UK focuses on green tech as it seeks to revive shipbuilding sector

The UK has committed more than £200mn in seed funding to support the country’s green maritime technology sector, as part of the government’s latest national shipbuilding strategy.

The aim is to fund research and development in cutting the emissions of shipping and support start-ups to help establish themselves so they can compete globally in the commercial shipbuilding market that is dominated by countries such as South Korea, Japan and China.

The funding package of £206mn reflects the UK’s focus on high-margin technology rather than trying to return to its position as a leading global commercial shipbuilder it relinquished decades ago.

“While the hull part of things is important, the systems that go into these ships are critical,” said Robert Courts, a junior transport minister with responsibility for maritime. “We’re seeking to make Britain a world leader of the systems for green shipping.”

There are a number of UK companies already building a presence in this relatively new area of marine engineering, including Silverstream Technologies.

The London-based company, established in 2010, has orders worth more than $100mn from the biggest container ship operators, Maersk and MSC, as well as from Shell and Princess Cruises for its innovative air lubrication systems. The technology produces a carpet of bubbles that flow across the hull of a ship and helps cut fuel consumption and emissions by 5 to 10 per cent.

Others include Portsmouth-based Bar Technologies and Artemis Technologies in Belfast. Both were spun off from America’s Cup teams in the past seven years to focus on adapting technology developed for yacht racing to commercial shipping, much as Formula One drives innovation for cars.

Bar is partnering with Cargill to help the US-based agribusiness bring its first large sail-assisted bulk carrier into operation by the end of the year and aims to complete 30 similar installations within two years. Artemis, meanwhile, is building hydrofoil systems that lift small ferries and workboats powered by electric drivetrains out of the water, reducing drag and increasing their range.

The funding package was announced last week as part of a revised national strategy that seeks to sustain the UK’s shipbuilding sector, which has been in long-term decline, and help yards overcome boom-and-bust cycles.

But there was disappointment that the government had not broadened the definition of the type of vessels it would procure solely from British yards beyond warships.

The strategy estimated the state would buy 150 vessels over the next 30 years. But many are expected to fall outside the UK’s traditional definition of warship, which means those orders have to be tendered internationally under WTO rules, including naval supply ships.

Ian Waddell, general secretary of Confederation of Shipbuilding and Engineering Unions, said the failure of the government to tackle the issue left the UK as an outlier in refusing to designate naval support vessels as warships to ensure they were designed, built and maintained in the country.

“It’s the one thing that is glaringly absent from the refreshed strategy,” he said, warning that contracts for these ships could go abroad.

Iain Percy, chief executive of Artemis, also called for more clarity on what support suppliers of maritime green technology would get to convert the expertise into manufacturing jobs, reflecting a similar issue in the wind power sector. The UK has become a world leader in offshore wind power over the past decade but has yet to develop an extensive domestic manufacturing base.

Percy said the company plans to build its hydrofoil systems in Northern Ireland, but needed more details on the pledge to reintroduce loan guarantees on domestic contracts and improvements to export finance terms to make UK businesses competitive internationally. He said it would be a “showstopper” for UK-based manufacturing without this support.

John Cooper, chief executive of Bar, agreed. He would like to build the company’s 45mn sails in the UK but has so far had to outsource manufacturing to Germany and China.

“We need a regeneration grant”, he said, adding that British manufacturers were edged out partly due to the cost to secure large enough dockside facilities and warehouses.

Noah Silberschmidt, founder of Silverstream, which relies on shipbuilding partners in south-east Asia and elsewhere, was less concerned. “You don’t need to have a big heavy industry to create something that actually helps a global problem,” he said.

Trade group Maritime UK has estimated that 3,100 new, high-paying jobs will be created from the government investment in green shipping tech, adding to 42,600 already employed in the sector.

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Source: Financial Times