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SAFETY4SEA

European shipbuilding sector calls for urgent support due to COVID-19 crisis

by The Editorial Team
April 2, 2020
in Shipping
al seer damen

Above image is used for illustration purposes only

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In the light of COVID-19, SEA Europe, which represents close to 100% of the European shipbuilding industry in 16 nations, calls for urgent, tailor-made sectoral support to safeguard the survival of Europe’s strategic maritime technology industry.

In a press statement issued today, SEA Europe highlighted that ”If EU fails to adopt tailored-made sectoral policies and financial measures in support of Europe’s maritime technology sector, there is a big risk for
to lose the remaining part of its strategic maritime #technology sector to Asia”

Although SEA Europe welcomes the recent horizontal initiatives from the European Commission in response to the COVID-19 outbreak, the organization further urges the European Commission to complement these initiatives with sectoral policies and financial support – tailored to the specific needs and challenges of Europe’s shipyards and maritime equipment industry. Such sectoral policies and financial support should not only enable the sector to cope with the severe consequences of the COVID-19 outbreak but also aim at safeguarding the survival of this strategic sector for Europe, SEA Europe noted.

Like other industries, Europe’s maritime technology sector has been hit very hard by the COVID-19 outbreak. But, unlike other industries, Europe’s maritime technology sector will feel the real negative consequences from the COVID-19 outbreak more acutely in the medium and long-term., SEA Europe commented

As explained, shipbuilding and maritime equipment manufacturing have been heavily impacted since they are export-oriented businesses and very much depend on global macro-economic trends, trade volumes, and market sentiments. Moreover, shipbuilding is characterized by very long lead production times, with a 2-3 years’ time laps between the ship’s contracting and delivery on average, and heavily depends on a well-functioning supply chain, as 70-80% of the ship’s value derives from the supply chain.

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SEA Europe expects that COVID-19 will particularly negatively impact those markets in which Europe’s shipyards currently are global leaders, notably the markets of complex ship types, such as ferries and cruise vessels, dredgers, advanced fishing vessels and vessels for offshore operations.

The organization also expects that Europe’s maritime equipment industry will suffer heavily from the consequences of COVID-19, with their 50% global market share.

COVID-19 implications on shipbuilding sector

If the EU fails to adopt tailored-made sectoral policies and financial measures, including state aid, in support of Europe’s maritime technology sector, there is a big risk for Europe to lose the remaining part of its strategic maritime technology sector to Asia, SEA Europe said, highlighting that the following devastating effects are therefore expected for Europe:

– More than 1 million jobs in maritime technology companies would be lost.

– About €120 billion of added value, created by the maritime technology sector, would be lost.

– Europe would lose its innovation and technological global leadership in complex ship types (e.g. offshore, dredging, and cruise ships).

– Without its own shipyards, Europe will become entirely dependent on foreign (mainly Asian) countries for the building, repair, retrofitting, maintenance and conversion of civilian ships and on foreign ships for access to seas, transport for goods and passengers and Blue economy activities. A loss of shipyards in Europe will also lead to serious losses in Europe’s supply chain.

– Without shipyards in Europe, the business of Europe’s maritime equipment companies will become entirely dependent on foreign (mainly Asian) markets, where already today they face more business obstacles and trade protectionism.

-Without its own shipyards and maritime equipment companies, Europe will be entirely dependent on foreign (mainly Asian) nations for realizing its Green Deal targets, aiming at transforming waterborne transport into a climate-neutral mode of transport, or for implementing its Blue economy activities, e.g. offshore renewable energy or aquaculture.

 

European shipbuilding sector calls for urgent support due to COVID-19 crisisEuropean shipbuilding sector calls for urgent support due to COVID-19 crisis
European shipbuilding sector calls for urgent support due to COVID-19 crisisEuropean shipbuilding sector calls for urgent support due to COVID-19 crisis
Tags: COVID-19EUshipbuilding
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