Germany: Maritime suppliers see good results thanks to climate-neutral shipping projects

Maritime suppliers in Germany said they are satisfied with the 2023 financial year, with investments in climate-neutral shipping ensuring good capacity utilization.

As informed, turnover increased by 5.8% to €11.3 billion although order intake stagnated in 2023.

“We expect business to develop well again this year. Last year’s stagnating order intake was probably just a short breather after the very strong previous years. Shipowners are now not only continuing to invest in newbuilding but above all in the modernisation and retrofitting of the existing fleet. The IMO requirement for climate neutrality is certainly a strong driver here, especially in the global after sales service business,” Martin Johannsmann, Chairman of the Executive Board of VDMA Marine Equipment and Systems (MES) and Managing Director of SKF Marine GmbH, commented.

“As an industry, we have developed the necessary technological solutions in a forward-looking and timely manner. However, we also realise that the enormous number of necessary retrofits could not only reach capacity limits but also monetary limits for operators,” he added.

Sustainability goals in the shipping industry

The International Maritime Organization (IMO) has set the strategic goal of achieving climate neutrality in shipping by 2050. Important interim targets include a 30 to 40% reduction in greenhouse gases by 2030 and a 70 to 80% reduction by 2040.

“We fully support these targets. All companies in our industry have recognised the issue of sustainability in the development of their products as an absolutely necessary step into the future and are implementing this. However, it is important to have a stable political environment that sets the right course promptly and reliably so that, for example, sufficient alternative fuels can be produced for the global merchant fleet in the foreseeable future,” Johannsmann stressed.

Producing sustainable products

Maritime shipping is already the most environmentally friendly mode of transport. Due to the large volumes transported, it emits 2 to 3% of global CO2 emissions.

“As a shipbuilding supplier industry, we have a great responsibility in the development of environmentally friendly products. Often in cooperation with other companies, we develop and design efficient, interlinked systems that enable the most effective overall reduction in greenhouse gases,” Lars Greitsch, Member of the Board of VDMA Marine Equipment and Systems and Managing Director of Mecklenburger Metallguss GmbH, said.

“Furthermore, it is important for us to produce in a climate-friendly way, especially at our domestic location, but also in Europe. As a maritime supplier, we are pioneers in many areas and have achieved good results in climate-friendly production. However, what is difficult to implement in a medium-sized production company is the ever-increasing effort involved in processing the growing EU regulations, such as the Corporate Sustainability Reporting Directive (CSRD) or the German Supply Chain Sustainability Act (LkSG). The necessary processing and reporting require more and more personnel capacity. At the same time, employees must become more and more productive in order to survive in international competition,” Greitsch continued.

Recruiting young talent

Employment in the shipbuilding and offshore supply industry in Germany rose to a good 64,500 highly qualified employees last year. Recruiting young talent is seen as the key issue for the future of the industry.

“We can only continue our current growth with sufficient young talent. We want to reach young people by showing them that shipping in particular is making an important contribution to making our world greener and achieving climate targets,” Greitsch explained.

The ship and offshore supply industry in Germany

German shipbuilding and offshore market directly purchases around 20% of products, with other European countries buying 35% of German exports. Overall, the industry supplies Germany and Europe with half of its products.

North America has grown significantly as a market. China and Korea continue to play an important role as sales markets, according to VDMA.

According to a recent VDMA report, China’s mechanical engineering industry is currently riding a new wave of ‘going global’. The Chinese mechanical engineering industry is pushing ever harder into the global markets and, with the help of industrial policy support, is becoming a harder competitor for German and European companies.

“The Chinese mechanical engineering industry is currently experiencing a new wave of “going global”, characterised by higher quality and technologically advanced products at a comparatively low price,” Karl Haeusgen, VDMA president, pointed out.

“And the weakening demand in the domestic market is an additional driver for the new wave of internationalisation of Chinese companies,” he further said.

The association has urged European policymakers to protect the EU internal market from distortions of competition from China. Future measures should be in line with the rules of the World Trade Organisation (WTO), VDMA believes.