From the magazine – What gets priority is all too often a matter of making tough choices. Because in a divided country like the Netherlands – and this not being much better in the rest of Europe – it is impossible to please everyone. Right now, it seems the importance of maintaining a national shipbuilding industry has finally landed in politics.
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 October 2024 issue, he discusses the renewed appreciation of shipbuilding and its importance for the Netherlands but also Europe. The opinions expressed in this article are those of the author and do not necessarily reflect those of the publisher, the SWZ Foundation, the KNVTS, or other editors.
And so, many people’s hopes of a nice apartment overlooking the southern Amsterdam IJ riverbank with its historic harbour front will remain a dream. At the request of the State, the province of North Holland has drawn a line under the plan of the City of Amsterdam to build 9600 homes at the site of Damen Shiprepair Amsterdam. For now, preservation of the shipyard is deemed more important than housing.
So this is an example of a hard choice where preserving shipbuilding is prioritised as it is of national interest. Or as the substantiation of the provincial decision reads: ‘It is about the importance of this shipyard for our national security (maintaining naval ships), the energy transition (from fossil-powered to sustainable ships and equipping installation vessels for the realisation of offshore energy projects), and circular and raw material transitions (reuse of ships)’ and the ‘capacity to maintain and repair large ships and make them sustainable (conversion), which is crucial for the protection of our vital national interests and strategic autonomy.’
Also read: SMM: Hunt for non-fossil is on, but don’t throw away LNG just yet
Many shipyards gone
With so many shipyards closing over the past decades to make way for mostly residential areas, it is probably the first time a shipyard is kept open. Sites for shipyards are difficult to find because some degree of nuisance for the nearby area can hardly be ruled out. Shipyards are, therefore, without exception, subject to extensive licensing requirements.
Many shipyards have been lost in recent decades because they could not meet strict laws and environmental conditions. Nevertheless, we still have shipbuilding, both civil and naval, in our country, while in many European countries, such as the UK, Belgium, Sweden and Denmark, civil shipbuilding has almost completely disappeared. In formerly important shipbuilding countries like France, Germany and Italy, next to naval ships, shipbuilding has been all but reduced to cruise ships.
But this has to change. Not just Dutch, but European politicians as well now seem to be aware of this. On 9 September, former ECB President and Prime Minister of Italy Mario Draghi presented the report called “The Future of European Competitiveness – A Strategy for Europe’s Competitiveness” to European Commission President Ursula von der Leyen.
Employer interest groups such as our own VNO-NCW and MKBNederland welcome the report, which calls for more cooperation for a competitive European economy. The report insists on the need for substantial investments in innovation, climate energy policy and thus offers important building blocks for restoring EU competitiveness.
Also read: German shipbuilding sector optimistic, but vulnerable
De-industrialisation of Europe
There have long been concerns about the EU’s eroding competitiveness. A fragmented internal market, energy prices that are considerably higher than those of countries outside Europe, exuberant state support for innovation and sustainability outside the EU and a tsunami of European regulations are leading to a de-industrialisation of Europe. And with it, in the long run, the loss of jobs, prosperity and an increasing dependence on other countries – while the world around Europe is becoming increasingly grim.
According to Draghi, three policy areas require additional action: innovation, climate and energy policy, and security. In particular, the EU needs to dramatically increase its innovation capacity in emerging technologies.
Furthermore, Draghi advocates strengthening the European defence industry, and the report stresses the need to make European energy prices more competitive. VNO-NCW and MKB-Nederland welcome a joint European perspective on these important issues that call for policies that go beyond national borders.
Also read: Shipbuilders have to wait (too long) for Rijksrederij orders
Concrete actions requested
The concerns about Europe’s competitiveness are not new, according to VNO-NCW. European industry’s share of the global economy fell from 21 per cent in 2000, to 14.3 per cent in 2020.
‘The recovery of the European economy should be the central theme for Von der Leyen’s new commission. With the Draghi report and Enrico Letta’s report on the internal market already presented, the analyses are ready. Now it is a matter of moving on to concrete actions,’ state VNO-NCW and MKB-Nederland.
On a political level, they also speak on behalf of Netherlands Maritime Technology (NMT), the interest group of shipbuilders and suppliers. On a European level, NMT has its interests represented by SEA Europe, the umbrella organisation of the European shipbuilding industry, with former Damen CEO René Berkvens as chairman.
SEA Europe also fully supports the Draghi report. It correctly identifies the key challenges facing the European maritime technology sector, including unfair competition. Asian shipyards receive large government subsidies, enabling them to offer prices that are thirty to forty per cent lower than those of EU shipyards. These practices diminish Europe’s competitiveness and harm its maritime industrial capacity.
Also read: United Kingdom offers opportunities for maritime sector
Strategic dependence
The second aspect to which SEA Europe calls attention is that of the danger of Europe’s ever-increasing strategic dependence on authoritarian-controlled countries in Asia, and China in particular. Europe’s maritime resilience is at risk as it relies on Asia for 94 per cent of merchant ships and 96 per cent of containers, states SEA Europe.
In this context, Draghi advocates targeted support, such as ‘conditionalities in EU financial instruments or tax incentives for shipowners to buy ships made in the EU’. Such proposals are entirely in line with SEA Europe’s manifesto presented last April, in which it unfolded a plan for building 10,000 sustainable and digitised ships in Europe by 2035.
In its manifesto, SEA Europe also called for the EU to quickly implement a Maritime Industrial Strategy. This request was echoed by the Competitiveness Council in May, where EU member states called on the European Commission ‘to develop a new strategy that supports the European maritime industry, which is vital for the EU’s strategic interests, in the digital and green transition and that encompasses all the dimensions of the sector’s competitiveness’.
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Europe’s autonomy at stake
‘A maritime industrial strategy is not only a must for the maritime industry alone, but also for Europe’s strategic autonomy, defence, resilience and future,’ says Christophe Tytgat, Secretary General of SEA Europe. After years of hard lobbying, the maritime industry is finally being heard in Brussels.
With the installation of a new European Commission, Greece’s portfolio holder for sustainable transport and tourism, Apostolos Tzitzikostas, has been tasked, as proposed by the Draghi report, with developing a new industrial maritime strategy to strengthen the competitiveness, sustainability and resilience of Europe’s maritime manufacturing sector.
An announcement that was warmly welcomed by SEA Europe: ‘This announcement is significant as it recognises the crucial role of Europe’s maritime technology industry in delivering sustainable and digital assets for shipping, the blue economy, and naval defence. This industry is a cornerstone of Europe’s strategic autonomy and economic resilience.’
Also read: Preservation of Dutch merchant shipping requires a maritime authority
Result of years lobbying
NMT is also very happy with this result. ‘Now, it is a matter of giving this strategy our substance as well, and that will be the main topic for SEA Europe in the coming months,’ posted Arnold de Bruijn, team leader sector management from NMT on LinkedIn.
He was joined in this by Sander den Heijer, programme director Sector Agenda Maritime Manufacturing Industry at the Dutch Maritime Network (Nederland Maritiem Land): ‘This is only the beginning. Member states will play a large role in this story and fortunately, we find the Dutch government on our side with the Maritime Manufacturing Sector Agenda tucked under our arm.’
SEA Europe notes that while the announcement was made in the mission letter of the Commissioner designate for Sustainable Transport and Tourism, it should encompass a broader scope, addressing maritime manufacturing, shipbuilding capacity, and technological leadership as fundamental elements in the entire maritime sector. Therefore, SEA Europe calls for strong collaboration among Commissioners responsible for transport, industry, technology, trade competition, and research.
Also read: China is a systematic rival for European dredging companies
Financial hurdles
The writer here would like to add that politicians and industry should not just focus on the importance of investment in research and development. The Chinese have already shown in numerous industries that they learn very quickly. The second important aspect is that an investment decision in a capital asset, which is a ship, is ultimately all about the business model, is there money to be made from it? As long as politicians continue to impose new restrictions on bank loans for shipping in Europe, such as not being allowed to invest in fossil projects, shipbuilding in Europe will never prosper.
Respond to this article by sending an e-mail to Antoon Oosting, editor-in-chief and author of this article: swz.rotterdam@knvts.nl.
Cartoon by Hans de Wilde/SWZ|Maritime.
