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LeaderSHIP 2020 RDI Working Group Research, Development and Innovation 7th of September 2012 Drafted by: Sub Group I: Identify new market opportunities and competitiveness threads – P. Marchal Sub Group II: Reinforce efforts on identified opportunities and threads – D. Cunningham Sub Group III: Adapt RDI environment – V. Kissler Working Group Structure / Sub Group Participants and Schedule It was agreed at the inaugural working group of RDI meeting on the 24 th of May that in order to make the process of collecting information, etc. easier three subgroups should be created. These three subgroups follow the structure of the mandate and each took a heading in order to break the topics down and prioritise their findings which will feed back into the collective report to be drafted by the WG in time for the next LS2020 Coordination Group meeting in October 2012. The schedule (online meetings) and participation of the Subgroups can be seen below: WG Chairman: Stelios Kyriacou WG Rapporteur: Luciano Manzon Sub-Group Participants: B1 Identify new market opportunities and competitiveness threads B2 Reinforce RDI efforts on identified opportunities and threads B3 Adapt Environment of Work Led by: Pierre Marchal Led by: Douwe Cunningham Led by: Vera Kissler Joachim Balke Lanfranco Benedetti Igor Blanco Alfonso Carneros Douwe Cunningham Anne-Bénédicte Genachte Bill Hemmings Vincente Iza Holger Jefferies Stelios Kyriacou Paolo Lotti Reinhard Lüken Luciano Manzon Eva Novoa Mischa Terzyk Teus van Beek Peter van Terwisga Lanfranco Benedetti Igor Blanco Sebastiaan Bleuanus Alfonso Carneros Ignacio Gómez Vera Patrice Gouret Paul Greaves Paolo Guglia Stelios Kyriacou Willem Laros Paolo Lotti Reinhard Lüken Luciano Manzon Eva Novoa Pierre Marchal Thomas Witolla Jean-Pierre Lentz Lanfranco Benedetti Douwe Cunningham Ignacio Gómez Vera Stelios Kyriacou Paolo Lotti Reinhard Lüken Wolfgang Munch Andrea Pauer Henk Prins Luciano Manzon Lucio Sabbadini Teus van Beek Peter van Terwisga 8 June, 15h00 15 June, 10h00 25 June, 15h00 8 June ,10h00 18 June, 14h00 29 June, 14h00 7 June 16h00 14 June, 15h00 28 June, 14h00 2 Working Group Mandate The European industry should focus on maintaining and extending its competitiveness in segments where it is strongest, and try to grasp the benefits of new market trends (reduction of fuel consumption, greening, new types of ships…) and opportunities (offshore wind ocean, deep sea mining, arctic…). In order to support this strategy with adequate research and innovation investments, the following issues could be considered: 1. Identify new market opportunities and competitiveness threads: Opportunities offered by new markets e.g. offshore wind energy should be analysed in detail and the related RDI needs identified The technological endowment of the European industry allows it to put on the market greener ships than many of its competitors The demand for such vessels is, however, still comparatively low on the global scene. The possibility to support the growth of the demand for greener ships and the exploitation of new markets through demand-led policies (regulation, standards, financial incentives, public and private procurement…) should be evaluated in close cooperation with the other working groups and the opportunities for green growth identified. Competitiveness issues requiring further research and innovation investments (design and production process efficiency, lead-time reduction…) should also be identified. 2. Reinforce RDI efforts on identified opportunities and threads: The Waterborne Technology Platform has been set-up to identify the research needs of the sector. It has defined its Strategic Research Agenda priorities aiming at developing safe, sustainable and efficient waterborne operations and supporting the competitiveness of the maritime industry at large. Starting from that basis, to maximise outcome of research investments it would be necessary to: Concentrate on large scale projects taking into account the opportunities and threads identifies; identify ways to support the development of breakthrough technologies and new maritime technology concepts; Create possibilities to speed up demonstration and the up-take of new technologies and products (like for instance alternative fuels and energy sources, emission control equipment), including the definition of large scale demonstration projects; Promote the wider application of Key Enabling Technologies and other innovative technologies to marine technologies; Identify ways to use more efficiently RDI resources existing at EU, national and regional levels beyond already existing instruments (ERA-net, etc.) 3. Adapt environment of work: Attention should also be paid to the research and innovation framework, improving where necessary research infrastructures and further developing regional clusters and a European network of them (cluster of clusters). These inputs should contribute shaping the priorities on the future Horizon 2020 programme in the waterborne transport area. 3 Background This mandate was dealt with against the background of LeaderSHIP 2015. Improving research, development and innovation was a key pillar of the LeaderSHIP 2012 initiative. The competitive advantage of Europe will continue to be based upon its ability to construct the most advanced maritime products. This can only be realised by the successful, continued development and application of innovation and research. Two main recommendations were proposed in Leadership 2015: The aim to create a Waterborne Technology Platform The Waterborne Technology Platform (TP) was launched bringing together all the strands of the maritime industries. It has been able to define a Strategic Research Agenda prioritising the needs of the sector, aiming to develop safe, sustainable and efficient waterborne operations. Given the changes in the market in recent years, the Waterborne TP has been conducting a revision process of its strategic documents to ensure that the priorities reflect the current status quo of the industry. This also comes at a time when the European Commission is defining the future strategic research framework - Horizon 2020. New definitions regarding innovation aid, need to be developed LeaderSHIP ha stimulated the targeting of legitimate support to innovation by making the EU’s rules responsive to the needs of the sector. Updated provisions on innovation aid to shipbuilders have been in force since January 2004. Innovation aid may be granted for the industrial application of innovative products and processes. Since the crisis starting in 2008 there now needs to be constructive co-operation between industry and the Commission on the elaboration of applicable rules and assess the effectiveness of the state aid for innovation to 2020 and beyond. The new mandate for the working group of Research, Development and Innovation gives direction to the development of a new LeaderSHIP agenda but also provides a good basis for assessing the effectiveness of the LeaderSHIP 2015 recommendations since the 2007 progress report. 4 Identify New Market Opportunities and Competitiveness Threads Identification of new market opportunities and competitiveness threads a. Existing markets of economic importance to the European maritime industry It is clear that the European maritime industry is currently considered to be a significant actor in a number of niche markets allowing for its current competitiveness: Passenger Ships RoPax Research Vessels Yachts Cruise Ships (seagoing and river) Dredgers Offshore Vessels and Structures Transversal Equipment Other Complex Special Vessels It goes without saying that the European industry places absolute importance on safety. In all activities relating to RDI emphasis on the safety is one of the fundamental cornerstones of all new research and innovations. b. Economic and societal trends impacting the state of the maritime industry Five major trends can be identified which impact the state of the maritime industry. i. Current economic outlook Global economic troubles are continuing to suppress shipbuilding orders and it is not solving the problem of production capacity and overcapacity within the global fleet. ii. Societal expectations Societal expectations, with regard to the environmental impact of human activity, safety, etc. have spawned the drive for new regulations being placed on the maritime industry. iii. Increasing price of fuel In recent years there has been a dramatic increase in the price of fuel while the cheap heavy fuel with a large sulphur content will be progressively replaced in the coastal sailing areas by sulphur free fuel or LNG, with cost implications. Looking at the current trends the price of fuel will act as a break to the overall competitiveness of the sector. iv. Security in terms of threat. In recent years there has been a need to guarantee security of vessels, seafarers and supply routes. There has been a steady increase of piracy related activities which threaten global trade routes and the wellbeing of ships passing through them. 5 v. New frontiers There is a growing awareness of the vast potential that the sea has to offer which can translate into new growth opportunities. Marine renewable energies and raw materials are prominent examples for this trend. Given these major trends RDI should be supported, by industry as well as by policymakers, in order to address these threads. There are opportunities to be grasped and the competitiveness of the industry can be invigorated if it can do so. In most cases technology already exists to meet the expectations. A push has to be made to ensure an uptake of these products overcoming the ‘valley of death’ within the innovation chain. c. Barriers to competitiveness and promotion of new market opportunities Several barriers to competitiveness and development of new markets have been identified: i. ii. iii. iv. v. Lack of financing Lack of ‘global’/’European level playing field Slow reaction time and ‘missed opportunities’ Reluctance to take risks …(others) The barriers have a direct impact on the motivation for undertaking RDI and the promotion of latest innovations which impedes the ability for new products to mature effectively and thereby growing the market segments. Whilst solutions to some of these barriers could be addressed within the scope of this working group, close discussion has to be undertaken with the WG for competitiveness and finance in order to formulate recommendations for others. d. Emerging markets Referring back to the mandate, opportunities offered by new / emerging markets should be analysed and related RDI needs identified. An analysis of the markets of most importance to the European maritime industries has been carried out and the following parameters were set in order to collect the data to try and map out the priorities: Market areas Sub topics Timescale of development (Existing, short term, long term) Market description and challenges Challenges of innovation 6 Given the diverse nature of the European maritime industry and complexity in business focus between the different stakeholders it is difficult to rank markets in terms of most important to least important. Therefore prioritisation to R&D could be given to markets which have a longer term development outlook. 7 AREAS Topics ST/LT/EX Market description and Challenges Specialized vessels: AHTS Support vessels and crew boats Floating structures and FPSO Offshore oil and gas Oil or gas shuttle tankers Oil spill recovery system or vessel AHTS fleet aging, capacity demand increasing, notably for ships with larger bhp and high specs aimed at HSE, such as DP3. Markets promising as long as oil prices stay high. Operationally, North Sea market to remain stable and slowly starts decreasing, deep water markets in Africa, Americas, Asia, Arctic, to increase significantly. Smaller size vessels, note building up of (over?)capacity in especially PSV fleet. Markets highly competitive, speculative orders and building exist Several hundred crew and support boats mainly electric or hybrid, locally built with possible EU equipment Design is able to be reused for the offshore wind industry Mostly an Asian affair in terms of shipbuilding (also conversions). Often (multi) billion dollar projects. Some (large) European owners, e.g. Shell, BG, BP, SBM Offshore, Exmar, others are Petrobras, MODEC, CNOOC. (Drilling) equipment mostly supplied by European and American parties. Ex These types of ship are built in the Far East – no European market ST Post Macondo incident this is of increasing importance to have at site. Further innovations and increased efficiency badly needed, no leading technology has yet emerged. Northern-European (notably Scandinavian) and Russian shipbuilders and owners have leading ice class experience, but modern markets work so that ice breaking ships can be built anywhere – often on the basis of European designs. Polar code under development at IMO deserves EU attention. Ex Ex Ex Polar conditions adaptation ST Operation in very deep water LT Oil and mining activities need to be exploited in very deep water. The equipment needs to be powerful free of maintenance. A complete industry for install, repair, protect and safe the installation and the environment has to be developed. Europe has a strong experience in this field with a large potentiality Challenges of Innovation Extra Flexibility Fuel efficiency Cargo transfer equipment Working in realistic sea states DP in ice-going conditions New materials for deep sea autonomous systems New ROV to be developed with increased control precision and more power capability. AREAS Topics ST/LT/EX Market description and Challenges Challenges of Innovation Offshore Drilling Technology Arctic Vessels Foundations or cable laying systems Special vessels for erection LT The need for finding and exploiting new sources of raw materials leads to the exploitation of resources in difficult places ST Search for new fields of valuable raw materials HFO restrictions Additional safety / environmental requirements arising from the polar code including for non-ice class ships operating in polar waters Experienced (western) offshore and dredging companies are tech leaders, but technology maturing in Asia. Building of these vessels anywhere. So far, and also for the future, a small market dominated by European innovations but increasingly threatened by Asian competition when it comes to shipbuilding. OFWC under discussion at IMO, clear European interests. Increasingly specialised vessels. Jack up designs still to dominate Some evidence of strategic investment by developers to secure vessels Supply chain strong up to 2015. Through the latter half of the decade, pressure might return if we do not have new investments. Some units are under construction, others are just entering into service. Performance will be monitored on the basis for further investment decision. ST ST Offshore wind energy Foundations ST Major opportunities for domestic manufacturing due to low technical barriers for entry, for example by sing shipyards or tower manufacturers High elasticity of supply, lowering bottleneck risk. They present an attractive diversification opportunity for substantial marine oil and gas capacity in Europe. Move into deeper water: increased market share from space-frame structures as well as novel fixed and floating structures further into the future. Development of totally new autonomous underwater systems providing multi-role functions New drilling systems for deep sea locations. New class of offshore vessels New hull forms Development of ice resistant technologies New safety and rescue appliances for arctic conditions Technology capable of working in deeper water. More efficient manner of working offshore: larger decks, efficient component handling systems Development of deep water methodologies which make use of floating vessels for sties beyond the operational limits of jack-up vessels. Streamlining of installation process Large crane capacities Capacity of handling different foundation types More lift capacity Underwater noise reduction (ramming) 9 AREAS Topics ST/LT/EX Market description and Challenges Service, maintenance vessels ST Special vessels for erection Energies from the Sea (Waves, current, tides, thermal) ST Special vessels for service, and maintenance ST Underwater remote control system or autonomous vehicles ST Extraction, transport and logistics 40GW offshore installed by 2020 – meaning between 25,000 and 30.000 turbines to be installed with similar number of substructures to manufacture and install. Smaller size vessels, focus on HSE. Many smaller players involved in shipbuilding, building to customer specs (but also educating the customer with respect to sea behavior). OWFSV under discussion at IMO, clear European interests. EC directive needs to be adapted. According to present estimates, a market with large potential (CAN THIS BE QUANTIFIED???) Today, and also for the future, a small market dominated by European innovations but increasingly threatened by Asian competition when it comes to shipbuilding. Smaller size vessels. Not many players building this type yet. Building to customer specs (but also educating the customer with respect to sea behavior). n/a Some pioneers (relying heavily on innovative shipbuilders and ship owners) and some experienced offshore / dredging companies eyeing this market, but so far industry in infancy. Promising, but environmental concerns and technological challenges key issues. ST Challenges of Innovation Adaption of safety regulations Regulatory certainty, IMO, etc. Innovations needed, focusing at HSE and costs. Innovations needed, focusing at HSE and costs. Shallow water installations could perhaps do without ships, serviced by divers or (semi) autonomous vehicles / robots. 10 AREAS Topics ST/LT/EX Market description and Challenges Situ exploration technologies and systems ST New Prototypes designed and built by shipyards ST Methanehydrates Ocean mining Specialized open oceans platforms, Situ exploration technologies and systems LT LT Methane hydrates are the largest resource of hydrocarbons in the crust of the planet There is currently no process devised to economically harvest this vast resource Large vessels for exploration and exploitation of mining with new technologies for the exploration and exploitation of raw materials Development of devices for marine renewable energies. Avoiding methane slip A method to extract natural gas from solid hydrates without making the process to cost inefficient. New systems for subsea process. New ships and systems for operation in deep water. Controlled work ensuring minimal impact on the sea bed. Improved concept that can be offered to an international market, creating new business opportunities. Ships for the transport of live fish. Innovative equipment to improve product quality, floating offshore aquaculture tanks. Aquaculture + Fisheries Some pioneers (relying heavily on innovative shipbuilders and ship owners) ànd some experienced offshore / dredging companies eyeing this market, but so far industry in infancy. Promising, but environmental concerns and technological challenges key issues (Future) access to rare earths/ minerals, fossils, etc. increasingly of national importance, also for EU – in that sense a critical field of R&D. Concerning currents and tidal devices, there are some current devices from 10kW to 100kW in testing Drivers of this market would be to meet the objectives of renewable energy policy in Europe Challenges of Innovation Low cost mariculture plants, systems and service vessels Ex Productive, sustainable and Ex Value of production equal to that of fisheries, stagnation due to space limits and low innovation levels. The demand for auality and sustainable fish consumption. New EU aquaculture strategy (including funding under the furutre EMFF). Growing demand for fish combined with declining catches of wild fish. Fishing quota policy make overcapacity in many ship types evident. Current fleet in many cases overpowered and using fishing techniques in need Substantial improvement of fishing vessels needed, to be more selective, 11 AREAS Topics ST/LT/EX Market description and Challenges safe fishing vessels Specialized factories and support vessels Ex Cargo Vessels Cargo for Inland, Short Sea and Ocean going (from small cargo to post-panamax ships) Ex of revision with an eye on environmental aspects. Financing of new builds / new equipment a bottleneck for ship owners fishing on common species which are not (so) profitable. Central EU (financial) institutions could help here. The continuous increase on demand for fish consumption and declining catches High fuel prices – transition to more sustainable fishing EU countries amongst largest owners of large factory vessels, Asian competition growing. Fleets are active across the globe, in principle abundant fleet capacity, fishing (quota) licenses vital for fishing companies. No major fleet expansions foreseen for European fishers, fleet growth centred on Asia and S-Americas. Many cargo ship types increasingly larger in size, ULCC and post-panamax most striking examples. This development puts smaller size vessels under some pressure, as transshipment starts to take place using larger vessels or as cargo is being shifted to rail or road. Within Europe (and N-America), ECA’s put pressure on owners to ‘green their act’, but due to low margins many ship owners do not have funds for fleet renewal. Road transport sector leading over maritime in terms of development of cleaner engines (also as truck fleet replacement much shorter time cycle than ships), shipping needs to innovate to stay at forefront in terms of footprint / emissions per ton-kilometer. The size of ships in short routes are changing due to the cascade effect created but the ULCC Market strongly impaired by current crisis Challenges of Innovation energy efficient and safe. Ships and systems needed to support sustainable fisheries. Development of factory ships needed to maintain a high level of product quality Role for EU institutions could be to monitor world fleet development and initiate and support rationalisations and ‘greening’ of fleets? Much technology in Europe available, but funding (uptake) an issue Emphasis on Sox and NOx regulations 12 AREAS Topics ST/LT/EX Market description and Challenges Product Tankers LNG Tankers / Short Sea Shuttle Tanker Ex Chemical tankers Ro Pax Large Ferries Ex Ex Ex Challenges of Innovation Large size LNG tanker market dominated by Korea, China upcoming. After a couple of years in which ordering virtually disappeared (building up of ship overcapacity as a result of speculative ordering), recently (especially post-Fukushima and with development of shale gas) larger size vessels more in demand. For European companies, the small size LNG tanker market can be a viable niche, especially as the LNG supply chain in Europe / N-America is being established. Gas containment technology used to be a western dominated market, but Korea has its own system and also would like to buy France’s GTT. Preservation of LNG knowledge base (newbuild and repair) vital for Europe. Stable market with only a dozen ships ordered and delivered each year, More stringent safety and emissions standards needed to overhaul the large ferry market. Passenger vessels Cruise liners Ex Super-yachts Ex Markets so far dominated by European shipbuilders (Germany, France, Italy, Finland). Deliveries historically and projected to be around 8-10 ships per year. Korea’s STX owns big yards in France and Finland, but orders lacking. Both Japanese and Chinese will build cruise vessels the next couple of years, Japan will build two ships for German owner AIDA and China a couple for national cruise companies. China also has a cruise ship on the cards for an Australian customer (Titanic rebuild for Clive Palmer). Cruise ship companies, facing saturation in US and some EU markets (notably UK), focus growth strategies predominantly on Asian markets, ships might need adaptation to (cultural) preferences of these new customers. Fleet approx. 4,400 vessels (>25m), Russian, European, Middle Eastern, Improved design safety Harmonization of safety rules globally Increase accessibility of passenger vessels for disabled travelers Increase ship sizes and passenger capacity // assessment of risks. Innovative technologies could be better integrated onboard these vessels by including the suppliers in the design process of such vessels. 13 AREAS Topics ST/LT/EX (Inland and Seagoing) Market description and Challenges Leisure crafts above 24m Complex Special Dredgers, Workboats, Tugs, Research vessels, Offshore service Vessels, Cable and Pipe-laying systems… Ex Retrofitting / Ship Repair Yards/Equipment Australian and American owners dominate. Deliveries per year approx. 400. Super yacht market caters to the world’s high net worth individuals, spending on new yachts since crisis much reduced but leading quality builders AND cost fighters do continue to receive orders. Operationally, cost control and (part) standardization vital for yards. Consolidation in terms of ownership of shipyards, with European yards bought out by Middle-East or Asian companies. Growth must come more and more from new client markets such as Asia (notably China) or South-America. Ultimately, localising the yachts to specific cultural tastes and cleaning up the ship’s environmental performance (lightweight materials, lower fuel consumption, etc.) may become key issues for the future. See above Ex Challenges of Innovation ST Research vessels and scientific systems capable of operating safely and effectively unrestricted worldwide and in heavy weather conditions Skills set of workers will need refocusing on these areas. Developing eco-innovative tools and processes with a neutral environmental impact To consider the environmental impact throughout the ship’s life cycle // Coordination holistic retrofit solutions With projected continuous growth in world trade, global communications and industrial infrastructure, the market for these vessels offers considerable potential for new demand. Replacement demand also ensured, as ships in all fleets mentioned (except for offshore service vessels) are, on average, generally of a high age. New ships often required to be versatile (combining various functions), comfortable for crew, standardized (saving costs). Low complexity repairs shifted much to low wage areas, western yards increasingly rely on complex conversions / retrofits. Retrofit markets could become very valuable, as new equipment required by IMO and other regulators (e.g. BWTS, scrubbers) will in the next decade need to be retrofitted to many ships. Increasing international competition, ongoing consolidation. 14 AREAS Topics ST/LT/EX Market description and Challenges Challenges of Innovation (e.g. BWT, Scrubber, LNG SCR) Scrubbing or gas emission treatment Ex Electric ship concept adaptation St Equipment New diesel or turbine engines adapted to various fuels Ex Incentives for ship-owners to retrofit vessels with scrubbers and to see a real return on investment. Application of the supra-conductivity or permanent magnets technology. Development of intelligent and modular electronic converters. Novel power architectures according to the ship types and its sailing profile Development of hybrid solutions LNG Fuel Adaptation Given the EU legislation an EU market for this technology is already in existence Technology is also already there and requires market uptake by ship-owners to install the products onto vessels Innovation in this field concerns the electric rotating machinery (motors or generators) and the associated electric converters. The acceptance of electric concepts will create a real green and environmentally friendly vessel The main market drivers are the overall size and weight reduction of the total electric chain, the increase of the overall efficiency increase combined with acceptable acquisition costs. The alternative to a green and environmentally friendly ship design to complement efficient power generation supplied by LNG Possible integration on board of medium size vessels. Will probably continue to equip all the vessels for supplying the essential part of the energy onboard. This equipment needs to be adapted to the various fuels which could be available in the near future. (LNG, Biofuel, etc.) Market drivers could be fuel efficiency standards Gas emission regulations (NOx) Future GHG emission regulations Potential future PM/BC emission limits. ST LNG-driven vessels is likely to be a potential market for both retro-fit and new building Test cases will be mainly operating in ECAs or influenced by local markets. Availability of LNG infrastructure (bunker, etc.) and pricing will be a decisive Reduced emission and energy consumption More integral design so the overall system works better Smart solutions for optimum use during service life Increased efficiency by optimum energy management and awareness Sensors and new computing tools as well as continuous emissions monitoring equipment in combination with good system integration for a better overall performance. Design challenge to match LNG concept with minimum impact on vessel operations. 15 AREAS Topics ST/LT/EX Market description and Challenges Energy Storage Ex Patrol Vessels Ex Integration of Unmanned vehicles ST driver. Potential NOx and Sox regulations The key factor for the success of the mixture of various energy production devices on ships (the so called HYBRID systems) rely on effective storage capabilities Reduced cost of equipment and storage efficiency will be a driver to boost this market. Development of greener coast guard vessels Vessels capable of modular mission packages covering illegal traffic control, disaster relief to oil spill recovery. Vessels which can easily be adapted by the requirements of the client Challenges of Innovation Ensuring minimal energy leakage from storage devices. Able to incorporate modular mission package for supporting diverse roles with an optimized efficiency of the energy consumption and minimum emissions Containerization of the offered solution integrating the control / communication systems and the unmanned vehicle for being easily deployed on different vessels. Deployment and recovery systems of the unmanned vehicle in the mother ship. Invention of new ship equipment for saving the ship integrity or limiting the pollution risk in case of accident. Invention of new systems assuring the crew and passengers safety in case of accidents Adaptation of more complex selfprotecting systems used onboard naval vessels for a civilian application. Unmanned vehicles (surface/air) are being developed for over the horizon detection and/or self-protection. The integration of such vehicles on civilian ships could be used for detecting fisheries or other type of resources as a substitute of incorporating manned helicopters. It’s essential to prepare the maritime industry to take in consideration the consequences of the accidents occurred during sailing and to pre-equip the ships for cancelling or limiting these consequences in term of human safety and environmental impacts. Development of an integrated system composed by sensors (mainly EO / IR) and non-lethal weapons that can be installed on civilian vessel as a measure of protection against piracy attacks. Protection needs for vessels operating in danger areas. Security Passive safety concept ST Anti-Piracy Integrated Systems ST 16 Prioritisation of RDI in emerging markets Short Term It is clear from the market segments above that in many areas there are products already existing and/or niches which although Europe may currently be a leader will have to overcome the challenge of defending this position. In order to focus the RDI efforts in this context the following emerging markets should be exploited in the short term where innovation needs to take place in order to ensure market-uptake of research. Market Offshore oil and gas Topics Oil spill recovery systems Polar condition adaptation Arctic vessels Foundation or cable laying systems Challenges of Innovation Erection vessels Foundations Service maintenance vessels Offshore wind energy Energies from the sea Extraction, transport and logistics systems Situ exploration technologies and systems New prototypes Yards / equipment Retrofitting, ship repair and maintenance Electric ship adaptation LNG Fuel adaptation Transversal equipment Working in realistic sea states DP in ice-going conditions New hull forms Development of ice resistant technologies New safety and rescue appliances for arctic conditions Technology capable of working in deeper water. More efficient manner of working offshore: larger decks, efficient component handling systems Development of deep water methodologies which make use of floating vessels for sties beyond the operational limits of jack-up vessels. Large crane capacities. Capacity of handling different foundation types Underwater noise reduction Shallow water installations Development of devices for marine renewable energies. Equipment for extraction of rare earth minerals from the sea Adaptation of skill sets. Developing eco-innovative tools and processes with a neutral environmental impact Holistic retrofitting solutions Application of new machine design concept including the use of the supraconductivity or permanent magnets technologies. Development of intelligent and modular electronic converters. Novel power architectures according to the ship types and its sailing profile Development of hybrid solutions Design challenge to match LNG concept with minimum impact on vessel operations. Integration of unmanned vehicles Anti-Piracy integrated systems Passive safety concept Development of the energy recovery overall architectures mixing all types of energy sources, electric, thermal or mechanic, in accordance with the needs of potential consumers on board Containerization of the offered solution integrating the control / communication systems and the unmanned vehicle for being easily deployed on different vessels. Deployment and recovery systems of the unmanned vehicle in the mother ship. Adaptation of more complex selfprotecting systems used on board naval vessels for a civilian application. Development of pre-equipped solutions for limiting the human risks and the environmental impacts after accidents. Security Given a necessary push in innovation within these markets, considerable results could be seen in the short term given the fact that extensive R&D is already being undertaken in these fields to date. Long Term RDI is not just about meeting the needs for tomorrow but should also look to the future. Several market areas are considered important by the European maritime sector which has a longer term development scale. Market Topics Challenges of Innovation Operation in very deep water Methane hydrates are the largest resource of hydrocarbons in the crust of the planet There is currently no process devised to economically harvest this vast resource Technologies for exploration and exploitation of mining with new technologies for the exploration and exploitation of raw materials Offshore oil and gas Methane hydrates Ocean Mining New materials and technology to withstand and operate in very deep water Avoiding methane slip A method to extract natural gas from solid hydrates without making the process to cost inefficient. New systems for subsea process. New ships and systems for operation in deep water. Controlled work ensuring minimal impact on the sea bed. Recommendations It becomes apparent through the analysis of the markets, topic and challenges to innovation that there are three primary drivers of RDI within the ‘already existing’, ‘short term’ and ‘long term’ timescale categories: 18 i. Eco-Efficiency (Existing, Short Term, Long Term) (Further expansion could be envisaged) ii. Safety (Existing, Short Term, Long Term) iii. New Frontiers (Short Term, Long Term) It would be prudent when identifying the RDI priorities of the European maritime technology industry that given the diversification of the sector no individual ‘market’ is ranked. Instead, the ‘primary’ drivers should be seen as the prioritisation of the RDI efforts in the coming years. 19 Reinforce Efforts on Identified Opportunities and Threads Technology prioritisation Taking into account the identified priorities from the opportunities and competitiveness threads, technologies and research areas identified by the Waterborne Technology Platform could be mapped against these. It is clear from input from the industry that five categories can be identified for which focus for further research, development and innovation can fall under. The headings of the five categories are: 1. New Materials 2. Fuels 3. Information technology 4. Hull / water / structure interaction 5. Energy management It has to be remembered that these five business areas, given the necessary focus through RDI will help improve the overall competitiveness of the European maritime technology manufacturers, thereby meeting the LeaderSHIP 2020 objectives, through the priorities identified in subchapter I. Competitiveness Eco-Efficiency Safety New Frontiers Research, Development & Innovation The table on page 19 attempts to map RDI topics against the five focused categories outlined previously. 20 Technology prioritisation (initial attempt) New Materials Innovative materials and systems Design and materials for enhanced wind farm survivability Advanced ship structures and platforms for ice operations Mining extraction systems Robust lightweight and offshore structures New approaches for load assessment and survivability Safe structures in shallow water Bio-fouling on ship hulls Adapted construction techniques using new materials Fuels Marine fuel cell development Fuel supply and multi fuel system Bio-fuel cells Bio-fuel cells from algae LNG adaptation LNG infrastructure development IT Smart systems integration E-maritime Ship / Shore system integration Site control and automation systems Autonomous ship concept. Autonomous robots sensors and systems Navigation, dynamic positioning and communication of UW deep sea vehicles Improved processes for ice prediction and route optimisation Decision support systems H/W/S Interaction Improved propulsive efficiency Novel hull forms Advanced foundations for offshore wind farms Adapted offshore mooring systems Advanced cable and pipe laying technologies Noise propagation Underwater noise monitoring Monitoring the effects of wash Energy Man. Next generation power and propulsion concepts Eco-ship systems Prototypes of new low energy consuming technologies Specialised low cost open ocean platforms Economic lifecycle strategies Zero emission ship concept Ultra low emission technology (C02, SOx, Nox, PMs) Energy management systems Comprehensive waste heat recovery systems Advance hybrid mechanicalelectric and full-electric power systems including utilisation energy storage and real time energy optimisation NB: This is by no means a complete or exhaustive list. These priorities have been taken from the Waterborne strategic documents and the inputs received from subgroup II of the WG RDI. Mapping the technological priorities with the market RDI drivers Eco Efficiency Safety H/W/S Interaction IT Energy management H/W/S Interaction IT Energy management IT H/W/S Interaction New materials IT New materials H/W/S Interaction New materials Energy management H/W/S Interaction Fuels IT New materials H/W/S Interaction Food Energy management Fuels IT New materials Infrastructure Renewables Offshore Transport New Frontiers New materials H/W/S Interaction IT New materials IT Energy management H/W/Interaction New materials Energy management H/W/S Interaction Fuels It Energy management IT Fuels This table shows how the three market drivers identified by sub chapter I is directly related to the categorisation of RDI technologies and the main business areas which the European industry is focussed on. Through optimisation of the RDI efforts and focus on the areas identified above there will be a direct impact on the competitiveness of the sector. To maintain momentum for RDI and investment for tomorrow during this very difficult economic time will require a careful mix of instruments made up by industry with careful input and guidance of regulation and policy initiatives. Proposed instruments Public Private Partnership The European maritime industry sees the merit of pursuing a public private partnership (PPP). Taking into account the criteria foreseen under Article 19.3 of the proposal for a regulation establishing Horizon 2020 [COM (2011)809], the objectives of developing a successful industry strategy for 2020 > and the nature of R&D development within the sector this instrument would be very apt. The PPP should demonstrate: • Added value of action at Union level • The scale of impact on industrial competitiveness, job creation, sustainable growth and socio economic issues, including societal challenges • The long term commitment from all partners based on a shared vision and clearly defined objectives • The scale of the resources involved and the ability to leverage additional investments in research and innovation It is within this framework that it is proposed that the European maritime technology industry develops a comprehensive roadmap to the commission outlining how it would meet these criteria. The PPP should target research and meet the goals as set out in the EU’s white paper on Transport [COM (2011) 144) and other flagship initiatives such as the Innovation Union [SEC (2010) 1161]: The EU CO2 emissions from maritime transport should be cut by 40% (if feasible 50%) by 2050 compared to 2005 levels. Proactively address passenger ship safety needs Promote core networks: motorways of the sea Enhance maritime security and surveillance The PPP will also address the goals of ‘Resource-Efficient Europe’, which seeks to promote new technologies to modernise and decarbonise the transport sector thereby contributing to increase competitiveness. One aim of the flagship initiative is hence to promote the deployment of ‘green’ technologies by promoting research, and developing the infrastructure needed to support the ‘shift towards a resource efficient and low carbon economy that is efficient in the way it uses all resources’. Keeping these initiatives in mind and addressing an PPP to meet their goals as well as bearing in mind the priorities of the sector will give not only an added value at European level but also strengthen the competitiveness and position of the industry. It could be envisaged that an PPP tackles two strands of the three priorities identified by subchapter I. A Zero Emission Ship (Eco Efficiency) A Zero Accident Ship (Safety) Within this focus a series of ambitious objectives could be set setting out a step change in the way that the industry conducts its business. The outcome of such a PPP will push the boundaries in the way of thinking of the sector, guarantee jobs and maintain skills and give the European maritime industries an added global competitive edge. The objectives that the industry could realistically work towards and aim to go beyond are: Reduction of XX% CO2 emissions Reduction of XX% of SOx an Nox emissions Reduction of XX% solid waste emissions Reduction of 15% noise emitted in water Reduction of XX% invading species Reduction of XX% energy use Reduction of XX% of overall maritime accidents XX% Energy Efficiency gains An PPP would best serve the industry if the whole waterborne community was onboard to support the proposed projects and demonstrators. Full support of the strategic priorities and goals of the PPP for waterborne RDI would ensure adequate emphasis was placed on the sector under the new EU framework of Horizon 2020. 23 Demonstration Lacking practical experiences and reference applications are often a reason for reluctance and limited uptake of already existing innovations by the market. This is also highlighted in the table on page 7 which clearly indicates that for many of the identified markets there is already research being undertaken or results already existing. Demonstrators can help to overcome the problem of slow market-uptake, but they can also contribute to assess the impact of radically new technologies and to derive information and data for political decisions and international rule and legislation development. In addition, it should be considered that the demonstration of new technologies, such as alternative energy sources and fuels, require a corresponding infrastructure, which cannot be financed by individual industry partners. Demonstrators of new technologies can be connected to public procurement, European inland waterway and short sea transport could be ideal cases for such demonstrators, as they are less dependent of global markets and legislation. Demonstrators should prove the immediate applicability of new technologies already in existence and highlight to the customer that it is worth taking a risk in product investment. These demonstrators have to correspond to the priorities identified in the previous chapter. To a smaller scale it could be envisaged that demonstrators could focus on the first instance on the priority: Eco Efficiency and then to go one step down and take for example the heading: Energy Management – if then mapped against the business area of transport a series of demonstrators could funded: Eco Efficiency / Energy Management: a. Demonstrator for energy management, consisting of primary source, prime energy converter and usage of currently wasted energy. b. Demonstrator for energy saving (improvement of insulation). c. Comprehensive waste heat recovery systems d. Advance hybrid mechanical-electric and full-electric power systems including utilisation energy storage and real time energy optimisation. The results of these demonstrator activities could then be fed into a Metademonstrator which would meet not only the goals of Eco-Efficiency but also demonstrate an integrated system which could then be taken up by shipbuilders / ship-owners in new-build projects. Demonstrators could also be envisaged for the following topics: The greening of vessels, efficiency and competitiveness. Given the correct framework for 24 demonstration topics could be further developed through the strategic documents of the Waterborne technology platform and coordinated with a possible PPP. Innovation Aid Innovation aid has clearly contributed to improving the efficiency and competitiveness of the EU shipbuilding industry. It has facilitated the introduction and dissemination of new production methods, technologies and products and it has stimulated research and development. Therefore, it could be considered that the present "innovation aid" concept as the right tool for reaching the objectives of LS2020 and not to integrate the maritime industries into a horizontal instrument. The shipbuilding market is generally rather conservative. Ships as investment goods have a long life span and the majority of customers prefer proven technology rather than taking risks with innovative solutions. In fact, a number of factors in the shipping markets such as current chartering practises and standards establish additional discouragement to employ innovative solutions. Higher safety margins or higher fuel efficiency will e.g. not necessarily yield higher charter rates. In this respect, shipping markets often fail in utilising technological progress despite clear economic benefits. This market failure leads to some extent to an underperformance in terms of quality and sustainability of operation. Due to their global position European manufacturers need to offer better products to be successful in a market. While RDI activities are a necessity to this end, they can only be conducted if the market is prepared to accept the related or perceived risks. It must be underlined that the risk exposure related to the production of prototype ships is substantial. Contrary to most other sectors, sales contracts in shipbuilding stipulate product performance definitions which are untested at the time of signature. Even small incidents related to e.g. one innovative element can be the origin of significant changes requiring significant additional resources and causing substantial disturbances for the production process. Often such problems lead to considerable delays, which could even affect the production of the following products. Experience demonstrates that the production of prototype ships (like many large scale projects also in other sectors) often faces additional cost due to unforeseen difficulties even if delays can be compensated. It is safe to assume that all shipyards have made such negative experience with cost over-runs up to 10% and in rare cases even above. Such cost over-runs are always fully borne by the shipyards as the buyers do not accept to participate in the risktaking (an aspect no always standard in other sectors as media reports in the construction industry seem to indicate.). 25 The availability of innovation aid influences the risk assessment of each innovative element in the development of new products or processes. It allows companies to take additional steps towards new solutions, increasing the chances of market success for innovative products and, in consequence, stimulating further RDI activities. The accelerating effect of innovation aid can be considered as an important factor leading to higher efficiency and competitiveness, which is crucial in order to maintain the technological leadership in the field of complex ship types. Innovation speed is a crucial competitiveness element particularly considering the limited possibilities to protect intellectual property in maritime technology. Considering the specificities of the sector and market failures therein, the WG for RDI proposes that the innovation aid for shipbuilding remains of a vertical nature following the end of the prolongation period (2013) of the State Aid framework for shipbuilding. Analysis of funding mechanisms It is generally perceived that European funding will have the greatest impact when promoting research, development and innovation within the European maritime sector. Managing this funding through a Public Private Partnership, as in the aerospace and other sectors, offers the most effective way to make real progress through the demonstration of large ‘step change’ future technology concepts. It has to be remembered that European, national and regional levels are addressing different types of RDI project, from high critical mass European research to near competitive regional SMEs innovation – and need different types of funding mechanisms. Larger visionary demonstrators can most likely be addressed at a European level where international expertise is requested. Close to the market development can be supported at national and regional level through the pre competitiveness research schemes or innovation aid, regional funding aims to strengthen the cluster’s networks and provide technical excellence supporting local occupation. The point to be made here is not which funding schemes best support RDI, but how existing schemes can be improved and integrated. Recommendations Set up an Innovation Public Private Partnership: “partnership” which focus on the market priority drivers: Eco-efficiency & Safety Create the necessary conditions for large scale demonstration projects which feed into integrated systems / prototypes. Maintain a vertical structure for ‘Innovation Aid’ for the Shipbuilding industry 26 Adapt Environment of Work – Fostering Ecosystems for Innovation This subchapter deals with the promotion of innovation-friendly business environments, which is also one of the core objectives of the EU’s regional policy. The European Regions are currently developing their “smart specialisation strategies”, with the underlying idea of diversification from existing specialisations into related industries, and thereby creating knowledge spill-over and strengthening innovation. This idea is particularly relevant for the maritime industries sector, with its existing and emerging high value-added activities. Technological and non-technological innovation will also be stimulated through improved relations between the different actors of the innovation chain in the maritime industries. 1. Improving relations between the different actors of the innovation and supply chain in the maritime industries 1.1 Role of SMEs As the technology demands for future vessels increase, through rising environmental concern and legislation, increasing fuel prices and diversification of markets, there will be a major increase in the need for new technology and innovation to maintain the competitiveness of the European industry. Due to the small and agile nature of SMEs, they are major providers of new technology at low technology readiness levels and will need increasing access to government RDI support in the future. However, ease of collaboration with the major companies that eventually implement the technology will be key to their success. SMEs will play an increasing role if their innovation attitude will meet new and easy access to supporting schemes and clustering initiatives which will support them on the path of open innovation and sharing hardware/software infrastructures. Open innovation can be considered a major asset of the European business environment, compared to Asian competitors. It will also contribute to improving subcontractor management in the shipbuilding industry, and the competitiveness of the whole value chain by creating synergies. 1.2 Collaboration between industry and research institutes The improved integration between research institutes and industry will require a twofold approach from Universities. On one side the support for the continuation of basic research as a prerequisite for long term innovations, on the other side a set of policies aiming to close the gap between academia and industry when moving closer to the market. This second point shall require further initiatives such as a focus of the academia on applied research when cooperating with the industry, exchange programs for 27 professionals between academia and industry, a balanced trade-off between IPR for industry and licensing schemes as compensation to the academia for applied results. Such collaboration could also be enhanced through public / private partnerships at regional, national and European level. 1.3 Clusters in Europe When considering the shipbuilding industry, the network of subcontractors around the yard represents the backbone for the success of the final product. It was estimated that nearly 75% of the total value of a large high value ship is represented by the contribution of subcontractors. In a globalised environment this network extends into the wider Europe and beyond, but still there are a considerable number of enterprises, more often SMEs, that need to be geographically close to construction site. For highly specialised and high tech products this is one of the most important barriers for the entrance in the business of any non-European incumbent. Clusters associating SMEs, public and private research bodies, as well as public authorities are a strategic point of competitiveness of the European maritime industry. It is therefore crucial to improve their competitiveness, which will also improve the innovation capabilities of SMEs and the open innovation approach with the sharing of risks and benefits. The same is true for other forms of cooperation, in the form of knowledge triangles, university-business cooperation and triple helix networks. Cooperation between clusters from different EU countries would be a means to foster collaboration beyond regional champions also in “closer to market” activities, thereby making use of RDI infrastructure at optimal level. Public support from local and regional authorities can help to promote both clusters and collaboration between them at European level. 1.4 Cross-fertilisation with other sectors Technology transfer from other sectors is essential and cross-sectoral initiatives on topics such as materials, ICT, design, services should be encouraged. Considering the fact that results will most often consist in intangible assets (e.g. knowledge or IT solutions) a specific consideration should be deserved to IPR protection in this domain. Technology transfer can also be promoted through Technology Platforms (TP): - In horizontal terms: Promoting cooperation between disciplinary working groups in Sectorial Platforms and the specific TP for these areas in order to link needs and capabilities, both at national and European level. 28 - In sectorial terms: Promoting cooperation among sectorial TP´s in order to learn from the knowledge of other more advanced sectors (and vice versa), both at national and European level. 1.5 The role of the Waterborne Technology Platform The Waterborne Technology Platform has made good progress in consolidating the industry under one ‘umbrella’ organisation that can present a unified voice to the European Commission. In the future, through closer collaboration of the Waterborne TP stakeholders, it needs to leverage its unified voice in the same way that other sector Technology Platforms have in order to more strongly influence EC legislation and R&D support. Waterborne should also enhance its collaboration with related TPs from other sectors, with the aim of enhancing cross-fertilization with them. Waterborne could also play a role in the dissemination of EU-funded research activities in order to enhance awareness of technological developments throughout the value chain. Recommendations: Support clusters by specific innovation policies. Specifically, cooperation among clusters in the same sea basin needs to be developed further. Clusters should increasingly develop industrial research by adopting an ‘open innovation approach’ and share research through hardware/software infrastructures. Develop further Public Private Partnerships to promote productive communication, assessment of technologies, and the development of coherent research strategies at EU and regional level, based on the smart specialization strategies of the Regions. Continuation and strengthening of the WATERBORNE TP cooperative trans-sectoral model and technology transfer to enhance the cross-fertilization with other sectors Examples for concrete action to take: 29 At European level, a Cluster of Clusters could be funded via the INTERREG programme or other appropriate funds of the Horizon 2020 programme for research and innovation. Encourage creation of a distributed infrastructure for RDI in the maritime industries (ESFRI and others) Regional clusters should be included in the Waterborne technology platform, to increase synergies. 2. Strengthening research and innovation in the maritime industries through the instruments of EU cohesion policy The cohesion policy instruments are particularly effective for the development of smart specialised areas promoting centres of competences geographically localised. These centres will also facilitate a specialisation of the competences and the starting up of new SMEs. Cohesion policy instruments also support clusters to boost innovation in SMEs, transfer results from science to market application, to invest in education and training at all levels (young students to job replacement). Through an increased focus on synergies with Horizon2020, cohesion policy can be an effective instrument for the promotion of technological and non-technological innovation in the maritime industries. 2.1. Regional innovation strategies for smart specialisation In the 2014-2020 programming period, regional innovation strategies for smart specialisation are to be an ex-ante conditionality for European Regions for any EU investments related to R&D. European Regions are currently developing their regional innovation strategies for smart specialisation, which will provide a basis for focused measures to create regional innovation environments. In the area of maritime industries, this is particularly relevant in the context of support for diversification into new markets, as well as differentiation in high value-added activities. The European Regional Development Fund in particular will have an increased focus on support to RDI, following the European Commission’s proposals for thematic concentration (in more developed and transition regions, at least 80 % of ERDF resources at national level should be allocated to energy efficiency and renewables, innovation and SME support; this figure being 50% in less developed regions). The smart specialisation strategies can also be instrumental in promoting the crossfertilization with other strong sectors in the regions and synergies with other EU funds. 2.2. Integrated use of structural funds 30 To accompany the industrial transformation of a given area, it would be beneficial to enable Regions to conduct actions combining multiple funds, in particular ERDF (European Rural Development Fund) and ESF (European Social Fund). Such an integrated approach would allow supporting the diversification of the maritime industries in a focused and comprehensive way. 2.3. Cooperation between European regions Beyond fostering regional innovation ecosystems, the European regional policy instruments could also improve cooperation among European maritime regions and thereby facilitate the positioning of the European maritime cluster in global value chains. Developing common research infrastructures may also be relevant for the maritime industries sector. The INTERREG programme also provides a means to foster collaboration among European regions in the area of maritime industries. 2.4. Synergies between structural funds and Horizon 2020 Cohesion policy instruments can enhance applied research through investing in innovative solutions and research infrastructures and equipment, technology centres etc., as well as international partner search and information campaigns on Horizon 2020. These are ways to facilitate synergies with Horizon 2020 “upstream”, i.e. ahead of the setting up of Horizon 2020 projects. Downstream, i.e. following the implementation of Horizon 2020 projects, cohesion policy can help to exploit and diffuse swiftly R&I results and to create innovation-friendly market conditions, in particular for SMEs, through cooperation with actors in the world of research and education, technology transfer, applied research, technology development and demonstration facilities; as well as support for clusters and cooperative partnerships; proof of concept and early stage financing; pilot actions and demonstration activities. Recommendations: Strengthen the links between the regional authorities and the maritime industries. In the short term, actors from the maritime industries should get involved in the elaboration of regional innovation strategies for smart specialization (RIS3). Regions are encouraged to make use of their operational programmes for the implementation of cohesion policy to support research and innovation, as well as the innovative diversification of the maritime industries, and to address in particular synergies with the Horizon2020 programme. 31 Align the procedures for the application of all structural funds (in particular ESF and ERDF), to enable Regions and Member States to conduct coordinated projects to accompany the industrial restructuring of given areas and promote the innovative diversification of the maritime industries. Examples for concrete action to take: A dedicated seminar with the JRC on smart specialisation in maritime regions could provide a platform for exchange of experience, advice and best practices. Promote R&I business advisory services to give advice on funding sources and collaborative project development. To improve cooperation among European maritime regions, encourage the use of possibilities to finance projects through ERDF in different areas and through several CSF funds (see Art.55 and Art.60 of the Commission’s proposal for cohesion policy, COM (2011) 615 final). 32