Cruise industry leaders convening in Genoa at the industry’s first European Summit devoted to decarbonisation of cruise have called on governments to join in the effort by creating the right regulatory framework and investments to match the industry’s commitment to accelerate development and delivery of sustainable maritime fuels and technologies necessary to achieve net-zero carbon cruising by 2050.
The tone was set during the opening session at the Cruise Lines International Association (CLIA) European Summit held today in Genoa, as senior leaders discussed the industry drive to innovate.
Cruise lines are investing significantly in research projects and new innovative technologies aimed at improving their environmental performance. New vessels are however only one part of the equation, and the industry will need access to adequate infrastructure and supply of sustainable fuels to achieve their objectives.
During opening remarks at the Summit, Pierfrancesco Vago, Executive Chairman, MSC Cruises and Global Chair, CLIA said: “The cruise industry shares a vision with European governments of a sustainable blue economy. The industry is stepping up and can deliver on our promises. Clear support from decision makers is needed to ensure that the right infrastructure is developed and is accessible, and that the right incentives can guarantee the development and delivery of sustainable maritime solutions.”
Marie-Caroline Laurent, CLIA’s Director General in Europe, added: “The cruise industry has already taken firm and robust measures towards achieving its decarbonisation goals and, collectively, is committed to deliver. The cruise industry is powering European maritime industry innovation and is critical to help the EU to deliver the necessary step change towards decarbonisation. It is essential that we now need a clear legislative framework to encourage the investment and innovation that will be required for industry to achieve the 2030 EU Fit for 55 objectives and ultimately our 2050 ambitions.”
A panel of cruise lines, shipyards, manufacturers, port operators and fuel producers met to discuss potential alternative fuels and technologies on the horizon to deliver zero-emission cruising. The capacity to produce renewable marine fuels at scale remains very limited, with more focus on other transport modes. The industry is calling for adequate incentives and support mechanisms from governments to secure the supply of future sustainable fuels the maritime sector.
Mr Vago said during the conference that port infrastructure had been identified by CLIA as another very important area where public finance investment is essential. Cruise lines have committed to use shoreside electricity (SSE), where offered by ports, and 66% of the global fleet will be equipped to connect to SSE by 2027. Only a handful of cruise berths provide SSE in European ports, while the European Union goal is for all main ports in the continent to be equipped by 2030.
Ms Laurent concluded that the industry efforts are key to its future in Europe, as the sector has a vision to become the most sustainable form of tourism, reducing emissions at sea and in ports, fully implementing the concept of circularity for waste.
Notes to Editors
With 93% of cruise vessels built in Europe, in the next five years this represents more than €40 billion investment in European shipyards with 78 vessels on order.
The Summit took place as CLIA’s membership of the Sustainable Fuel Alliance was confirmed. The alliance is focused on boosting production and supply of renewable and low-carbon fuels in the aviation and waterborne sectors and brings together organisations sharing a vision for the future value chain of sustainable fuels.
I am delighted to be here with you today for CLIA’s inaugural European Summit and to be in a city overlooking the Mediterranean, the birthplace of the cruise industry. In Genoa of all places, a city that played a key role in the development and growth of shipping. In the 18th Century, the only way to travel the world was across oceans. It was a time of exploration, as clipper ships sailed in search of new lands. The 19th Century saw the introduction of the merchant steamship, which sparked public imagination as ships started to carry passengers for immigration. The modern-day cruise emerged in the 20th Century, when leisure travel became possible for millions of people. Now, in the 21st Century, we are once again leading the way in Europe as our industry enters a new era of sustainable growth.
Sustainability is today at the very top of our agenda. And here again our history informs our future. Today, we are combining our heritage with present-day ingenuity to achieve our sustainability ambitions. We are witnessing the advent of next-generation, technologically advanced cruise ships. Each new ship design is typically 20-25% more efficient than the one it replaced.
Looking at Europe, I should like to share some observations on what I believe the future holds. First, our industry is rebounding, supporting European economic growth. Having completed our return to service, our focus is now on reaching pre-pandemic growth rates. Europe is key to this as here we can tap into the wealth of culture and destinations. Our fleets are also expanding: 78 cruise ships are on order for delivery between 2022 and 2027. 93% of these will be built in Europe, representing an investment of €47 billion and an economic output that exceeds €200 billion. This generates thousands of jobs in Europe’s shipbuilding regions, including Liguria, and it feeds a supply chain that extend across the entire continent. To be the centre of excellence for the construction of complex, technologically advanced ships is the envy of the rest of the world.
In 2019, our economic impact in Europe amounted to €57.6 billion and 400,000 jobs. We are the engine room of Europe’s maritime economy, and we are providing the backbone of its skills base for the future. The cruise industry is on its way to becoming one of the most sustainable forms of tourism. We will do so by reducing our vessels’ emissions in line with our commitment to reach net zero carbon cruising by 2050.
We support the long-term objectives of the EU Green Deal and the shorter-term goals of the Fit for 55 package to reduce CO2 emissions in Europe by 55% by 2030. This is not new: cruise lines have been investing in environmental technologies for years. LNG, the cleanest marine fuel available at scale, has become a reality for our industry. 24 LNG-powered ships are to be delivered in the next six years across all CLIA brands. We are also investing heavily in the development of sustainable propulsion technologies, greater energy efficiencies, and alternative fuels.
We support a well-to-wake approach that considers emissions related to the entire life cycle of a fuel — from its production until it is used on a vessel – as the standard for our industry. This would allow for a realistic assessment of emissions and support the uptake of sustainable fuels.
My most important message today is that we share a common vision with EU governments: a vision for a sustainable Blue Economy. We are stepping up our efforts and will deliver on our promises. But we need authorities to define a clear and uniform strategy for the decarbonisation of shipping. We need to ensure that the right infrastructure is developed, that it is accessible, and that incentives are in place to support the development of sustainable fuels. Let me offer three specific examples:
First, research and access to financing: cruise lines are involved in many research projects, looking at new fuel sources such as methanol, synthetic fuels, biofuels and hydrogen. But much of this research is in the experimental phase. Large-scale research will require public finance. This is why we are calling for a full earmarking of revenues collected from the EU Emissions Trading System as of 2023, to be reinvested in innovation projects for our sector. It is also essential that capital flows continue to enable technology development and other environmental initiatives.
The cruise industry has demonstrated its capability to achieve significant emissions reductions. The purchase, financing, and operation of cruise vessels should be considered as an integral part of sustainable finance programmes, such as the European Taxonomy initiative. If governments were to choose not to support this inclusion, it would imperil shipbuilding activities in Europe and related technology development. It would also impact thousands of jobs and risk losing Europe’s leadership in cruise ship construction.
Second, for years we have equipped our ships to use shoreside electricity. 93% of the current order book capacity is slated to be equipped with this capability. In five years, at least two-thirds of the global cruise fleet will be equipped. But only 0.6% of cruise berths in Europe are ready to provide shoreside power. This contrasts with the EU’s proposed ambition to equip all TEN-T ports by 2030. Significant financial investment will be essential to meet this goal. It will cost an estimated €5 billion to equip one-third of cruise ports in Europe.
The direction of the EU rules is clear and may place cruise lines in the position of having to avoid some ports where shoreside power is not available. We therefore ask ports and authorities to support these much-needed investments. There are many shoreside electricity collaborations underway between cruise lines, ports, and public authorities, but the scale of investment needed must be addressed. CLIA is committed to help our cruise port community reach these objectives.
The third example is support mechanisms to ensure production of sustainable fuels. CLIA has recently joined the European Commission’s Low Carbon Fuels Value Chain Alliance to support efforts to boost production and supply.
Cruise lines are also investing in projects facilitating the development of low-carbon fuels. But we need governments to implement the right regulatory frameworks and policies to ensure that investments are targeted to assist the maritime sector’s decarbonisation. The maritime sector will need, according to the European Commission, around 43 mega tonnes of sustainable marine fuels by 2050 to meet our decarbonisation objectives in Europe alone. Today, production capacity is extremely small and focused on other transport modes and industries. We need a level-playing field in EU regulation that provides the same benefits in both the EU ETS and the Renewable Energy Directive on the supply of renewable marine fuels.
The regulatory framework must incentivise the development of alternative fuels for our sector. Without these incentives, we will not succeed in meeting our climate ambitions. The EU is driving forward its vision for a future of energy security and sustainable development. The cruise industry is picking up the mantle that has been laid down by the EU to all sectors of industry and society.
I would now like to mention a topic that is of great importance for us all. In October 2021, 139 countries in the OECD reached a historic deal to address tax challenges arising from the digitalisation of the modern economy, recognising at the same time the unique nature of shipping operations. The deal however falls short of acknowledging the mobile nature of our assets and workforce. The cruise industry needs the support of maritime nations like Italy in bringing the matter to the attention of the OECD when drafting rules concerning credits for the investments made in assets and employment.
Now, before I end my intervention, I would like to dedicate a few words to our hosts, Italy.
Minister Bellanova will speak via video shortly, but I wanted you to be aware of some of the ongoing discussions taking place between our industry and the relevant Italian authorities. To begin with, in Italy we miss having a single political representative with oversight of all maritime policies. This has caused a lack of focus on the Blue Economy, despite its positive impact on Italy’s coastal communities. Our dialogue with Italian authorities should be intensified and ideological approaches should be replaced by innovative and technical solutions.
We have experienced this in the delayed management of the ‘Fit for 55’ dossier – and in the lack of implementation of shoreside power connectivity in Italy’s ports. Despite the significant resources already allocated, we will not see solid results before 2030. The way things are now, the timeline of the Recovery and Resilience Plan will simply not be met. We need to change the pace, to accelerate projects, and to secure competitive energy supplies. To be clear, we are grateful to the current government in Rome, which has done so much for Italy. We particularly appreciate the ongoing efforts to find a long-term solution for our presence in Venice. Closing access to cruise ships in the absence of an alternative solution forced us to make sacrifices. We hope that we will soon see Marghera become a viable option for our ships.
Dear all, thank you for your time and attention. These are complex matters, but of great importance to all of us. CLIA’s role is to bring the entire industry together, to represent us and to help solve the challenges that we face: decarbonisation and so many others.
I particularly wish to thank our hosts today. Represented by Mr Toti, President of the Liguria Region, and Mr Bucci, Mayor of Genoa. On behalf of CLIA, I also take the opportunity to congratulate you both on your recent electoral successes.
Ladies and gentlemen, not only are we investing in our industry’s future, but also in the future of us all, and our children.