Tag Archives: European union

EU Shore Power Regulations Fall Short of Potential

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MSC Virtuosa connected to the Shoreside Power System  photo credit Spacejunkie2 (flickr)

The European Union (EU) is in a race to decarbonize the commercial shipping industry, and part of the strategy includes a requirement for ships to plug into shore power across the bloc’s ports. In line with the FuelEU Maritime Regulation and the Alternative Fuels Infrastructure Regulation, container and cruise ships over 5,000 GT must connect to shore power in the largest EU ports come January 2030.

The regulations have been hailed as critical measures in decarbonizing maritime transport, which accounts for three to four percent of total CO2 emissions in the EU. However, achieving shore power ambitions will be a herculean task. According to the International Council on Clean Transportation (ICCT), the bloc will only achieve a 24 percent reduction of at-berth CO2 emissions under the current setup.

The NGO contends that to achieve a 100 percent at-berth reduction in CO2 emissions, the forthcoming revision of both regulations should include a requirement for all ships greater than or equal to 400 GT to connect to shore power in EU ports. To achieve this, the EU will require nearly 1,929 MW of additional shore power installation to meet average at-berth annual energy demands, and 3,342MW for peak energy demand.

It also argues that boilers should also be retrofitted, electrified, or connected to shore power facilities, just like auxiliary engines, because they are responsible for 44 percent of all at-berth CO2 emissions. Boilers would require 36 percent of all needed shore power for ships berthing in EU ports.

The paper highlights that increasing the level of ambitions by including at-berth electricity demand for all ship types greater than or equal to 400 GT could reduce CO2 emissions by 42 percent. Adding more ports would help to avoid 58 percent of the total at-berth CO2 emissions.

Currently 51 ports in 15 EU member states are equipped with 340 shore power connectors, and Sweden, the Netherlands and Germany lead the pack. The current shore power network supplies around 309 MW, mostly for container, passenger and cruise ships.

Though cargo ships are the most common docking in EU ports, accounting for 43 to 46 percent, their energy demands are relatively low at 14 percent of the total. In contrast, despite their small absolute number in the fleet, the energy demand of cruise ships stands at 21-28 percent of the total. 

The largest additional shore power installations will be needed in Italy, Spain and France where energy demand cumulatively stands at 3,004 GWh, mainly due to high cruise ship traffic. Cruise ships alone in the three countries would account for 59 to 63 percent of shore power needed. 

How to Scrap a Cruise Ship and What They Go For

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As many as 13 cruise ships were reduced to scrap in 2020 – more than in the five preceding years combined.

The number of cruise vessels removed from the worldwide fleet in 2020 was so high that scrap yards have been struggling to keep up with the demand – especially when the vessels are registered in the European Union and, therefore, have to comply with stricter regulations.

According to Vagelis Chatziginnis, a senior trader at GMS Leadership (one such company that organizes ship scrapping), most of the vessel scrapping in 2020 took place in Turkey.

“We have seen a couple of units being sold for recycling in India already, but a couple of units is nothing compared to the numbers we’ve seen in Turkey so far,” Chatziginnis told Cruise Industry News. “Some of these larger cruise ships (are) being laid up in locations like Greece, for example, until more spaces are available to digest in Turkey.”

Scrap Values

Chatziginnis said the average scrap value in India is $400 per ton. In Turkey, the value is considerably less at $280-300 per ton. At the height of the pandemic, however, those values could be as low as $90 for EU-flagged ships.

“When the pandemic was at its peak – let’s say around summer 2020 – and the first cruise ships started being scrapped, some of them were even getting double digits, like hardly $100 per ton, maybe $90,” he said.

The value can depend on various factors, such as the country where the facilities are located or whether the cruise vessel was registered in an EU country.

“If the vessel has to be recycled in compliance with a regulation of the European Union, you would probably be looking in Turkey for something like $200 per ton equivalent because of their very limited capacity of the yards, which are compliant with European regulations,” Chatziginnis explained.

“In the U.S., you have one facility that is approved in the European Union. So, the vessel could be recycled there, but it’s a totally different market. You would probably be looking at something like $80 per ton, for example,” he added.

However, Chatziginnis said that steel prices globally have increased dramatically over the past few months and residual value has increased by nearly $100 per ton in each of the major ship recycling counties.

Process Organization

A role of a company like GMS is to organize the entire recycling process.

“So, ultimately the ownership and responsibility of the vessel would be transferred to the owning entity that would be buying the vessel. The cruise line has nothing to do anymore with the vessel. And thereafter, we are arranging the transportation from point A to point B,” Chatziginnis said.

“Let’s say you’re taking delivery of a cruise vessel and, let’s say, from Piraeus.

So, from Piraeus in Greece, we put our crew on board, and we arrange for the unit to go to Turkey. We are (then) sending the unit to the recycling facility, and the recycling facility has to pay for purchasing the vessel to recycle in accordance with the standards that we’re going to agree on,” he added.

GMS also vets the requirements of the original owner for regulations that need to be complied with and then guides them with how to proceed with the scraping in the best interests of the cruise industry.

“It sounds like it’s simple, but it isn’t always. Especially when you have to respect other regulations (like the EU ones),” Chatziginnis said.

What Holds

A record-breaking 46 cruise vessels could enter service in 2021: 30 ships that are set to debut and 16 more ships that were delivered in 2020 but have yet to enter revenue service.

With that many ships entering the scene, cruise lines have to be wary not to oversupply the market, said VesselsValue, a maritime data provider.

“A quick and confident return of demand is paramount for the industry to rebound; otherwise, we should expect to see further delays and removals in an attempt to balance things out,” VesselsValue’s cargo analyst, Guy Cooper, told Cruise Industry News.

The other sad consequence of the pandemic is that many relatively young cruise ships are getting scrapped.

“Look at the Marco Polo – it is a 55-year-old vessel … It has been operating for, like, more than 50 years now… And now, all the other major lines are scrapping all the vessels that were built in the 1990s and the 1980s. This is quite young for the normal industry in cruising in our understanding,” said Chatziginnis.

“I doubt that in the last decade, at least, or maybe even more than this, we have seen so many cruise ships being recycled in a year,” he added.

From Warships to Wind Turbines: Spain Shipyard Eyes EU Aid in Pivot to Wind Power

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FILE PHOTO: DJ Mattaar / Shutterstock

Spanish shipbuilder Navantia is stepping up its bet on offshore wind energy, a venture that stands to benefit from the European Union’s fiscal response to the pandemic.

The landmark 750 billion-euro ($890 billion) pandemic-recovery aid will encourage Spain to invest more in clean energy. That could galvanize the company’s recent pivot into sea-based power projects, said Managing Director Javier Herrador del Rio. With demand flagging for its military vessels, Navantia has branched into building the massive foundations for wind turbines that can stretch out of the water as high as a 50-story office building.

The comment underscores how companies across the EU are gearing up to take part in the bloc’s biggest-ever stimulus package. Europe’s leaders have said they want countries to spend a significant portion of the funds on making the regional economy more carbon-neutral. Navantia’s green projects might become a test case for the program.

‘Highly Cyclical’

Spain and Italy are poised to be among the largest recipients of the funds and both countries are hashing out details of how to spend the money. The fiscal jolt is an opportunity for the Spanish administration to start investing in offshore wind farms in the northern Galicia and Basque regions and in southern Andalusia, Herrador del Rio said.

Naval shipbuilding “is highly cyclical and even more so during such volatile times like we’re living through now – when we exit one crisis and then fall into another,” the managing director of Navantia’s Bay of Cadiz Shipyard said in an interview. Rocky economic times limited Spain’s ability to invest in new ships and forced state-owned Navantia into more manufacturing areas. The offshore wind became a strategic priority in 2018, he said.

The firm’s fortunes have ebbed since the 1980s when demand was high for made-in-Europe warships and oil tankers and the company employed about 40,000. While staff has since dropped to about one-tenth of that, it was still able to take on Saudi Arabia’s 2018 order of five corvettes for its navy, one of Navantia’s few major shipbuilding contracts in recent years.

Incipient Industry

While Spain was a global pioneer in solar and wind projects, the offshore wind-park industry is still quite young. Contracts Navantia has signed in the sector don’t generate nearly as much revenue as building submarines and aircraft carriers.

Overall, companies globally are operating about 30 gigawatts of offshore wind energy, said Imogen Brown, an analyst at BloombergNEF, an energy research firm. That’s a fraction of the 611 gigawatts of land-based wind projects, based on data through 2019, she said.

Most of the turbines are in the North Sea, off the coasts of the U.K., the Netherlands, Denmark and Germany. The strong winds and comparatively shallow seabed have allowed major players such as Denmark’s Bladt Industries and the Netherlands’ Sif Group to anchor what is known as “bottom-fixed” turbines to the ocean floor.

Navantia has received commissions for 10 projects since 2014, including orders to manufacture several dozen bottom-fixed turbines for Iberdrola’s 500-megawatt offshore wind farm in Brittany.

The Mediterranean Sea that borders much of Spain has relatively deep waters. That has pushed Navantia and other manufacturers, including Italian shipbuilder Saipem SpA, to shift their focus to floating wind turbines. But the technology is still incipient and there’s not a standardized design, Brown said.

“It’s only demonstration projects that have been commissioned so far,” she said. “We think bottom-fixed wind turbines will still be the driver in the market pre-2030.”

Europe’s increased funding for clean-energy projects will help to bolster investments in technologies to improve floating projects, Herrador del Rio said at the company’s Puerto Real shipyard near the Strait of Gibraltar, the strategic entrance to the Mediterranean from the Atlantic Ocean. That funding will eventually lead to building more wind farms off the Spanish coasts and in the Mediterranean Sea.

“Sooner or later it will become a reality,” he said. “I’m convinced.”