The United Kingdom (Great Britain and Northern Ireland) may not have been a member of the European Union for four years, but the British maritime market may be more interesting than ever. This is mainly due to the many investment projects launched by the British government, especially in recent years, to make shipping and ports more sustainable.
In every issue of SWZ|Maritime, SWZ|Maritime’s editor-in-chief Antoon Oosting writes an opinion piece under the heading “Markets” about the maritime industry or a particular sector within it. In the May 2024 issue, he goes into the British maritime market and its importance for the Dutch maritime sector.
The only condition for sharing in British government support may be to officially open a branch in the UK, which is still fairly easy despite the UK no longer being an EU country. This follows from the “UK market report – Opportunities & developments in the maritime sector”.
This recently released report was written by Els Steger and Maxime Dalida of the Netherlands Business Support Office in Manchester on behalf of the Netherlands Enterprise Agency. It provides a concise overview for SMEs and research institutions of trends, developments and opportunities in the area of making shipping and ports sustainable in the UK maritime sector.
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‘North Sea neighbours’
‘The Netherlands and the United Kingdom are both countries in which the maritime sector has traditionally played a major role. Our highly developed relationship of trade and mutual investment go back many centuries. The so-called “North Sea neighbours both have a strong reputation when it comes to shipbuilding, navigation, maritime technology, ports, logistics and innovation. Building on our shared maritime specialism, we are striving for a green, smart, and sustainable future for this sector. We are pleased to invite you to help us do so,’ write the report’s compilers.
The rapporteurs foresee that most opportunities for cooperation and opportunities for Dutch entrepreneurs to enter the UK market are in the area of sustainability: ‘The high level of government attention in the UK to making the maritime sector more sustainable creates opportunities for sharing infrastructure and knowledge, among other things.’
Creating smart ports
Solutions to improve sustainability and digitalisation will create opportunities for Dutch entrepreneurs. ‘The British government wants to grow and strengthen the maritime sector, including through investments for economies of scale. Partly due to the emergence of “smart ports”, the demand for products and services for digitalisation and automation is increasing, in addition to sustainable solutions,’ write the compilers of the report.
According to the report, there is a successful and established shipping industry in the UK. The industry contributes £ 10 billion (€ 11.6 billion) to the gross domestic product, provides 240,000 jobs and pays £ 2.5 billion in taxes in the UK. This does make the British sector a bit smaller than the Dutch. In the Netherlands, the direct added value of the combined port and maritime cluster was a whopping € 50.4 billion in 2022. The combined direct employment in the port and maritime cluster in 2022 (measured in employees) accounted for 303,960 jobs in the Netherlands.
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Demise of shipbuilding
That significant difference is due in part to the almost complete demise of the UK’s still sizeable shipbuilding industry just after the war, especially in the 1950s and 1960s. The fact that the Netherlands did manage to keep a respectable shipbuilding industry afloat provides the Dutch, with their shipyards and extensive maritime supply industry, with opportunities to participate in the sustainability of British shipping.
Because if there is one thing that has always remained very important in the UK, it is the shipping industry that keeps the archipelago accessible for the extensive import trade. British exports are considerably smaller. The researchers note that the UK shipping industry still emits too many greenhouse gases and pollutants. UK short sea shipping contributed roughly 5% of the UK’s total domestic greenhouse gas emissions in 2020. ‘That is more than those from all buses and trains in the country combined,’ according to the researchers.
Work to be done
So in that regard, there is plenty of work to be done. ‘Products and services that provide a solution for making this sector more sustainable and developing it further bring opportunities both for further cooperation between our countries, and for entering the British market,’ state the researchers.
After pursuing an absolute laissez-faire policy since the coming to power of British Conservative “Iron Lady” Margaret Thatcher, British politics and government started getting involved in the maritime sector again in 2019 with the release of the Maritime 2050 Strategy. In it, the government sets out how best to respond to future challenges and opportunities. In this policy document, the government makes concrete recommendations for the short, medium and long term within various themes such as technology, infrastructure and environment.
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Clean Maritime Plan
This strategy has since led to the formation of organisations, collaborative initiatives and funding opportunities discussed in the report. In turn, the Maritime 2050 Strategy has led to a series of plans such as the Clean Maritime Plan, which describes exactly how the route to achieving the goals around zero-emission shipping should sell.
At the United Nations annual climate summit in Glasgow in November 2021, the Clydebank Declaration was launched in which 24 countries, including the Netherlands, pledged to develop zero-emission maritime links between countries. These so-called “green shipping routes” are to become sea routes that are emission-free from start to finish, including landside infrastructure and the ships that use them.
An update to the National Shipbuilding Strategy launched in 2017 followed in March 2022, which initially focused on naval shipbuilding. With the update, the UK encourages civilian shipbuilding in the UK as well.
Green shipping routes
At the UN climate conference COP27 in November 2022 in Egypt, the Netherlands and the UK followed up on the Clydebank Declaration. Together with Norway and the US, they pledged to create six green corridors. Creating these routes is important for both the Netherlands and the UK to meet the climate goals of the Paris Agreement. Making them a reality will require, among other things, zero-emission fuel, charging points in ports and environmentally friendly ships.
The British government has allocated a maximum of £ 300 million for decarbonising the maritime sector and has set up a new division for this within the Department for Transport, the UK Shipping Office for Reducing Emissions (UK SHORE). UK SHORE is implementing a comprehensive research and development programme in partnership with industry to help build greener ships, from cruise ships to tankers and pleasure craft. The organisation aims to transform the UK into a world leader in the design and production of clean marine technologies. UK SHORE may distribute £ 206 million in grants, which are also available to Dutch companies registered in the UK.
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Great importance
The UK’s many ports are of great importance. The researchers found the UK port industry is the second largest in Europe with more than 500 million tonnes of goods shipped annually and more than 60 million international and domestic passengers. The total value of cargo traffic through British ports is estimated at £ 500 billion a year. 95% of the country’s imports and exports are through its ports, including 48% of its food and 25% of its energy (oil, gas and coal). The UK has over 120 commercial ports, with the largest twenty accounting for 88% of total cargo traffic.
The UK government envisions that UK ports will become part of a digitised and efficient supply chain that is pioneering new business models. Digitalisation and automation are to improve safety and security and reduce labour costs while creating new, highly skilled jobs. In its 2021 budget, the UK government announced investment for a range of maritime initiatives, including the designation of eight Freeports in England, the establishment of a UK Investment Bank and funding for port infrastructure to support the offshore wind energy supply chain.
Netherlands number 1
For the Netherlands, developments in UK ports are very important. With a 13% share of total UK imports, the Netherlands is the UK’s main importing country, ahead of the US (11%), Norway (10%), France (8%) and Belgium (6%). The Netherlands is also the leading country for UK exports with a 21% share far ahead of France (9.2%), Belgium (8.3%), Ireland (8.3%) and Germany (5.5%).
According to the researchers, the opportunities that the British market offers to the Dutch maritime sector are the new economic clusters to be created in British port areas through the implementation of Freeports, taking advantage of the benefits of new digital and automated processes through smart ports, the increased demand for storage locations, improving connectivity through digitisation and blockchain technology and the increased need for cyber security.
Cartoon by Hans de Wilde/SWZ|Maritime.
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