discussed in the following section of this report also flagged this issue as a critical one.

HOW WOULD YOU RATE THE LEVEL OF DATA AVAILABLE TO SUPPORT SUSTAINABLE DEVELOPMENT IN YOUR FIELD OF EXPERTISE? 2%

2%

19%

42%

Insufficient

Suficient

Good

Non existent

Excellent

35%

DO YOU HAVE A MECHANISM IN PLACE TO ASSESS… 100 75

11%

0

100

11% 14%

50

75%

19%

63%

62%

13%

19%

... your direct impact?

... your suppliers’ impact?

25

50%

... your direct impact?

24%

75

39%

50 25

IF NOT, WOULD YOU BE INTERESTED IN ASSESSING…

0

... your suppliers’ impact?

Yes

No

N/A

Source: Survey carried out between 2 and 20 December 2022, with 104 respondents from a network of approximately 200 suppliers.

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DOES YOUR BUSINESS HAVE AN ACTIVE SUSTAINABILITY PLAN IN PLACE? IF NOT, WHY? 100%

100%

90%

90%

82%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

18%

20%

10%

0%

0% No

23%

24%

20%

10% Yes

38%

Lack of alternatives

15%

Lack of incentives

Too expensive

Other

63%

Yes

No

37%

100%

100% 90% 80% 70%

Use of recycled base materials

Yes

Purchase of products with environmental certification No

N/A

Prioritisation of local suppliers to reduce logistical carbon footprint

Energy management / efficiency

Waste management

Yes

Operational best practice

No

N/A

33%

51%

36%

0% Re-use or reconditioning of input products

16%

0%

24%

10%

40%

10%

20%

20%

49%

20%

31%

30%

22%

30%

69%

40% 65%

40% 58%

50% 69%

50%

55%

60%

23%

60%

11%

16%

25%

19%

70%

17%

80%

12%

90%

20%

IS YOUR COMPANY CERTIFIED IN ANY OF THE FOLLOWING AREAS?

19%

DO ANY OF THE FOLLOWING ACTIONS FORM PART OF YOUR BUSINESS ACTIVITY?

Emissions

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DOES YOUR COMPANY HAVE A PERSON, OR COMMITTEE, EXPLICITLY TASKED WITH SUSTAINABILITY?

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INTRODUCTION

METHODOLOGY

EXECUTIVE SUMMARY

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V

A joint effort across the ecosystem

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The yachting industry is no longer a stranger to sustainability. Although the sector remains clearly unsustainable, with many yacht owners still expecting a stronger sense of direction on these issues, undeniable signs of gradual change have also started to appear.

For one, awareness regarding the challenges posed by the need for the industry to become truly sustainable has risen considerably among the entire supply chain.

A recent survey carried out by MB92 indicates most of its suppliers already have a sustainability plan in place. Moreover, almost 40% of respondents indicated they had a mechanism in place to assess their own direct impact, and 14% had one in place to measure their suppliers’ impact. (See dedicated section on page 10 of this report).

We’ve seen a very strong push from the industry towards more sustainable practices over the past few years - Philippe Bernard -

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“We’ve seen a very strong push from the industry towards more sustainable practices over the past few years,” says Philippe Bernard, MB92 Group Procurement Director “Our refit shipyards, for example, have taken numerous steps to reduce their impact on the environment,” he adds while also underscoring progress made by many other players in the sector. “This is the only way forward for the industry.”

His remarks underscore the need for the industry to intensify their efforts to raise awareness regarding the sustainability challenge among all stakeholders. This encompasses not only shipyards and suppliers, but also yacht owners, crews, management companies, regulators, and local authorities, for example. Turning yachting into a sustainable practice will require broader involvement from all parts of the ecosystem.

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operations. And while some captains and crews show genuine interest in making yachts’ daily operations more sustainable, they remain bound by relatively small room for manoeuvre.

Several captains surveyed by MB92 highlighted the uphill battle they faced when discussing spending to enhance the sustainability profile of their ships. Capital expenditures typically need to be approved by multiple layers of decision makers and often get challenged during annual operational plan revisions. In practice, such expenditures are often unlikely to be approved unless mandatory.

“One of the main challenges the industry faces, both for refit and new build yachts, is having the tools to monitor how boats are actually performing in real life,” says Riccardo Repetto, Global Segment Manager and yacht sales specialist at ABB. This is important because the performance of a ship, both from a sustainability and a financial perspective, will greatly depend on the way it is operated. “As soon as crews and owners are able to measure their impact, they will realise just how much money they can save, and reductions in fuel costs are firmly linked with reductions in carbon emissions.”

“Educating our customers certainly is one of the most important tasks we have going forward,” says Richard Strauss, Chief Executive Officer at Teakdecking Systems. Since 2019, his company has been making significant efforts to engage and inform clients on how to use and maintain their products, mainly through articles and blogs. “We’re in the decking business of course,” Strauss says, “but part of our mission is also to extend the life of decks through proper care.”

Besides education, yacht owners and crews also need to be able to monitor the operational performance of their boats at sea, in terms of sustainability. Until now, relatively little attention has been paid to the precise impact of daily

One of the main challenges the industry faces, both for refit and new build yachts, is having the tools to monitor how boats are actually performing in real life - Riccardo Repetto -

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However, while these efforts may be important, they do not make up for the relatively slow progress made so far regarding the sustainability profile of yachts themselves.

There are multiple reasons for this, two of them being the relative lack of easy and straightforward solutions for yacht owners and the lack of regulatory incentives. “We are yet to witness significant investments from owners to make their boats really sustainable,” Bernard says, expressing a view widely shared among panel participants.

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INTRODUCTION

METHODOLOGY

EXECUTIVE SUMMARY

We know there is a tendency to install more power than needed on board

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- Hanna Dabrowksa -

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NOT JUST ABOUT PROPULSION The yachting ecosystem is a complex one. On the providers’ side, shipyards typically must manage the work of dozens of suppliers from sectors as diverse as propulsion, carpentry, painting, or electronics. On the customers’ side, these shipyards usually need to coordinate with management companies, captains and crews, and ultimately yacht owners. This means there are numerous areas of focus for sustainability improvements.

Among these key areas for the industry, propulsion is probably the one that has attracted the most attention from stakeholders.

Indeed, a large part of the CO2 a yacht emits comes from the fossil fuel burnt for propulsion. Although the road to net zero emissions still remains a long one, important efforts have been made to switch to lower carbon footprint fuels than traditional marine diesel oil (MDO), like liquified nitrogen gas (LNG).

Technological advances are being made in this field to reduce the impact of propulsion – in particular through increased electrification and the advent of alternative fuels, such as methanol and hydrogen – and commercial prospects are promising. For instance, the global electric boat market – which essentially consists of vessels used for recreational purposes and ferrying a small number of passengers – is expected to grow by close to 13% per annum from 2022 to 2031.1 However, improvements on the propulsion front should not eclipse the fact that yachts spend a very significant part of their time berthed, on “hotel load”. Research by the Water Revolution Foundation (WRF) shows that approximately half of the fuel consumed by a yacht is used for actual propulsion, whether on cruise mode or during manoeuvres. The rest is used to power the yacht’s equipment while at speed and anchored.

The upshot is that while the propulsion mode may be a critical issue, it is not the only factor to consider. Questions concerning the capacity really needed by yachts regarding their electrical systems, such as heating, ventilation, and air conditioning (HVAC), to avoid overpowering them, are just as important. “We know there is a tendency to install more power than needed on board,” says Hanna Dąbrowska, Naval Architect and Sustainable Design Specialist at the WRF. “This is why we are working on a solution to help yacht owners optimise ‘hotel load’ determination.”

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Some improvements have taken place in recent years with, for example, a strong increase in the number of waste collection and sorting initiatives being implemented. In 2021, the International Maritime Organization actually adopted a strategy aiming for zero plastic waste discharges to sea from ships by 2025.3

PUBLIC SCRUTINY, A KEY DRIVER OF CHANGE Regulation has historically been the most powerful driver of change. But the situation appears to be gradually changing, as public scrutiny around the industry intensifies. “Among the multiple requests for quotes we received over the past few months, three of them changed from Burmese teak to green teak,” says Strauss of Teakdecking Systems. “That change came at the owner’s level.”

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Public scrutiny is being exacerbated by the protests that have affected several recent industry events. In November 2022, for example, the Extinction Rebellion group disrupted discussions held during the 30th edition of the Superyacht Forum in Amsterdam. Ultimately, protesters were invited on stage by organisers of the event to deliver their message regarding the unsustainable nature of yachting and expose their gloomy views on the future of the industry.

Over the past few years, yacht owners as well as charterers have found themselves increasingly in the public eye.

“Twenty years ago, if you showed someone a superyacht, they would probably show amazement because of its size and amenities,” says Bernard of MB92. “Today, if you show a superyacht to someone in their twenties, they will say: all this pollution only for one person? How is this possible?”

According to Bernard, public perception is really changing, and this negative perception could grow if the industry does not act.

In this context, the industry should increase efforts to share information and educate clients regarding the more sustainable solutions already available on the market, as well as existing best practices, are seen by all panel participants as vital drivers of further adoption of sustainability. “Improving the sustainability profile of yachts is all about alternatives,” says Sascha Meinhardt, Head of Sales Yacht at SKF Group.

1. ResearchAndMarkets.com, 18 November 2022, “Insights on the Electric Boat Global Market to 2031- Increasing Demand for Luxury Vehicles With Greater Cabin Comfort is Driving Growth”, press release.

2. United Nations Environment Programme, 2021, “Drowning in Plastics – Marine Litter and Plastic Waste Vital Graphics”.

3. International Maritime Organization, 26 November 2021, “Strategy to address marine plastic litter from ships”.

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Waste – in particular, plastics – management is also perceived by panel participants as an important issue for the industry.

While the yachting ecosystem only accounts for a fraction of plastic waste found in oceans – with the vast majority of waste coming from land-based activities, or fishing and aquaculture2 – it could play an instrumental role in changing behaviour across the broader maritime industry.

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EXECUTIVE SUMMARY

The energy crisis triggered by the war in Ukraine, and the subsequent sharp rise in fuel prices, may have caused some temporary changes in the way yachts are being operated.

However, this is not necessarily seen as a long-term tailwind.

“Yacht owners tend to be relatively unaffected by financial constraints,” says Mattias Skrinning, Vice President of Global Customer Support, Propeller & POD at Kongsberg. “So, changes in the fuel price are not really relevant here.”

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Given energy markets’ ups and downs, trusting the financial factor to trigger longstanding change is generally seen as a somewhat risky approach. “Our approach is to do everything we can to reduce consumption whatever the price of fuel may be,” says Dąbrowska of WRF. “I do not take a view on what energy markets will do, nor on the best way to reduce your bill, but I can advise on how to reduce consumption and impact.”

Shifts in other sectors, in particular the automotive industry, where electric vehicles are becoming commonplace, are also fostering change. “A few years ago, few people in the shipping and shipbuilding sector knew about electric and hybrid solutions,” says Repetto of ABB. “When you discussed electric propulsion with yacht owners and crews, they would feel uncomfortable. But in recent years we have seen a great change in attitudes partly because the automotive sector has helped in democratising electric propulsion, it has become a major factor to consider.”

THE INDUSTRY NEEDS RELIABLE DATA Among the main hurdles for broader sustainability adoption raised by suppliers is the lack of reliable data to assess the sustainability credentials of products and solutions offered.

After some failures, in areas such as coatings, clients still tend to consider many of the so-called more sustainable products and solutions coming to the market with suspicion.

Captains and prescribers often find themselves ill-equipped to convince decision makers.

“We need reliable data to demonstrate improvements in terms of sustainability,” says Repetto from ABB. “Unfortunately, it is not always easy to gather all the information that is necessary for that.” For instance, different factories of the same supplier may have very different production processes, which complicates analysis.

“Methodologies are not really standardised. We know that we are improving, but we need fair and reliable models to measure it,” Repetto adds.

Meanwhile, putting an excessively positive spin on the industry’s efforts to go green without sufficient backing could also backfire, given the yachting industry’s unsustainable nature and the increase in public scrutiny. “If you want to lead the way in terms of sustainability, you necessarily have to talk about it,” says Meinhardt from SKF. “It’s easy to say: we want to be net zero by 2030. But can you back this pledge with anything concrete? So, in the end, I would say it’s all about transparency.”

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The relative lack of progress made by the supply chains of some equipment makers can also be challenging. Steel production is a good illustration, as it remains heavily carbon intensive. In EU, for example, around 60% of steel is made via the energy-intensive blast furnace process, while only 40% comes from recycled steel scrap in electric arc furnaces4. Moreover, although EU producers are among the most efficient in the world, there is little scope to reduce the carbon intensity of current processes.

Achieving significant emissions reduction in some areas will therefore require a profound overhaul. “One of the most important hurdles we face to become genuinely green has to do with the raw materials we use to produce our equipment,” says Skrinning of Kongsberg. “The production of key inputs, such as steel and copper, is energy-intensive, and the supply chain in these areas remains both relatively immature and underinvested with regards to sustainability.”

One way suppliers are starting to address this specific issue is to systemically collect – or even buy back, in some cases – used equipment and recycle the materials they are made of to manufacture new products. By systematising this type of ‘circular’ initiatives, equipment manufacturers are able to reduce inputs of new materials by replacing them with used ones of which they typically know the quality and composition.

The geographical deployment of innovative technologies and alternative solutions may also represent an additional challenge. For instance, hydrogen will likely become quickly available in major ports. But will that be the case for more remote places, where yachts are more likely to cruise?

Repetto of ABB points out that the availability of energy sources in remote areas, where yachts tend to go, is an aspect that needs to be taken into consideration.

There may also be some technological dilemmas regarding the way to improve the sustainability profile of a yacht.

Common wisdom has it that an electrification of a boat’s propulsion system is always the best possible solution. Yet “batteries are not always the answer,” says Dąbrowska of the WRF. “You need to take into account the operational profile of the boat and the entire lifecycle of different pieces of equipment.”

Also, the size of the yacht may entail unexpected constraints.

Paradoxically, improvements can sometimes be more difficult to implement with smaller yachts. “It is more difficult to electrify smaller yachts than bigger ones and there is no linear function between kilowatts and volume and weight” warns Repetto of ABB. “If you want to electrify entirely a small boat you will most likely need to compromise on luxury, space and speed, something most owners of smaller yachts typically try to avoid.”

4 Somers, J., 2022, “Technologies to decarbonise the EU steel industry”, Publications Office of the European Union.

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One of the most important hurdles we face to become genuinely green has to do with the raw materials we use to produce our equipment - Mattias Skrinning -

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EXECUTIVE SUMMARY

AN INDUSTRY ALREADY ON THE MOVE

FORGING SUSTAINABILITY LEADERS Making yachting more sustainable is a shared responsibility among all members of the industry, however waiting for everyone to move at once is not an option given the complexity of supply chains and decision-making processes and the rapid pace of change needed. The industry will therefore probably see sustainability leaders emerge that will spur the entire ecosystem.

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“I think the responsibility is on us, as suppliers, to provide options and to educate on those options; tell the pros, the cons and the drawbacks,” says Strauss from Teakdecking Systems. “And, ultimately, it’s going to be up to customers to choose, based on this information.”

Refit shipyards have a key role to play in this transition, due to their position at the centre of the industry. By offering all the tools and equipment available in the market that may help improve the sustainability profile of a yacht – for example, adjusting the use of stabilizers to actual weather conditions, or making maintenance processes more agile and less time consuming – they can make a substantial difference.

Refitters can play a critical role in the collection of user feedback and experience sharing once new solutions are

The responsibility is on us, as suppliers, to provide options and educate on those options - Richard Strauss -

implemented. “Refit shipyards are by nature an indispensable piece of the circular economy puzzle,” says Dąbrowska of WRF. “My dream project would be to work on a so-called virtual yacht refit process, which would feature all the bestin-class sustainable alternative solutions, and showcase the efforts made by the industry.”

“We see the sustainability drive as a great opportunity for us,” says Bernard of MB92. “For that, we need to understand every potential improvement. We need to be able to offer a catalogue of solutions, and to be able to recommend the right solution for the right boat,” he adds. “This is really where, as a refit shipyard, we can bring something to the table together with our network of suppliers.”

Captains and crews should also play a leading role in the transition. Being in charge of a yacht’s daily operations, they are well aware of the challenges faced by the industry and could easily advocate for greater sustainability in their conversations with management companies and yacht owners. “We need feedback from the market to better understand user expectations, and involving the crews is essential for this,” says Meinhardt from SKF.

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Source: World Yacht Group

- Sascha Meinhardt -

IN FOR THE LONG HAUL The journey towards a more sustainable yachting ecosystem will be a long one. But at least the course it set. The rising number of panel discussions around sustainability issues should already be considered a step forward. “The fact that yacht owners are now strongly encouraged to think about the impact of their leisure asset is already an excellent thing,” says Repetto of ABB. “When industries get challenged, industries find new solutions.”

What’s more, the yachting industry’s long history as an innovation pioneer also bodes well for the future. “New products often tend to be installed first in yachts before they eventually become commonplace across the broader shipping industry,” says Meinhardt. “The yachting industry is often the one willing to be the early adopter and to drive change. Things are certainly not perfect, but for me, this is really encouraging.” This is a real opportunity to influence the rest of the maritime industry.

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We need feedback from the market to better understand user expectations, and involving the crews is essential for this

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VI

Interview: Nick Burridge

Chase Zero Operations Coordinator,

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Emirates Team New Zealand

Having these chase boats operating on a daily basis during the next America’s Cup will show the world that this technology really works

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“WE WANT HYDROGEN-POWERED BOATS TO BECOME MAINSTREAM” As the yachting ecosystem embarks on its journey to a more sustainable future, some industry pioneers are showing the way.

A case in point: Emirates Team New Zealand (ETNZ), defender of the upcoming America’s Cup, and their brand-new hydrogen powered foiling catamaran ‘Chase Zero’.

Race yachts competing for the America’s Cup have evolved considerably over the past decades, with numerous technological breakthroughs, including the advent of foiling.

However, the technology used to propel support vessels had until recently remained relatively traditional. Conventional chase boats burn large quantities of fossil fuels to sustain the intense effort required while the yachts are sailing.

Chase boats play a vital role, where they follow race yachts carrying the equipment and engineers needed to monitor performance and support crews while sailing. “We saw this as an opportunity and almost as a responsibility to really try and develop new technology for those chase boats, to make them more sustainable,” says Chase Zero Operations Coordinator Nick Burridge.

The 37th America’s Cup will take place between August and October 2024 in Barcelona, Spain, where MB92 Group is headquartered. The 172-year-old regatta is one of the world’s most important sporting events, with a global TV and streaming audience of 941 million for the previous edition1 and numerous superyachts cruising around the area for the event with their owners on board.

It frequently serves as a showcase for new technologies that can be applied across the maritime industry. Under ETNZ’s leadership, the upcoming edition will require every team participating to use at least one hydrogen-powered support boat.

Getting this technology off the ground was no small feat. The team only had nine to ten months to complete a project initially estimated by some outsiders to take four years to carry out.

“Because the technology involved is still relatively new, very early in this project, we outgrew the information our partners and

LOOKING BEYOND TRADITIONAL SUPPLIERS Extremely tight deadlines added to already stretched supply chains. Many of the components needed to design and build the prototype, such as fuel cells, composite hydrogen tanks, and electronics, typically have extremely long lead times. These were exacerbated by supply chain bottlenecks that clogged many industries in the aftermath of the Covid-19 pandemic, especially in the electrical and electronics sectors.

“We are always thinking outside the box and had to do so even more so beyond our traditional circle of partners and suppliers, in order to be able to source the necessary components within the required time frame,” Burridge says.

Carmaker Toyota quickly provided preproduction fuel cells, which helped save considerable time. Some other components, particularly batteries, also proved hard to source. To save time, the team started designing the boat without knowing all the specifics, and later went back to the battery bay once they knew the geometry of the batteries they would be able to use.

Hydrogen has attracted considerable attention from the maritime industry, seen as one of the leading technologies to decarbonise the sector. Of the over 200 zero emission projects analysed in a recent report by Global Maritime Forum – a trade organisation representing the maritime industry and the World Economic Forum2, about 45 focus on hydrogen technologies, representing the largest group.

So far, most initiatives remain in the very early stages. By 2030, hydrogen is expected to account for just over 1.1%3 of international shipping’s energy consumption, according to the Net Zero Scenario developed by the International Energy Agency. These still nascent medium-term prospects underscore the decisive role that concrete breakthroughs, like the ‘Chase Zero’ project, must play to foster broader adoption across the industry.

“Having these chase boats operating on a daily basis during the next America’s Cup will show the world that this technology really works,” says Burridge. “We want hydrogen-powered boats to become mainstream.”

1 37th America’s Cup, 19 November 2021, “America’s Cup Broadcast wins ‘Most successful event broadcast”, press release.

2 Global Maritime Forum and the World Economic Forum, March 2022, “Mapping of Zero Emission Pilots and Demonstration Projects”, Third edition.

3 IEA, September 2022, “International Shipping”, Tracking report.

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This state-of-the-art hydrogen-powered chase boat can reach 50 knots (or 0ver 90 km/h), and travel almost 180 nautical miles (330 km) at a cruising speed of 28-30 knots (or 55 km/h), with the only emissions of its operations being pure water. The project aims to demonstrate not just the technical feasibility of hydrogen powered vessels but also their viability for broader commercial use across the maritime industry.

consultants were providing us,” Burridge says. “No one else, at this point, has really designed and built a hydrogen-powered foiling boat with this range and speed.”

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The industry in numbers A FAST-GROWING SECTOR

SUPERYACHT FLEET GROWTH FORECAST (OVER 30 METRES) 8,000 7,500+ 6,270 6,000 4,300 4,000 2,200 1,400

2,000

2001

1991

2011

2021

2031

Source: The Superyacht Group

SUPERYACHT DELIVERY HISTORY AND FORECASTED GROWTH SEGMENTED BY LOA/m

166

167

164

153

161

151

156

153

146

144

161

143

166

+90m

166

60-90m

168

40-60m

166

30-40m

164

‘25

174

‘20

165

‘15

189

‘10

179

‘05

166

262

245

229

202

100

137

150

118

200

181

179

250

232

Forecasted scenarios

300

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Data compiled by The Superyacht Group, a publisher focused on the superyacht market, estimates that the total fleet of yachts over 30 metres in length will continue to grow significantly over the foreseeable future to 7,500 ships in 2031, compared to 6,270 at the end of 2021. Secondly, after 20 years of steady industry growth, the maintenance and refitting needs of the fleet are rising, with demand to both modernise and reduce the environmental footprint.

50 0

2000

Source: The Superyacht Group

“30 2031

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THE INDUSTRY IN NUMBERS

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EVOLUTION OF AVERAGE GROSS TON OF SUPERYACHTS SINCE 1992 800 700 600 500 400 300 200 100 0 1992

1994

1996

1998

2000

2006

2008

2010

2012

2014

2016

2018

2020

Source: SuperYacht Times

2%

6%

63%

29%

90m+

60-90m

40-60m

30-40m

Source: The Superyacht Group

REFIT YARD VISITS (YACHTS OVER 40 METRES), 2017-2021 1,000 900 800 700

834

500

200

644

300

512

400

935

600

100 0

1991

Source: SuperYacht Times

2001

2011

2021

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SUPERYACHT FLEET SIZE SEGMENTATION UP TO AND INCLUDING 2022

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MB92 in numbers

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THE WORLD’S LARGEST REFITTING GROUP MB92 Group is the largest superyacht refitter in the world. At its facilities in Barcelona and La Ciotat, 350 employees and more than 1,750 indirect employees focus exclusively on maintaining and refitting boats. This makes the firm a key part of the industrial fabric in Barcelona and La Ciotat, given its constant need to hire highly skilled specialists for projects. The shipyards have also invested heavily in infrastructure to be able to handle the largest ships in the industry. A shiplift in Barcelona, with a capacity of 4,800 tonnes, is the largest of its kind in the world, and another in La Ciotat, with capacity to lift up to 4,300 tonnes, started operations in Autumn 2022.

KEY FIGURES 2022

200+ Projects per year

350 Direct employees

92%

67%

Recovery ratio for dangerous waste

Recovery ratio for non-dangerous waste

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Projects >100m LOA

1,750 Indirect employees

245,750 kWh generated by on-site solar panels during 2022

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THE COMBINATION OF MB92 BARCELONA AND MB92 LA CIOTAT PROVIDES VIRTUALLY LIMITLESS DOCKING SOLUTIONS:

600t crane 300t travel lift 150t travel lift

4 shiplifts 4,800t: 9 slots 4,300t: 6 slots 2,000t: 4 slots 2,000t: 4 slots

2 dry docks 220 metres 350 metres

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3 travel lifts/ high capacity crane

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Conclusions

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Txema Rubio / MB92 Group Commercial Director

AN INDUSTRY ALREADY ON THE MOVE

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WHY WE NEED TO TAKE A PROACTIVE APPROACH By now, there is no doubt that the sustainability challenge is upon us and that it represents an existential threat for the yachting industry. But the silver lining is that this ordeal may also be turned into a lifetime opportunity to transform yachting and make it a truly sustainable practice. Our ability to eventually achieve that will essentially depend on our efforts to take the lead and anticipate this change.

Indeed, simply waiting for the 6000-strong superyacht fleet to come knocking at our doors for an upgrade – which will inevitably happen when regulation or public pressure become too constraining – would only lead to additional stress, bottlenecks, and disruption across the sector. Therefore, we – as an industry – need to take a proactive approach.

Getting clients onboard will necessarily be about convincing them that the transition is both inevitable and a good thing, and that we need their help. But it will also be about making the transition as easy and smooth as possible for them. As mentioned earlier in this report, few owners really want to be early adopters. Sustainability cannot come at the expense of performance or comfort.

For the supply chain, a successful transition will require long-term commitment and coordination, as every link of the chain strongly depends on its neighbours. For that, regulators and technology developers will need to provide a path of converging standards. Getting everyone on the same page is clearly the biggest challenge.

SUPPORTING OUR STAKEHOLDERS IN THE TRANSITION We also believe that a significant proportion of our efforts should now focus on supporting all our stakeholders achieve their own transition. This is why, at MB92, we have been working hard on building up additional in-house advisory capabilities, to guide clients and suppliers on their journey towards sustainable yachting.

Doing so, we do not necessarily aim to change things radically overnight. Instead, we want to assist decision makers with a broad range of options for potential improvement of their assets, from quick efficiency wins to state-of-the-art integrated sustainable products and solutions. Our idea is to enable them to travel the sustainability route at their own pace.

Because, while ambitious long-term goals should not be overlooked, we believe getting the largest number of yachts started with the transition should be one of our highest priorities at this point in time. For that, we want to help all the parties involved, including management companies and crews, have the necessary conversations with yacht owners, in order to take better-informed decisions.

AS A REFIT SHIPYARD, MB92 IS CONSCIOUS OF THE RESPONSIBILITY WE HAVE IN DRIVING THE TRANSITION

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In particular, we need to intensify our efforts to raise awareness both among clients and throughout the entire supply chain.

Creating consensus around the urgent need to move towards not only more sustainable products and services, but also more sustainable uses and practices, will be a critical success factor. Everyone should take part in the transition.

As a refit shipyard, MB92 is conscious of the responsibility we have in driving the transition. We have long been leading by example, investing heavily in our own installations to reduce their environmental footprint and improve further social impact and governance. But we remain conscious that the most difficult part of the transition still lies ahead.

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THANKS TO Phillippe Bernard – Procurement Director at MB92 Group | Nick Burridge – Chase Zero Operations Coordinator at Emirates Team New Zealand | Hanna Dąbrowska - Naval Architect & Sustainable Design Specialist at Water Revolution Foundation | Hamish Hooper – Communications at Emirates Team New Zealand | Sascha Meinhardt – Head of Sales yacht at SKF | Riccardo Repetto - Global Segment Manager yachts at ABB Marine | Richard Strauss – Chief Executive Officer at Teakdecking Systems | Mattias Skrinning - Vice President of global customer support, propeller & POD at Kongsberg | Our global network of suppliers | All the Captains and Management Company representatives who participated in the preliminary research for this report.

info-barcelona@mb92.com info-laciotat@mb92.com mb92.com

MB92 Group Headquarters Passeig Joan de Borbó, 92 08039 Barcelona, Spain +34 932 24 02 24

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