According to the “Economic Costs of Climate Change” study, commissioned by the Federal Ministry for Economic Affairs and Climate Action, Germany could face costs of up to 900 billion euros by the middle of the century. There are a wide range of reasons for this, including product and raw material supply bottlenecks, damage to buildings and infrastructure and the implementation of environmental and climate protection measures. The industry is tackling the latter challenge in very different ways, including with subsidies.
“The funding makes an important contribution to strengthening the level of innovation and competitiveness of European and German industry, to facilitating transformation processes and to closely integrating the stakeholders involved,” explains Helena Rapp, Advisor, European Initiatives and Funding Programmes in the Maritime Industry at the German Maritime Centre (DMZ), emphasising that a wide range of EU funding and financial resources are available, especially for small and medium-sized enterprises. The DMZ sees itself as a link between politics, administration, business and science for these companies. “We’re looking to offer all those involved guidance in the EU funding cosmos and increase the visibility of funding programmes,” she adds. This is because the number of programmes has grown steadily in recent years and the corresponding associated responsibilities are broadly distributed. (https://dmz-maritim.de/maritimer-foerderkompass-europa/)
Diversity at national and European level
At European level, Rapp highlights seven funding programmes that are significant for the maritime industry in a wide variety of market segments. For projects focussing on research and innovation, this is primarily Horizon Europe (with a funding amounting to 95.5 billion euros between 2021 and 2027). Environmental and climate protection projects fall under the EU Innovation Fund and the “LIFE” environmental programme. Financial support for infrastructure measures and mobility is provided by the Connecting Europe Facility programme, the European EMFAF and ERDF (Interreg) funds and the Erasmus+ programme. “The range of EU funding topics is just as broad as the range of contacts,” Rapp continues. “It stretches from alternative fuels and drive systems, storage technologies and green digitalisation to secure infrastructure and sector coupling.”
Where the current situation is concerned, Rapp confirms that the maritime industry is on the right track towards climate and environmental protection. “All those involved are addressing the challenges with a great deal of scope for transformation with a view to realising the political goals,” she acknowledges. She believes that a lot will happen
in the maritime industry over the next few years, even if some parameters will take time and cannot be changed overnight, and that there is no need to fear green-washing. “It doesn’t work like that in our industry as companies have legal requirements and consumer demands to fulfil. If they don’t, they’ll not only have competitive disadvantages and customer losses to contend with, but also sanctions.”
Going green with five “Orcas” and a “Thor”
What measures do local companies intend to take to contribute to environmental and climate protection and, above all, how will these be financed? LOGISTICS PILOT spoke with four industry insiders.
As part of its climate and environmental protection activities, the Bremen-based Harren Group is focussing not only on a range of measures within its existing shipping fleet, but also on constructing new, modern and environmentally friendly entities. To this end, its newly developed “Orca” Class heavy lift vessels are being financed with a green loan that fulfils the requirements of the Poseidon Principles* and has been certified by the DNV classification society. In addition, the BMDV has pledged funding from the “Sustainable Modernisation of Coastal Vessels” (NaMKü) programme via the TÜV Rheinland project management agency. This financial backing has enabled the Harren Group to order five “Orcas” from the Wuhu shipyard in China, with the main environmental technologies being provided by European suppliers. On a six-year charter, the first two vessels in the series will be operated exclusively by Siemens Gamesa Renewable Energy to transport components for new offshore
wind farms, thereby contributing to global decarbonisation.
Furthermore, the Harren Group has responded to the strong demand in the offshore wind repair business in the North Sea and acquired the “Thor” installation vessel in 2022. The purchase was financed as part of the European ESG Shipping Fund and was the first transaction of the Eurazeo Sustainable Maritime Infrastructure Fund (ESMI), which focusses on green leasing and aims to support operators and owners of small and medium-sized vessels in Europe with customised financing solutions for innovative investments and sustainable fleet development. Since its acquisition, the “Thor” has been used to repair European offshore wind turbines.
“Funding makes an important contribution to strengthening the level of innovation and competitiveness.”
Helena Rapp, Advisor, European Initiatives and Funding Programmes in the Maritime Industry at the German Maritime Centre
INFO
18 partners – one climate change project
As part of the “HYPOBATT” (Hyper powered vessel battery charging system) pilot project, 18 key players from the European maritime sector – including Norden-Frisia, a Norderney-based shipping company – have joined forces to develop a rapid-charging system for electric ships and new business models for battery-powered boats. The aim is to make ferry operations faster and more sustainable. Furthermore, the charging stations are intended to be modular, which will enable electric port vehicles to make use of this infrastructure at a later date, thereby reducing a port’s overall carbon footprint. “Companies that don’t want to be left behind where climate and environmental protection are concerned can have the opportunity to play an active role in such projects,” explains Maraike Pommer, Project Manager Energy & E-Mobility at Norden-Frisia, outlining the advantages of the European joint project. “Even without their own development department, they gain first-hand knowledge of new technologies.”
A fully electric ship was urgently needed for the project. “This coincided perfectly with our order for the first fully electric catamaran for the Norderney ferry service – its battery capacity of 1,800 kilowatt hours is just enough for the return journey from Norddeich to Norderney,” continues Pommer. The ship is currently being built at the Damen shipyard in the Netherlands and is expected to enter service from June 2024. Norden-Frisia is partly financing the “HYPOBATT” but can also expect to receive up to 70 per cent funding from the EU, which is supporting the project with 9.35 million euros as part of the “Horizon 2020” programme.
Wilhelmshaven is delighted to have successfully struck a balance between automation and reducing emissions with the “Shunting Terminal 4.0” project.
Automation and reduction of emissions on the railways
In Wilhelmshaven, the IHATEC “Shunting Terminal 4.0” project, funded to the tune of 2.35 million euros by the BMDV, concluded at the end of November 2023. Its aim was to automate the railway shunting processes in the JadeWeserPort’s pre-routing group and to reduce noise and emissions there. Indeed, when those involved reflected on its achievements, Oliver Hauswald, Managing Director of Container Terminal Wilhelmshafen JadeWeserPort Marketing GmbH, emphasised that the research project had revealed major potential for increasing rail-side process efficiency at JadeWeserPort. “We’re delighted that the only deep-water container port with rail-side infrastructure here in Germany provides an ideal environment for testing this pioneering and climate-friendly shunting method,” he said. “We would very much welcome opportunities for a follow-up project at the JadeWeserPort that might explore how the system could be incorporated into how we actually operate, should they arise.” In this context, environmentally speaking, the use of a hydrogen-powered locomotive and fuel-saving systems is also conceivable. In the latter case, the IT system would send a command to the automated locomotive instructing it to coast or to drive in a manner that saves energy.
Bird’s eye view of the nine J. MÜLLER warehouses in Brake, on which photovoltaic systems covering around 60,000 m² have been installed.
Clean electricity from above
Port services provider J. MÜLLER has opted for a different kind of climate protection – September last year saw them install photovoltaic systems covering around 60,000 m² on nine of their Brake seaport warehouses. With an output of 12.8 megawatts peak (MWp), this enables the company to produce around 30 per cent of its electricity requirements itself. Public subsidies were not required for this construction project, instead they were able to provide investment amounting to 11 million euros from their own funds, thanks to the long-standing cooperation they enjoy with their primary bank. “The installation of this system had been on our agenda for a long time,” explained Cedric Witten, Head of Technology/IT at J. MÜLLER, outlining the decisive motivating factor behind the project. “However, the idea of working sustainably with renewable energy and, in doing so, reducing long-term costs only gained massive momentum due to last year’s energy crisis.”
Customers and consumers are probably paying too
Although both the EU and the German government have launched numerous funding programmes to reduce the costs of climate and environmental protection, Dr André Wortmann, Head of the Maritime Competence Centre at PwC Germany, explains that the maritime industry is currently bearing the financial responsibility for implementing them. “Of course, it’s to be expected that companies will try to pass these costs on to their customers as much as they can,” he states. As regards funding programmes available to the maritime industry, he adds that many have not been used extensively yet. The reasons often given for this are that the funding criteria are very strict or that the application process is too complicated for many of the smaller participants in the market.
Numerous companies surveyed by PwC as part of its 15th shipping company study also expressed their expectation that it will take longer than planned to implement many of the climate protection measures. “There are several reasons for this,” continues Wortmann. “These are, above all, the high capital requirements and uncertainties with regard to future legislation and future-proof technologies.” He cites fuel as a concrete example of this. “So far, there is no consensus on which alternative fuels will prevail, with the result that 70 per cent of the shipping companies we surveyed stated that this would result in significantly fewer new ship orders. Yet, these would potentially be more environmentally friendly than the fleets currently travelling the seas.”
Politicians must create the framework
Thorsten Dornia, who has been Chairman of the Bremen Freight Forwarders’ Association since last April, has a similar view. He believes that the higher costs for climate and environmental protection will be passed on to consumers in the vertical value chain sooner or later. He also expresses sharp criticism towards politicians. “Climate and environmental protection don’t come for free,” he says. “This must and will be at the expense of purchasing power. It would be dishonest of politicians to pretend that this can be achieved without restrictions.”
Just like Wortmann, Dornia considers the funding programmes, especially EU ones, to be exceedingly bureaucratic. He feels that large firms, shipping companies and internationally active port handling operators have easier access to these funds than small and medium-sized enterprises (SMEs). “Apparently, it’s an enormous administrative effort and you need a great deal of expertise to obtain funding from these programmes,” he says. “As a rule, SMEs don’t have the necessary capacity for this.” In addition, the German government’s “Climate-friendly Commercial Vehicles and Infrastructure” (KsNI) national funding programme may indeed be suitable for SMEs, but it is hopelessly underfunded. Despite such problems, he remains optimistic about the future and rates the maritime industry and logistics sector’s climate protection efforts highly. “I assume that most of those involved are well aware of the seriousness of the situation and that many steps are being taken not only because the law dictates it, but because they want to. It’s now up to national and international policymakers to provide a framework that results in a level playing field to prevent people from gaining economic advantages by refusing to transition.”(bre)
“Many funding programmes have not been used extensively yet.”
Dr André Wortmann, Head of the Maritime Competence Centre at PwC Germany
“Climate and environmental protection don’t come for free.”
Thorsten Dornia, Chairman of the Bremen Freight Forwarders’ Association
Two climate funds, many unanswered questions
At the World Climate Change Conference (COP28) held in Dubai in late 2023, the nations present agreed on a new investment fund amounting to 30 billion U.S. dollars to channel more capital into climate protection projects in poorer countries. Presiding over the COP28 conference, Sultan Ahmed Al Jaber described this step as a “historic decision” and announced that the United Arab Emirates would contribute 100 million U.S. dollars to the fund. Development Minister Svenja Schulze pledged the same amount on behalf of the German government. At the same time, she called on all countries – that are willing and able – to contribute to the new fund against climate damage. This is a major sticking point in the eyes of critics, as the fund’s donor base has been kept open, with payment being made on a voluntary basis.
At national level, in August 2023 the German Federal Cabinet adopted a plan that would remain in place until 2027 to finance the Climate and Transformation Fund (KTF). The intention is to make a significant contribution to achieving Germany’s energy and climate policy goals. The funding priorities defined within it are the energy-efficient refurbishment of buildings, the decarbonisation of industry and the expansion of renewable energy, electromobility and charging infrastructure. Reportedly, a total of 211.8 billion euros were to be made available between 2024 and 2027 to promote the energy transition, climate protection and transformation. At least, that was the plan until recently. In November 2023, the Federal Constitutional Court ruled that the 60 billion euros in ultimately unneeded loans taken out to tackle the Covid-19 pandemic could not be transferred over to the KTF. What this means exactly was still unclear at the time of going to press. Until now, all the government has said is that the judgement will also have an impact on the Climate and Transformation Fund.(bre)
