Logistyka Archive

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EU oil market. The Port of Gdansk is among the leading importers

 

By Marek Grzybowski

About 2.16 billion tonnes of crude oil were pumped through marine fuel terminals, of which the European Union’s marine terminals reloaded over 470 million tonnes in 2023. This result was surpassed by the economy of the People’s Republic of China, which imported 512 million tons by sea in the period January-December 2023, says Banchero Costa in the latest report. The Port of Gdansk is among the leading EU ports transshipping crude oil.
The war in Ukraine and disruption in supply chains made it another good year for oil trading companies. Demand for this energy raw material has increased despite high oil prices and the economic recession in many markets.
Despite the slowdown in many industrial and consumer markets, in the period January-December 2023, global transport of crude oil by sea increased by 5.3% y/y and reached 2,160.6 million tonnes, according to information based on data from observations of tanker traffic conducted by Refinitiv Maritime, excluding all cabotage trade.
In earlier years, global seaborne crude oil shipments were lower. In the period January-December 2022, they exceeded 2,050.9 million tons, and in 2021, 1,886.3 million tons were loaded onto tankers, while in 2019, 2,110.5 million tons were transported by sea between fuel terminals.

Persian Gulf – over 40% of global supplies
The dominant region and source of supplies is the Persian Gulf region. In the period January-December 2023, supplies from oil fields located in this region decreased by 1.4%. y/y to 869.1 million tons. Arab oil is still the dominant source of supply for many recipients, and recently also for Poland. Supplies from the Persian Gulf accounted for 40.2% of global maritime oil trade in 2023.
Exports from Russian ports increased in 2023 by 5% y/y to 229.5 million tons. This is 10.6% of the supply in global crude oil trade. From the USA, exports of this raw material increased by 19.5% y/y to 197.2 million tons. From West Africa, oil exports last year increased by 2.5% y/y and reached 174.8 million tons. Exports from South America increased by 20.8% y/y. and 157.6 million tons were loaded onto tankers. Exports from the oil fields of Northwest Europe increased by 3.4% y/y to 111 million tons.

China’s economy generated demand for 23.7% of global supplies
The largest maritime importer of crude oil in 2023 was the PRC. China’s economy generated demand for 23.7% of global supplies. Oil supplies to China increased in the period January-December 2023 by 16.6% y/y to 512 million tons, while a year earlier it was over 70 million tons less (439.9 million tons in 2022).
India’s imports increased by 1.9% y/y to 228.2 million tonnes. This means that India generates 10.6% of global demand. The South Korean economy imported +2.7% more in 2023 than the previous year. Fuel terminals pumped 140.4 million tons of crude oil from tankers. Japan reduced imports by 8.1% y/y. 121.6 million tons of crude oil were unloaded at the fuel terminals of Japanese ports.

The European Union is the second global importer
The European Union is the world’s second largest importer of crude oil by sea. In 2022, it overtook China. However, in the period January-December 2023, imports by sea to the European Union (27) increased at a rate four times lower than imports from China. It was only 4.7% y/y. As a result, tankers delivered 472.4 million tonnes to fuel ports in the EU. In 2023, the EU accounted for 21.9% of global crude oil trade.

EUROSTAT points out that “the observed significant fluctuations in EU oil imports [Ministry of Economy] are a consequence of high price volatility. The share of crude oil [in value terms – Ministry of Economy] in total EU imports increased from 9.1% in 2021 to 11% in 2022 and decreased slightly to 10.6% in the first three quarters of 2023.
EU countries, including Poland, increased their imports of crude oil. In 2022, the economies of EU countries imported 388.8 million tons, a year earlier it was over 402.5 million tons, while in 2019 the EU needed 446 million tons of oil imported through fuel terminals.

Increased spending on oil imports
These volumes also translated into an increase in spending on crude oil imports. The average monthly import from Russia decreased in 2021-2022, but due to rising prices, the value of imports from Russia also increased (EUR 0.6 billion). Imports from other non-EU partners increased, which meant that EUR 10.9 billion more had to be paid for supplies, according to EUROSTAT. – In the first three quarters of 2023, the trend was reversed, and the total average values decreased by 19% compared to 2022 (from EUR 27.6 billion in 2022 to EUR 22.4 billion in Q1-Q3 2023 y.) – says EUROSTAT.

About 14% of the crude oil delivered to the EU by tankers in 2023 was transported on VLCCs, about 43% arrived on Suezmax tankers and about 42% was offloaded from Aframax ships, reports Banchero Costa Research.
Rotterdam was the port with the largest volume of received oil delivered to the EU. In 2023, 101 million tons of crude oil reached the refineries located in its zone by sea. In second place was the Northern Port in Gdańsk, whose terminals pumped 37.6 million tons (in 2022 – 25.5 million tons).
– Naftoport has become an oil hub for the region. It is through the Gdańsk fuel terminal that the refining needs of both Poland and our closest neighbors are secured. Naftoport last year reloaded a total of 36.6 million tons of crude oil and fuels. Part of this cargo is supplies to German refineries. After cutting off supplies via the “Przyjaźń” oil pipeline from Russia, Poland became the most important gateway for them, informed the Port of Gdansk Authority.
In third place is the seaport of Trieste, to which tankers delivered 36 million tons. Next are the fuel terminals in Fos (22.0 million tons), Le Havre (19.3 million tons), and Wilhelmshaven (17.9 million tons). The following ports handled less than 15 million tons in 2023: Cartagena (14.3 million tons), Sarroch (12.2 million tons), Augusta (11.4 million tons), Algeciras (10.2 million tons), Tarragona (9, 8 million tons), Lysekil (9.5 million tons).

Turbulences in crude oil logistics
European Union countries have been hit hard by the turmoil in crude oil logistics. Ship deliveries had to replace pipeline transport. It was necessary to change the countries and ports from which oil was imported in 2023. Not everything went as expected and holes appeared in the sanctions through which oil from Russia leaked.
However, changes in logistics chains have changed transshipment in many countries and ports, both on the export and import side. In the period January-December 2023, supply from Russian ports (including Kazakh oil) decreased by 40.4% y/y compared to 2022 and 47.9% compared to 2021 compared to 2021. In 2023 58.6 million tons were exported through Russian terminals, while in the previous year it was 98.4 million tons, and in 2021 112.5 million tons.
Ukrainian drone attack on the ports of St. Petersburg and Ust Luga caused the Governor of the Leningrad Oblast, Aleksandr Drozdenko, to announce an alarm for ports in January and introduce the highest level of threat to critical infrastructure facilities. The alarm was announced in all areas of the oblast. In particular, it applies to terminals with installations located in the ports of Vyborg, Vysotsk and Primorsk.
Currently, Novorossiysk is the largest port exporting crude oil to the EU. In 2023, it amounted to 47.4 million tons. Russian ports have dropped in the ranking of oil suppliers to the EU over the last 2 years. However, they are the fourth supplier of crude oil to the EU transported by sea.

USA, Norway and Great Britain in the oil gap after sanctions
This is only 12.4% of the volume in the period January-December 2023. British and Norwegian oil from the North Sea accounted for last year. 18.6% of deliveries to the EU. Production companies from North Africa provide 17.3% of supplies, and 15.4% of the oil imported by EU countries arrives from the USA via tankers.
As a result of the sanctions imposed on Russian oil, supplies to the EU from the North Sea (Norway and Great Britain) increased by 14% year on year. In the period January-December 2023, 87.8 million tonnes arrived by tankers from British and Norwegian offshore drilling to EU ports.
Imports from North Africa (including Sidi Kerir) increased by 17.3% y/y to 81.7 million tonnes in January-December 2023. Imports from the US increased by 41.5% y/y, reaching a new record all-time amounting to 72.8 million tons.
Supplies from West Africa to Europe increased by 8.2% y/y to 54.4 million tonnes in 2023. Direct supplies from the Persian Gulf also increased sharply. In 2023, the supply dynamics reached 32.2% y/y to 45.3 million tons. The volume of deliveries from Turkey (Ceyhan) decreased by 32.7% y/y to 23 million tons from 34.2 million tons in January-December 2022.
The sanctions imposed on Russia have resulted in a significant decrease in direct imports of Russian oil to the European Union. Now the country’s oil comes indirectly through operators and traders using “gray” or “black” fleets.
Transfer ports are also cleverly used, where oil from ships carrying Russian oil is transferred to ships operating on official registers. STS operations – pumping oil in bays or in port roadsteads – are also common.
Russian oil also reaches EU ports in the form of products produced in refineries of third countries that have not imposed sanctions. And so, thanks to leaking sanctions, oil from Russia reaches European Union ports.

 

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The jack-up market, supply chains, availability of finance and human resources for offshore wind farms will be verified in 2024 and beyond

By Marek Grzybowski

The dynamically developing offshore wind energy industry will need installation ships. The jack-up market for offshore wind farms is being closely watched. New contracts are constantly being signed. This is despite disruptions in the OWE market, withdrawals from some contracts and changes in tenders for new installations.
Already two years ago, Rystad Energy predicted that the installation of offshore wind turbine heads with higher power than before may become a challenge for operators. The company’s analysts warned that in 2024, demand would exceed the availability of ships suitable for the needs of installation companies. The problem actually concerns not only the warheads, but also the foundations, monopiles and other parts necessary for the operation of MEW.
Rystad suggested that operators invest in new ships or modernize those already in operation. The lack of jack-ups with cranes with appropriate parameters on the market may result in bottlenecks in the process of building new wind farms in the middle of this decade.

High Demand for jack-ups and heavy lift vessels
– A total of eight new heavy-duty jack-ups were delivered in 2023, which was a breakthrough year for the future of the maritime industry. This is the second highest number of deliveries recorded in one year, second only to the record from 2012, which saw ten deliveries, reports Spinergie.
Six operators took delivery of the new installation vessels. Among them, operator Jan De Nul, who directed the Les Alizés crane from China to Remontowa to the ship. It is one of the world’s largest offshore wind turbine installation vessels.
In March 2023, it was sent straight from the China Merchants Heavy Industries shipyard for reconstruction to the Gdańsk Remontowa Shipyard. We wrote about the ship here
After the reconstruction, the “heavy lift vessel” could erect monopiles using a crane with a working load of 5,000. t. Can also be used to dismantle marine installations. Les Alizés was contracted to build the Gode Wind 3 and Borkum Riffgrund 3 wind farms in German waters. 107 foundations for wind towers and a transformer substation will be installed on German OWFs.
The Borkum Riffgrund 3 project, once commissioned, will be the largest offshore wind farm in Germany, and its commercial operation is scheduled to begin in 2025. Gode Wind 3 is being built simultaneously with Borkum Riffgrund 3 with a capacity of 900 MW. Both projects will be equipped with 11 MW Siemens Gamesa wind turbines. Borkum Riffgrund 3 is expected to come online next year.

Financial storms on wind farms
On this occasion, it should be mentioned that market turbulence caused Ørsted to sell 50% of shares in the Gode Wind 3 offshore wind farm with a capacity of 253 MW to funds managed by Glennmont Partners from Nuveen. The assignment agreement was signed in October last year. In addition, Glennmont also co-owns Ørsted’s Gode Wind 1 offshore wind farm.
The problems with investing in offshore wind and cautious investment in offshore vessels are explained by Spinergie analyst Yvan Gelbart: “In 2023, we did not have any new orders for vessels with heavy cranes. We understand that this is due to high interest rates and inflation , which makes signing a contract for a half-a-billion-dollar ship risky and impractical.”
DEME has included Green Jade with a 4,000 crane in its fleet. t in the middle of last year The operator already had several contracts. The unit was first directed to the installation of foundations for the 298 MW Zhong Neng project.
CSBC and DEME offshore jointly invested in the construction of the Green Jade installation vessel, with a total investment of TWD 2.1 billion (EUR 63.1 million). This is the second ship of this type to join the DEME fleet. The first Orion “crane” (worth approximately EUR 60 million) was introduced into the fleet in 2022.
Green Jade has dual-fuel engines and is Green Passport and Clean Design certified. Green Jade also has other innovations. The power plant has a waste heat recovery system that converts heat from exhaust gases and cooling water into electricity. The Huisman crane has a design that has a significant lifting height with a small minimum radius.

Time for jack-ups for offshore farms
Alfa Lift is a ship with a 3,000 m crane. i.e. for the transport of heavy elements belongs to Offshore Heavy Transport. It was put into operation in 2022. The ship has a transport and assembly deck with an area of over 10,000 m2. m². The ship can operate submerged to a depth of 15 m.
The hybrid system works based on a battery system. The electric-hybrid system is manufactured by Kongsberg. The ship can transport monopiles and other elements for the OWF. It can also be used to transport, install or remove overhead and underwater modules. More about the ship at GospodarkaMorska.pl
The Voltaire jack-up already operating in Germany is equipped with a 3.2 t crane, and the Blue Wind has a lifting capacity of 2.5 thousand. t. Japan Marine United (JMU) delivered at the end of January last year. Shimizu Corp. GustoMSC designed and equipped offshore wind turbine installation vessel (WTIV). Blue Wind is the largest WTIV in Japan to date. Jack up, Blue Wind will be used to install foundations and wind turbines.

Business plans for offshore wind farms to be revised
Both the price and availability of jack-up ships for the construction of wind farms are becoming a problem. Investors have been under increasing pressure from the economic slowdown since the beginning of 2023. Rystad Energy notes that this is not all.
Rising interest rates are putting pressure on the economic viability of new offshore wind projects. According to Rystad Energy, this causes many projects to become a financial burden on developers’ balance sheets – reports offshore-mag.com.
New projects require high initial investments to secure development rights and land, and then build and install large turbines whose average rotor diameter now exceeds 150 m.
In the UK, interest rates rose from 2022 to 5.25%. In 2023, the European Central Bank raised the interest rate by 4.25%, and at the beginning of September this year. back to 4.5%. The interest rate on main refinancing operations has remained unchanged since December last year. level of 4.5%. The central bank lending rate will be 4.75% and the deposit rate will be 4%. – These are the highest levels of interest rates in the euro zone since August 2001 – emphasizes “Bankier”.
Rystad analyst Shradha Sood said 2022 was a weak year for new activity in Europe as no financial investment decisions were made for commercial offshore wind farms. Difficulties in obtaining financing and rising prices of services were a big factor.
In July, Vattenfall suspended its project in the Norfolk Boreas in the southern UK North Sea. The suspension of works was justified by high interest rates and increased costs in the supply chain. The original contracted price for the execution and 37 SHP installations was GBP 35/MWh (USD 45.7/MWh) at 2012 prices. In 2023 it was approximately GBP 47.2/MWh (USD 57.51/MWh) at current prices .
– Political support and a review of the auction mechanism will be needed to revive investment in offshore wind, Sood suggested in mid-2022.

Slowdown in offshore windmills

It was estimated that as a result of market turmoil in supply chains, and especially price increases, the installed capacity of offshore wind energy increased by only 2% in 2023. This is the result of a delay in the implementation of offshore installations. According to WindEurope, in 2023, new offshore wind farms with a total capacity of 3 GW were built in the EU. For comparison, 14 GW was installed on land.
– Wind energy – both onshore and offshore, which was previously on a strong growth path – has encountered obstacles that have hindered its development – says Vegard Wiik Vollset, vice president and head of renewable energy research in the EMEA region at Rystad Energy – quotes offshore -mag.com..
As expected, the European offshore wind sector recorded last year a modest 2% annual install growth. Offshore wind energy shows a strong growth trend, but the recent wave of delays in the implementation of key projects has highlighted the sensitivity of the market – Rystad Energy experts point out.
At the end of last year the UK and Denmark were predicted to miss their 2030 offshore wind targets.

OWE progress in Europe

The UK is expected to achieve a maximum of 46.8GW of offshore wind capacity by 2030. This means the government’s target of 50GW will not be met. Similarly, Denmark is expected to install just over 10 GW offshore, compared to 12 GW planned in 2030.
At the end of 2021, the global fleet of foundation installation vessels consisted of 17 vessels. In 2022, the fleet increased by 5 units, and in 2023 by 8 installation ships. Each worth approximately EUR 520 to EUR 620 million. It’s still not enough. because Rystad claims that “despite the obstacles it encounters, the offshore wind industry continues to persevere, demonstrating resilience and long-term prospects.”
We are making progress in Europe, as France has recently put into operation the first offshore wind farms in the Saint-Brieuc and Fecamp water areas. The world’s largest floating offshore wind farm, owned by Equinor Hywind Tampen, with a capacity of 88 MW, began operation off the coast of Norway. This was widely discussed during the Floating Wind Days in Norway last May. Let us emphasize, a conference that gathered all major players interested in MEW.
But getting offshore wind back on a growth path will require significant changes in project development and permitting processes, Rystad experts say.
It is necessary to improve the supply chain and undertake new investments. The beneficiary of this activity is, among others: West Pomeranian Voivodeship and Pomeranian Voivodeship. A plant producing installations for OWE is being built on the premises of the former Gdańsk Shipyard and in the Pomeranian Special Economic Zone. The investor is ARP and its partner from Spain.
King Frederick X of Denmark laid the foundation stone for the construction of a gondola factory for offshore wind farms by the Danish company Vestas in Szczecin on February 2 this year. The plant is to be built in Ostrów Brdowski in the former ST3 Offshore hall complex. In Poland, construction of a factory for the production of nacelles for offshore wind turbines has begun in earnest.


Wind Offshore business requires investment
Wind Offshore business also requires continuous investment in research and development. Here, offshore projects include the activities of the Ship Technology Center, the Polish Register of Shipping, and the Offshore Center of the Maritime University of Gdynia. An important role is played by higher education and MBA studies conducted by the Maritime University and the Maritime University of Technology, the Gdańsk University of Technology and the University of Gdańsk.
An important task was entrusted to the Maritime Wind Energy Center of the University of Gdańsk and the Maritime Economy Research Center of the University of Gdańsk. Vocational training has been provided by the Maritime School in Gdynia at Polska Street for over 20 years.
Investors must verify their business plans, which must take into account the rising prices of supply chain elements, the increase in the prices of components for OWE and the costs of services and logistics. But the biggest challenge will likely be the availability of installation vessels equipped with appropriate cranes.
Acquiring staff with appropriate qualifications, predispositions and ready to work in dangerous conditions will also be a significant challenge. Accelerating investments in OWE in the North Sea and in the coastal zones of European Union countries may pose a threat to the development of OWE in the Baltic Sea and Poland.
Wind farm components and staff produced in Poland may be sucked out of our market. Therefore, the Polish OWE may be threatened by the improving economic situation on the markets of Great Britain, Denmark, Norway and Germany, as well as the developing markets of OWE in the Atlantic and the Mediterranean Sea.

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Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO: Goal 5 “Achieve gender equality and empower all women and girls”.

 

Marek Grzybowski (5) questions to Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO

An Exclusive interview to Baltic Journalist Maritime Club  of the Baltic Sea & Space Cluster  (BSSC)

The leading topic of the meeting was the role of women in world administration, science and maritime business during the WISTA Poland meeting.
– Ladies work in all areas related to the 17 IMO Sustainable Development Goals – Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO emphasized during the meeting.
We asked Director Dorota Lost Sieminska about the role and tasks of the Legal Affairs and External Relations Division of the IMO in activities for the development of safety in maritime transport, activities for sustainable development and other factors ensuring the functioning of people at sea.

 

Marek Grzybowski: Please, describe the fields in which the Legal Affairs and External Relations Division, IMO operates?

Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO:

Role of the Legal Affairs and External Relations Division

The Legal Affairs and External Relations Division consists of four offices: the Legal Affairs Office (LAO), the External Relations Office (ERO), the Public Information Services (PIS) and the Maritime Knowledge Centre (MKC).

Legal Affairs Office

LAO is responsible for providing legal advice on a wide range of issues related to the activities of the Organization. LAO protects the legal interests of IMO by advising the Secretary-General, the treaty-making bodies, the Member States and other Divisions of the Secretariat. LAO is responsible for reviewing the contractual activities of IMO, including agreements with private and non-state organizations such as banks and goods and services providers. The Office also assists with the negotiation and conclusion of Host Government Agreements for meetings and activities held by IMO in other countries.

LAO is responsible for legal advice on questions of related to the Convention on the International Maritime Organization and other treaties adopted under the auspices of the Organization and provides legal support at all stages of the amendment process. The Secretary-General of IMO is the depositary for more than 50 treaties. In this context, LAO examines instruments of accession, ratification, acceptance, etc. related to IMO treaties deposited by Governments and any associated reservations or declarations. LAO reports to the Assembly and to the Council on the status of the IMO Convention, as well as on the status of all treaties adopted at IMO.

Furthermore, LAO is responsible for the IMO Legal Committee and provides legal advice to the Assembly, the Council, diplomatic conferences, and various other committees. The Office also assists Human Resources Services on legal aspects of personnel issues. Additionally, LAO is responsible for protecting IMO’s intellectual property rights.

External Relations Office

 ERO is responsible for providing protocol support to meetings and events involving the Secretary-General, both at and away from Headquarters, as well as visits of high-level dignitaries to the IMO. The Office acts as the liaison between the Permanent Missions and the Government of the United Kingdom of Great Britain and Northern Ireland for the purpose of facilitating and ensuring the proper accreditation of the members of the missions to IMO. ERO is in charge of assisting in the presentation of credentials to the Secretary-General by newly appointed Permanent Representatives, as well as organising events hosted by the Secretary-General.

In addition to arranging flag-raising and ensuring the observance of official periods of mourning, ERO is responsible for maintaining up-to-date lists of Heads of Diplomatic Missions, Permanent Missions, Focal points, Liaison Officers as well as Intergovernmental and Nongovernmental Organizations which have observer status with IMO. ERO is also in charge of the events related to the World Maritime Theme.

Public Information Services

PIS provides strategic and hands-on communication and outreach support for all IMO’s work and initiatives. PIS is engaged in a multitude of connected and integrated outreach activities designed to improve global awareness of the Organization and its impact, through storytelling on multiple integrated platforms.  These include the news and hot topic sections of the IMO public website (in English,  French and Spanish); issuing press releases;, arranging press conferences and television/radio interviews, responding to media requests, in-house production of multimedia digital content including  videos, and giving presentations on the work of IMO to groups visiting the Organization. PIS provides summary reports of and provides media support to all IMO meetings.

PIS leads the annual Day of the Seafarer campaign (25 June) and promotes the International Day for Women in Maritime (18 May) and the World Maritime theme each year.

Maritime Knowledge Centre

The MKC provides collections, information resources and services to support the IMO Secretariat, Member States, representatives and delegates. Its specialized collections comprise the archives of official documents and IMO Publications, including IMO Conventions, meeting summaries, piracy reports, research guides, and a facts and figures page. The MKC also collects resources covering maritime affairs, shipping and other subjects relevant to the work of the Organization.

Additionally, the MKC runs a Current Awareness Bulletin that provides a monthly digest centred around topics and themes related to the work of IMO. The Bulletin is free to download and to distribute.

Marek Grzybowski: The maritime business situation has changed dramatically after the Covid-19 pandemic. How are the IMO doing in this situation?

Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO:

Indeed, the COVID-19 pandemic changed the world in many aspects. At the beginning of 2020, IMO  had to adjust to the new working methods, at the same time addressing the challenges faced by the shipping sector.

Throughout the pandemic, the maritime sector has continued to deliver the vital supplies that people need. Seafarers have worked tirelessly, at the heart of this trade, to keep goods flowing. Despite difficulties with port access, repatriation, crew changes and more, there can be no denying that seafarers have gone beyond the call of duty.

The Secretary-General of IMO worked with Governments, shipowners and relevant United Nations organizations to ensure that seafarers get all the necessary support. One of the major achievements was the adoption of the United Nations Assembly resolution calling on UN Member States to designate seafarers and other marine personnel as key workers and to implement relevant measures to allow stranded seafarers to be repatriated and others to join ships, and to ensure access to medical care.  The Secretary-General also urged the Governments to prioritize seafarers in their national COVID-19 vaccination programmes.

The United Nations bodies and agencies issued a large range of recommendations, including key legal, policy and technical guidance, as well as joint statements and declarations to address the challenges posed by the pandemic to the transport industry, and have highlighted that additional, country-level concrete means of action are needed to tackle them,

IMO continues to work with our sister UN agencies, with industry bodies and with Governments to address the ongoing needs of seafarers.

The Joint Action Group has been established to review the impact of the COVID-19 pandemic on the world’s transport workers and the global supply chain (JAG-TSC), consisting of representatives of ICAO, ILO, IMO, WHO, the International Air Transport Association (IATA), the International Chamber of Shipping (ICS), the International Organization of Employers (IOE), the International Road Transport Union (IRU), the International Transport Workers’ Federation (ITF) and International Union of Railways (UIC). The Group discussed serious and urgent challenges faced by transport workers resulting from the COVID-19 pandemic.

As a result of this cooperation, the IMO Assembly, which met at its 33rd session from 27 November to 7 December this year, adopted resolution A.1189(33) on the recommendations emanating from the Joint Action Group to review the impact of the COVID-19 pandemic on the world’s transport workers and the global supply chain (JAG-TSC).

Marek Grzybowski:  Russia’s attack on Ukraine creates new challenges for the global maritime business. What was IMO’s response to this situation?

 Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO:

The IMO Council, which met on 10 and 11 March 2022, at its thirty-fifth extraordinary session, requested the IMO committees to consider ways to enhance the efforts of Member States and observer organizations in supporting affected seafarers and commercial vessels and consider the implications of the situation in the Black Sea for the implementation of IMO treaties.

Through 2022-2023, IMO organs such as the Council, the Legal Committee, the Maritime Safety Committee, the Facilitation Committee, the Marine Environment Protection Committee and Technical Cooperation Committee) have reviewed and condemned Russia Federation’s actions and called on the Russian Federation to withdraw from Ukraine.

The IMO Assembly, at its 33rd session in December this year, discussed the ongoing conflict in Ukraine. The Assembly adopted several resolutions, among them resolution A.1183(33) on the impact of the Russian armed invasion of Ukraine on international shipping.

 Marek Grzybowski: The role of women in the maritime logistics business is growing. WISTA International, Anglo-Eastern Ship Management, the International Seafarers Welfare Assistance Network (ISWAN) and the International Chamber of Shipping (ICS) conducted an online survey to find out how seafarers perceive ‘discrimination’ and how on board based on their personal experiences. As many as 60% of women reported that they faced gender discrimination on board. 66% of respondents report that their employees have started harassing and intimidating co-workers. 25% of female shipboarders said that in the maritime transport sector, physical and sexual harassment is widespread, occurs on board and is an invasion of their privacy. International Day for Women in Maritime 2023 theme was  ”Mobilizing networks for gender equality”. What actions need to be mobilized for gender equality?

Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO:

As we know, the shipping industry is traditionally male dominated. In this context, in 1988 IMO initiated a gender programme to help the industry to be more inclusive and to support women to achieve a representation that is adequate in the current world.

Women are key maritime stakeholders that provide an important and vital contribution in the maritime domain. Within the framework of maritime development, and through its Women in Maritime programme, under the slogan: “Training-Visibility-Recognition”, IMO continues to support the participation of women in both shore-based and sea-going posts.

IMO maritime training institutions such as the IMO International Maritime Law Institute in Malta as well as the World Maritime University in Malmo also maintain gender balance and train women to be better prepared to pursue their careers in maritime professions. Every year we see more women as naval architects, engineers or maritime lawyers. They are well trained and educated to work shoulder to shoulder with men.  IMO supports access to maritime training and employment opportunities for women in the maritime sector.

The Organization is also strongly committed to helping its 175 Member States achieve the UN 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs), particularly Goal 5 “Achieve gender equality and empower all women and girls”.

Considering IMO’s Strategic Direction 6 (Address the human element), the IMO Council Group on Strategic Plan agreed to expand on the various aspects relevant to training, certification and watchkeeping as well as fair treatment, to respond to the current trends and developments such as new technologies, future fuels, bullying and harassment, including sexual assault and sexual harassment (SASH). The work to address sexual harassment at sea will be carried out at IMO in cooperation with ILO. Certainly, more awareness and training in this respect is needed and IMO will continue its efforts to address those matters.

Marek Grzybowski: IMO World Maritime theme for 2023: “MARPOL at 50 – Our commitment goes on”.  How has MARPOL changed over these 50 years? What challenges await us in the coming years?

Dorota Lost Sieminska, Director, Legal Affairs and External Relations Division, IMO:

Indeed, 2023 marks the 50th Anniversary of MARPOL, the most important international treaty to prevent pollution from ships into the marine environment. Initially, MARPOL covered accidental and operational oil spills from tankers, the prevention of pollution from chemicals carried in bulk, packaged dangerous goods, sewage, and garbage. Annex VI, which was adopted through the 1997 Protocol, added also the prevention of air pollution from ships.

Over time, the States Parties to MARPOL worked collaboratively to improve the treaty, adopt new requirements to better protect the environment and ensure that all current challenges are addressed. Through five decades, MARPOL has constantly advanced to keep up with lessons learned and new demands. The treaty had a positive impact on the marine environment and has changed how ships are designed and operated. Notably, the number of oil spills reduced by 90%. Thanks to MARPOL, the discharge of plastic garbage into the sea is banned and operational wastes, such as garbage and sewage, cannot simply be disposed of at sea, and are very strictly regulated.

More recently, Annex VI which regulates air pollution introduced new requirements to cut sulphur oxide emissions from ships. Current challenges include addressing the decarbonization of shipping to support the global fight against climate change. IMO is focusing its efforts to enhance sustainable shipping and protect the oceans and populations globally. We must address decarbonization, digitalization and innovative technologies, including automation. At the same time, the seafarers are in the centre of attention and are trained to be well equipped for the technological transition.

 

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Piotr Witek, President of the Management Board of MOORE Polska: ESG is important because it integrates environmental, social and governance aspects

Marek Grzybowski (5) questions to Piotr Witek, Managing Partner, President of the Management Board of MOORE Polska

An Exclusive interview to Baltic Journalist Maritime Club  of the Baltic Sea & Space Cluster  (BSSC)

ESG is important because it integrates environmental, social and governance aspects and this allows companies to operate in a sustainable way, contributing to social well-being, building trust and ensuring long-term success.

Companies are increasingly focusing on ESG issues not only because of social and environmental concerns, but also because of the growing interest of investors, who are increasingly directing their capital towards companies that demonstrate a strong commitment to these areas.

Introducing ESG as a step-by-step process, involving the whole team and skilfully adapting the approach to the specifics of the company in question. Assistance in these areas can help a small company implement sustainability and social responsibility practices more effectively.

Marek Grzybowski: Please, describe the fields in which the ESG is important?

Piotr Witek, Managing Partner, President of the Management Board of MOORE Polska:

ESG (Environment, Society and Governance) has become really important for several important reasons outlined briefly in the following paragraphs:

  1. Sustainability: The challenges of climate change, poverty, social inequalities and other environmental issues are making sustainability a key priority for society. Companies that focus on ESG issues can contribute to solving these problems and the long-term wellbeing of society.
  2. Investments in line with values: Investors are increasingly paying attention to sustainable investments. Companies that effectively manage ESG issues are seen as more credible, ethical and long-term oriented. As a result, they are attracting investment from those investors who look not only at profits, but also at positive social and environmental impact.
  3. Risk and regulatory oversight: Environmental, social and governance activities can affect a company’s reputation and carry legal and financial risks. As a result, more and more regulation is drawing attention to these areas and companies are required to report and act more transparently in line with ESG principles.
  4. Increased consumer trust: Customers are increasingly paying attention to what values a company stands for before they decide to buy products or use services. Companies that are committed to ESG principles can build stronger relationships with customers who prefer companies that care about society and the environment.
  5. Long-term performance: companies focused on sustainability and social responsibility are more resilient to changing market conditions. Effective ESG management can contribute to a company’s long-term performance and sustainability.

In other words, ESG is important because it integrates environmental, social and governance aspects and this allows companies to operate in a sustainable way, contributing to social well-being, building trust and ensuring long-term success.

Marek Grzybowski:  What does an entrepreneur understand by the acronym ESG?

Piotr Witek, Managing Partner, President of the Management Board of MOORE Polska:

ESG can be translated as ‘Environment, Social, and Governance’. These are the three key areas that companies and investors consider when assessing a company’s sustainability and social responsibility activities and performance.

The interpretation of the terms thus formulated could be as follows:

  1. Environment (Environmental): Refers to how the company affects the environment. Includes issues such as greenhouse gas emissions, natural resource consumption, waste management and other activities that affect the ecosystem.
  2. Society (Social): Includes aspects related to social relations, personnel management, employee safety, community engagement, diversity and inclusivity.
  3. Governance: Deals with the organisational structure, the way the company is governed, transparency, business ethics, compliance with legislation and corporate rules. It also deals with issues related to risk management and stakeholder relations.

Companies are increasingly focusing on ESG issues not only because of social and environmental concerns, but also because of the growing interest of investors, who are increasingly directing their capital towards companies that demonstrate a strong commitment to these areas.

Companies that effectively manage ESG aspects can enjoy better access to capital, greater customer confidence and other long-term benefits.

Marek Grzybowski:  ESG reporting covers topics such as recycling, greenhouse gas emissions, other types of air pollution, environmental impact, business ethics, employee health and safety, as well as safety management and accident prevention. What is the role of the audit firm in this process?

Piotr Witek, Managing Partner, President of the Management Board of MOORE Polska:

The auditor’s role in ESG (Environment, Social and Governance) reporting is key to ensuring the integrity, credibility and transparency of the information contained in companies’ ESG reports.

Here are some key aspects of the auditor’s role in this context:

  1. Verification of information: ESG auditors are responsible for verifying and confirming that the information contained in ESG reports is accurate, comprehensive and in line with accepted standards. This includes checking data on greenhouse gas emissions, natural resource management, social practices, diversity, business ethics and other ESG-related areas.
  2. Compliance with norms and standards: Auditors verify that companies comply with specific norms and standards for ESG reporting, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), or the Task Force on Climate-related Financial Disclosures (TCFD). Verifying compliance helps ensure consistency and comparability between different companies.
  3. Evaluation of processes and controls: Auditors assess the processes and controls that the company has put in place to collect, analyse and report ESG data. This includes checking that appropriate data quality controls are in place and that reporting systems are transparent and effective.
  4. Financial reports and ESG: Auditors also consider the links between financial reports and ESG data. They assess whether there is consistency between financial and ESG information and whether possible risks related to ESG aspects are adequately addressed in the financial reports.
  5. Provision of audit opinion: Following the audit, the auditor provides an audit opinion on the reliability and trustworthiness of the information contained in the ESG reports. This opinion is important for investors, customers, business partners and other stakeholders as it confirms that the information is trustworthy.

By carrying out these activities meticulously, ESG auditors play a key role in enabling companies to report ESG effectively and build trust among stakeholders. Reliable ESG reporting is becoming increasingly important with the growing importance of sustainability and social responsibility.

Marek Grzybowski:   Large companies have created special sections to meet the conditions and prepare ESG reports. How to help small businesses act in accordance with ESG mandates?

Piotr Witek, Managing Partner, President of the Management Board of MOORE Polska:

Implementing ESG of a small company can be beneficial for both the company itself and its stakeholders. Here are some ways you can help a small company implement ESG:

Training and awareness:

    • Organise training for the management team and employees to raise their awareness of the nature and benefits of ESG.
    • Awareness of what the key ESG areas are and why they are important for the long-term success of the company.

Risk and opportunity analysis:

    • Help the company identify potential risks and opportunities related to ESG aspects.
    • Conduct a business impact assessment in the context of environmental, social and governance issues.

Development of ESG strategies:

    • Development of an ESG strategy, tailored to the specific industry and company characteristics.
    • Help set ESG goals that are measurable, achievable and in line with the company’s mission and values.

Introduction of reporting standards:

    • Assist in the implementation of ESG reporting standards, such as the Global Reporting Initiative (GRI) or others appropriate to the industry.
    • Provide tools to effectively monitor and report progress in the ESG area.

ESG data management:

    • Assist in the collection, analysis and management of ESG-related data.
    • Help automate data collection processes to facilitate regular reporting.

Partnerships with stakeholders:

    • Building relationships with different stakeholders such as investors, customers, suppliers and the local community.
    • Identify stakeholders’ ESG expectations and help align the company’s strategy with these expectations.

Access to sustainable finance:

    • Help to identify sources of sustainable finance, such as sustainable funds or programmes that support ESG-compliant investments.

Investor education:

    •  Communicate with investors and demonstrate that the company manages ESG aspects effectively.
    • Preparation of relevant ESG materials and information for investors.

Introducing ESG as a step-by-step process, involving the whole team and skilfully adapting the approach to the specifics of the company in question. Assistance in these areas can help a small company implement sustainability and social responsibility practices more effectively.

Marek Grzybowski:   Many companies view the auditor as just another controller in the company. Especially small and medium-sized companies that have little staff perceive the auditor this way. Is it possible to create an atmosphere of partnership between the SME and the auditor? How does MOORE do it?

Piotr Witek, Managing Partner, President of the Management Board of MOORE Polska:

This is how this process is possible. It becomes crucial to create an atmosphere of partnership between small businesses and the auditor. This approach is called partnership auditing or audit consulting. In this context, the auditor is not only seen as an auditor, but also as a business partner who helps the company achieve its business goals, identify areas of improvement and adapt to changing market conditions.

Here are some of the concepts that Moore Polska believes will make partner auditing possible:

  • Understanding Business:Auditors can invest time in understanding the client’s specific business and business objectives. This allows them to better tailor the audit approach to the company’s specific needs.
  • Support in Process Improvement: Auditors can offer tips and suggestions for improving internal processes, risk management and operational efficiency in general.
  • Development of the Financial Strategy: Auditors can assist clients in developing a financial strategy, helping to identify areas for investment and achieving long-term financial goals.
  • Advice on ESG Issues: Auditors can act as advisors in ESG-related areas, helping companies to adapt to sustainability standards.
  • Education and Cooperation: Auditors can play the role of educators, helping clients understand the nature of auditing, the principles of compliance and the benefits of appropriate financial management practices.
  • Transparent Communication: An important element of peer audit is transparent communication. Auditors should actively engage in dialogue with clients, jointly solving problems and discussing audit results.
  • Personalised Approach: Auditors can tailor their approach to specific client needs, avoiding a one-size-fits-all approach and providing a more personalised service.

Creating an atmosphere of partnership requires commitment from both sides – auditor and client. It is important that the auditor is not seen as just an audit tool, but as a partner who supports the growth and success of the company.

A long-term relationship based on mutual trust and cooperation can benefit both parties.

Marek Grzybowski: Thank you for your answers

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Maritime tourism is moving “full speed ahead”

By Marek Grzybowski

The first information from tour operators confirms that in 2023 the number of passengers on cruise ships increased to 106% compared to the level in 2019. Approximately 31.5 million sea tourists chose passenger ships – estimates the Cruise Lines International Association (CLIA).

This means a higher growth rate of sea tourists than the estimated growth rate of international tourism. UNWTO (United Nations World Tourism Organization) estimated that the number of international tourists in 2023 will reach from 80% to 95% of the pre-pandemic level in 2020. At the beginning of 2023, UNWTO reported on its website about a 20% decline in bookings on a global scale.

CLIA brings together 53 cruise ship operators, including 43 ocean ship owners (28 global and 15 regional) with 293 ships. CLIA also includes 10 river cruise operators. There are 3 global companies and 7 regional shipowners with 194 ships. Nearly 300 active partners supporting tour operators and approximately 75,000 cooperate with the organization. companies from the tourism industry, including approximately 15 thousand agencies and 60 thousand travel agents.

These numbers make you realize how many entities make their living from tourism and how many institutions must operate for maritime tourism to develop efficiently. A whole lot of people work to ensure that the passenger reaches the ship safely, spends time on board and in the port, and disembarks the ship safely.

Sea passenger is a business at sea and in port
It has been calculated that, globally, the maritime passenger tourism business provides a living for 848,000 people. jobs, the revenues of countries where this business is developing reach USD 75 billion. The main beneficiary is the United States of America. Europe receives approximately USD 44 billion thanks to maritime tourism, and thanks to the industry serving maritime tourists, we have 315,000. jobs.
The rest of the world generates revenues from marine tourism of USD 11 million and provides 411,000. jobs – calculated by CLIA experts over a year ago (CLIA 2021 Economic Impact Study, Oxford Economics. 2022 (Economic Impact results to be released in September 2023). To put it illustratively, 24 passengers on a passenger ship generate on average one job.
Sea tourists return to ships repeating cruises or choosing new destinations. This proves good for passenger ship operators who are able to create regular customers. During research conducted a year ago, more than 6 out of 10 people (63%) who decided to take a cruise were passengers who returned to the connection they chose for the first time.
They often go on a trip with the same shipowner or even the same cruise ship. It is mainly millennials (68%) and Generation X (86%) who decide to travel again, and to a slightly lesser extent baby boomers (82%) and Generation Z (78%).

Cruise operators are investing
Cruise operators do not skimp on investments, and their expenditure on services and new production is significant and constitutes a significant impetus for economic development. An impulse that is particularly important during the economic slowdown in leading markets.
More than a year ago, purchases by passenger ship operators in Europe alone were estimated at approximately EUR 5 billion. Globally, it was over USD 35.37 billion. Around EUR 720 million was spent by passengers on board and disembarking in European ports. Globally, passengers spent over $1.9 billion in ports and on ships.
Over EUR 10.5 billion was allocated for new contracts over a year ago. Passenger ships with a contract value of over USD 13 billion were built in shipyards around the world. More than EUR 1.3 billion was spent on the wages of crews and land staff of cruise ship owners. Crews and personnel of operators around the world cost more than $5 billion during the year.
New investments also mean choosing a course for ecology. Many passengers choose cruises on ships that are environmentally friendly, not only on the water and in the air. There are those who pay attention not to harm marine fauna and flora.

LNG and electricity from the quay FIRST

So cruise operators are on a decarbonization course. They use progress and introduce new technologies on ships and in the infrastructure of passenger ports. The ships are equipped with new efficient engines and less noisy systems. Most large operators choose engines powered by gas from LNG systems.

Many claim that these are temporary solutions and new generations of cruise ships will be powered by ecological fuels from renewable sources. Therefore, bioLNG and renewable synthetic LNG are treated as a solution for today and the next few years.

The shipowner’s organization announces that “75% of CLIA’s cruise ship fleet will be able to use renewable fuels once they become available on a large scale.” It has already been announced, based on the analysis of the order portfolio placed in shipyards, that 60% of ships that are to enter into service in 2023–2028 will be based on power plants with LNG systems as the main power supply system.

LNG bunkering and energy supplies from the quay are necessary

New ships in the service also requires investments in infrastructure. Firstly, the ports’ potential for LNG bunkering must increase. And secondly, ports will compete in their ability to provide electricity to passenger ships from the quay.

CLIA wants to be the leader in organizing cruises in responsible tourism. “By 2028, the number of CLIA member cruise ships equipped with shore power will more than double,” the organization announces.

Operators associated with CLIA announce that “Emissions of harmful substances will be reduced by 99%.” The goals are ambitious. It is planned to reduce greenhouse gas emissions by over 20%, SOx by 99%, soot emissions by 98% and NOx by 85%. The forecasts are based on technical analyzes of the 2021 order portfolio for new ships.

“Every CLIA member ship currently under construction by 2028, with the exception of expedition vessels, is to be equipped with shore-power capabilities,” CLIA announces. Today, 30% of CLIA shipowners’ ships, corresponding to 40% of GT, have systems for connecting to land energy sources.

30% of passenger ships plan to install connections during their modernization. The collected data shows that 29 cruise ports around the world have at least one shore-powered quay. It is known that another 20 ports will join this group in a short time.

Changes in passenger ship construction technologies have made it possible not only to serve an increasing number of passengers, but also to introduce all kinds of entertainment and services on ships. New technologies have made cruises more and more environmentally friendly, which is also appreciated by passengers. And this is also one of the important elements of building a competitive advantage.