In the run-up to the 5th International Congress “Hydraulic Engineering Structures and Dredging”, René Kolman, Secretary General of the International Association of Dredging Companies (IADC), long standing partner of PortNews Media Group, tells about the current state of the dredging industry and its key development trends.
- What is the impact of the pandemic on the global dredging market?
- All regions of the world suffered from COVID-19. The major problem for the dredging companies are the crew changes. The turnover remained pretty stable, with only Europe showing a slight increase. What we are seeing is a diversification of business. The Big Four dredging companies are gradually moving to other niches, for example, offshore construction and the offshore wind farm industry. While not a traditional dredging activity, companies are investing heavily in these sectors with equipment for offshore wind farms, cable laying. Basically everything related to the energy transition business.
- What are the main challenges of dredging companies performingtheiroperations?
- All over the world, the dredging industry was seriously hit by restriction measures related to security during crew transfer. In some instances seafarers had to stay on board vessels for over six months. Companies therefore encountered additional cost for crew transfer, which eventually caused serious delays in execution of dredging projects, proficiency as well as productivity. All that’s still having an impact on the dredging sector, especially the dredging contractors working internationally. It’s not such a problem where contractors are working locally and crew transfer isn’t so much of an issue. With regard to future pandemic situations: companies can develop a protocol how to successfully deal with such situations.
- Could you tell us about the largest ongoing dredging projects?
- There are a few to mention. One of the major projects is in Manila being executed by Boskalis. The contract is for the land development design and construction of the Manila International Airport. DEME is engaged in the prestigious Abu Qir port project in Egypt and, of course, the land reclamation and extension project of the Singapore port. Five large areas (the 5 Tuas-fingers) are being reclaimed and developed as container terminals. It's an ambitious project. The first two phases have already been delivered. The former port area is being redeveloped as an urban area for residential use, a project DEME and Boskalis are currenltly working on.
- As I understand, EU dredging companies do not work in America andChina...
- That's correct. According to the Jones Act in America, all maritime and dredging activities are seen as a matter of national maritime security and therefore can only be performed by US based companies. Take the Great Lakes, for instance. There are not many dredging companies in the US like the large Western European dredging companies. They are primarily small, regionally working dredging contractors. As an EU dredging company, you have to establish a US flagged company to work with using dredging vessels built at an American shipyard. In addition, you also have to employ only US workers.
Both the US and China are closed dredging markets. The US market is estimated at approximately EUR 1 billion, while the Chinese market is between EUR 4-5 billion, according to the annual report of China Communications Construction Company Ltd (CCCC). This includes maritime and inland dredging volume. It is not possible to have these figures verified. Currently we report only figures of open dredging markets, which is little less than EUR 5 billion. The EU dredging companies are not happy with the current situation because there is no level playing field. The Chinese market is closed and Chinese companies are financially supported by the government. The use of qualitative criteria, with regard to sustainability, such as emissions, biodiversity, labour conditions, etc. could improve the situation.
- Do you see any changes in the global dredging market amid the active expansion of Asian companies?
- No, I don’t see many changes. The dredging turnover has stabilised around EUR 5 billion over previous years. An important change is the growing turnover Chinese dredging companies are making outside of China.
- Can you tell about the IADC’ current activity, the dredging industry’s sustainability instruments, and provide an overall picture of the sector?
- There are a couple of activities within the IADC currently going on. The International Institute for Sustainable Development (IISD) in Geneva has a sustainable asset evaluation instrument. They make overall project assessments including so called externalities. These are impacts of a project, both positive and negative that are not monetised and normally not taken into consideration when evaluating project proposals. These externalities, such as influence on biodiversity or recreational value might have a large impact on the project value for society at large. As a result, you get a sustainable project with the most of the added value for society. The IISD made a sustainable asset valuation of the Hondsbossche and Pettemer Sea defence project in which a nature-based solution (NbS) was used to enforce this weak link in the Dutch sea defence. According to preliminary results, the additional value of using a NbS method was EUR 100 million higher than the traditional grey solution.
This summer an Msc student joined IADC to undertake a study and comparison of the different valuation methodologies. The results of which will be published in an article in the upcoming December issue of Terra et Aqua.
We also working within the UN environmental programme (UNEP) on the topic of sand as a resource. In 2019, UNEP made a report concerning the global utilisation of sand. The resource was estimated as 50 billion m3. The report also said that the dredging industry takes 2%–4% of the global use of sand. The report mentioned no company names apart from Boskalis, DEME, Van Oord and Jan De Nul. A lot of the dredged material remains into the natural system and can not be compared with the use of sand for concrete. For example, when you use sand for beach replenishment, then the project has some impact on biodiversity, on the seabed, on the life of the beaches, but the sand remains in the ecosystem. The sand is washed away back into the sea again. We are working on a white paper to make an inventory of the use of sand by the dredging industry and to place it in perspective. In addition, we want to ensure that all kinds of nature-based solutions are considered to reduce the quantity of sand used.
In September, we also published a joint study to explore private financing of green coastal, river and port projects. The report "Financing Sustainable Marine and Freshwater Infrastructure" contains a lot of sustainable projects shown through 9 case studies. Is shows there is a lot of money and funds available that are labelled "sustainable". Yet there are two separate worlds: the finance world that is not aware of sustainable projects and on the other side, the dredging and marine construction industry world. We need to bring the two together to realise projects. IADC is planning a 1-day conference next March at the Dubai World Expo with regard to the topic. The aim is to make clear to the outside world what the dredging industry is doing and to bring the finance and the marine infrastructure worlds together. We enjoy that we can really do something important for the industry.
- Do you have any statistics on how many companies use LNG as marine fuel?
- We can really see the switch in the industry to more sustainable fuels and of course LNG as an intermediate fuel, because it still requires carbon fuel ignition but it is a clean marine fuel. Van Oord has recently announced that it has invested in a new mega offshore installation vessel for transport and installation of next generation 20MW offshore wind farm turbines. This size and magnitude of wind turbine is not currently delivered , but they foresee in the near future that this vessel will come to the market in 2024 and it can be fueled by methanol. The industry has a drive to become more sustainable, to reduce the carbon footprint of vessels and make processes even safer.
- LNG is not the only fuel, there are other alternatives...
- We advocate for the general reduction of carbon dioxide emissions from vessels. It is the responsibility of each and every member company to reduce their emissions. Several methods are available, such as LNG and the use of Selective Catalyst Reduction and particle filters installations, as well as in the future non-fossil fuels, such as hydrogen and methanol.
LNG is an intermediate fuel. Hydrogen is also being tested, but you need a lot of it to fuel a dredging vessel. Hydrogen is only suitable for smaller vessels in local areas. The industry has long been committed to reducing emissions from fossil fuels. The EuDA (European Dredging Association) website publishes information that shows the reduction of emissions in the past. Today, new vessels are dual-fueled and can also operate on LNG.
- What are the key trends of technological development in the dredging business: digitalization, autonomous shipping, cybersecurity, etc.?
- The degree of digitalisation is increasing in the industry. At the CEDA Dredging Days this September, a presentation was given on autonomous shipping. Personally, I don't think it will happen very fast. I don’t think it is suitable for working vessels such as trailing suction hopper dredgers. There are so many factors of influence that you have to deal with during the operation process.
Cybersecurity is evidently becoming more and more challenging for the dredging industry. At a recent meeting, several cybercrime methods were presented. It is not a matter of ‘if’ but ‘when’ a dredging company will be the victim of a cybersecurity crime. We have to prepare ourselves.
- Mr. Kolman, thank you very much for the interviewand we look forward to seeing you at our congress.