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The Marine Socio-Economics Project (MSEP) is a project funded by The Tubney Charitable Trust and coordinated by NEF (the new economics foundation) in partnership with the WWF, the MCS, the RSPB, and The Wildlife Trusts. The project aims to build socio-economic capacity and cooperation between NGOs and aid their engagement with all sectors using the marine environment. The UK shipping industry Fl ick r The UK shipping industry involves the transport of passengers and freight by sea. s Photo: Ja ia av n i h r ac on M Shipping continues to be the dominant mode of transport for UK international trade, moving around 95% of international goods to and from the UK by sea.1 The industry has, in general, grown steadily over the past decade, following the introduction of the tonnage tax in 2000 (which allows UKbased shipping companies to have their taxable profits from shipping activities determined according to the carrying capacity – tonnage – of their vessels).2 Almost all of the top 10 shipping nations, by owned fleet-size, operate tonnage tax regimes. Since the introduction of the tonnage tax in the UK, the previous decline in the size of the UK shipping industry has been dramatically reversed, with a six-fold growth in the UK trade shipping fl eet. The turnover of the shipping industry amounted to nearly £13 billion in 2011, according to the Chamber of Shipping.3 Shipping is also part of a much wider maritime services cluster, which contributes nearly £27 billion (2012) to the UK’s GDP and supports around half a million jobs throughout the UK.5 In 2012, the total number of UK trading vessels directly owned, parent-owned, or managed by UK companies was 15046 – just under 2% of the world trade fleet.7 There were a total of 675 UK-owned trading vessels of 100 gross tons and over, representing an 8% decline in the total UK-owned fleet, compared to 2011. About 57% of vessels are container and ro-ro (‘roll on-roll off’) passenger and cargo ships; 21% are liquid (oil, chemical, gas) tankers; 14% are dry bulk carriers; and 8% are passenger or cruise ships.8 1 Saunders J et al. (2010) Valuing the Marine Estate and UK Seas: Initial Static Baseline Assessment. The Crown Estate. 5http://www.maritimeuk.org/wp-content/uploads/2012/08/Maritime-UK-tonnage-tax.pdf 2 Oxford Economics (2013) The economic impact of the UK Maritime Services Sector: Summary 6https://www.gov.uk/government/statistical-data-sets/fle01-tradingfleets-and-ships 3http://www.ukchamberofshipping.com/media/filer_public/30/3d/303d276f-8e4d-4807-9a17-6b14e5effbf4/chart_shipping_ and_the_economy_ppt.pdf 7http://www.emsa.europa.eu/news-a-press-centre/download/1933/1554/23.html 4http://www.ukchamberofshipping.com/media/filer_public/39/ e8/39e8dab9-9f9a-412d-990a-5814d47ffc2e/economic_impact_of_ uk_shipping_sector_-_feb_2013_including_regional.pdf 1 It is estimated that the shipping industry made a £5.6 billion value-added contribution to UK GDP in 2012.4 8https://www.gov.uk/government/statistical-data-sets/fle01-tradingfleets-and-ships MSEP Facts & Figures Series 2: The UK shipping industry Figure 1. Number of UK-owned trading vessels vs. UK fleet tonnage capacity (2002-2012) 200 180 Percentage increase in the number of vessels (500 gross tons and over) 160 140 120 100 Percentage increase in total capacity (in thousand deadweight tonnes) of UK fleet 80 60 40 20 Source: DfT analysis of IHS Global data In 2012, the vast majority of the UK-owned trading fleet (about 85%) were vessels of 500 gross tons and over, making up a total capacity (for all trading vessels) of 21 615 thousand deadweight tonnes.9 Although the size of the fleet (vessels of 500 gross tons and over) has only increased by 22% in ten years, the fleet’s total capacity has increased by 76.5%.10 Figure 1 shows the percentage increase in the number of UK-owned trading vessels (500 gross tons and over) versus the percentage increase in total UK fleet capacity (in thousand deadweight tonnes) between 2002 and 2012.11 20 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 0 Direct jobs supported by the industry in 2011 were around 0.5% of total employment in the UK. Of these, approximately 28% are UK officers or ratings, 5% are based onshore, and the remainder are composed of foreign nationals working as either officers or ratings on UKregistered vessels. Excluding foreign seafarers, the shipping industry employs over 48 200 UK nationals. The employment of UK nationals within the industry has increased by 17.8% since 2009, creating an additional 7300 jobs in the process.13 Nearly 30% of UK nationals employed by the shipping industry in 2011 were based in Scotland. The second largest region, the North West of England, accounted for just 12% of employment. There were three other regions that each accounted for around 5000 UK nationals employed by the shipping industry; the North East, the South West, and the South East of England.14 In 2011, the overall contribution (including the direct, indirect, and induced impacts) of the UK shipping industry is estimated to have been £12.5 billion to UK GDP or 0.8% of the UK economy, supporting 145 500 direct jobs and about twice as many if indirect jobs are included. It is estimated that the direct contribution by the shipping industry to the UK economy was of £5.6 billion GVA. Although this represented a modest contraction compared to 2009 figures, the economic contribution of the shipping industry in the last decade has experienced an annual growth of 10.6% in real terms.12 In terms of its relative contribution to regional GDP, the shipping industry is most important to the Scottish economy, accounting for approximately 1% of regional GDP.15 9https://www.gov.uk/government/statistical-data-sets/fle02-ukowned-vessels 13 Oxford Economics (2013) The economic impact of the UK Maritime Services Sector: Shipping 10https://www.gov.uk/government/statistical-data-sets/fle01-tradingfleets-and-ships 14 Oxford Economics (2013) The economic impact of the UK Maritime Services Sector: Shipping 11 https://www.gov.uk/government/statistical-data-sets/fle01-tradingfleets-and-ships 15 Oxford Economics (2013) The economic impact of the UK Maritime Services Sector: Shipping 12 Oxford Economics (2013) The economic impact of the UK Maritime Services Sector: Shipping. 2 MSEP Facts & Figures Series 2: The UK shipping industry Shipping activity can have an impact on the environment in a number of ways, including pollution by oil and hazardous or toxic substances from incidental, operational, and illegal discharges; air pollution through emissions and particulate matter from engine exhaust gases and cargo tanks, which may be carried over long distances; discharge of operational wastes from ships, including discharge of raw sewage and litter; the introduction of non-indigenous organisms; pollution and physical impact through loss of ships and cargo; and physical and other impacts including noise and collision with marine mammals.16 A recent spill of polyisobutene (PIB) – a sticky chemical used as a lubricant in ship’s engines – has highlighted another negative impact the industry can have on the environment. The Royal Society for the Protection of Birds (RSPB) estimated that around 4000 seabirds were affected by the spill that took place in early 2013, washing up the birds off the south coast of England.17 The international response to this incident came quickly. In late 2013, the International Maritime Organization (IMO) approved a reclassification of PIBs from 2014, which means that ships will only be able to wash their tanks and dispose of all PIB residues while in port. Previously, it had been legal for discharges to be made when vessels washed out their tanks, as long as they were farther than 12 nautical miles from the nearest point of land.18 International shipping is estimated to contribute some 3% of global emissions of CO2. Although the industry has reduced its consumption of fossil fuels by, for example, employing increasingly thermally efficient diesel engines in recent decades, the current total fuel oil consumption is in excess of 350 million tonnes per annum.19 16http://qsr2010.ospar.org/media/assessments/p00440_Shipping_Assessment.pdf 17 http://www.bbc.co.uk/news/science-environment-22505544 18http://www.bbc.com/news/uk-england-24617697 19http://www.imo.org/OurWork/Environment/PollutionPrevention/ AirPollution/Documents/Air%20pollution/Future_ship_powering_options_report.pdf 3 In the UK, aviation and shipping were not included in the 2008 Climate Change Act – a legal commitment to reduce greenhouse gas emissions by 80% by 2050. However, the UK Committee for Climate Change has recently advised the government that there is no reason to treat shipping any differently from other sectors. An analysis of the UK transport greenhouse gas emissions over a 20-year period (1990 to 2009) showed that the international shipping component was around 6% in 2009, compared to 20% for international aviation and 74% for land-based vehicles.20 But, recent research by the IMO suggests that the impact of shipping on climate change has been seriously underestimated and that the industry is currently churning out greenhouse gases at nearly twice the rate of aviation globally. This is very significant in a context of shipping often being seen as the environmentally friendly alternative to other transport methods; because the industry is growing so fast, the pollution it creates is at least 50% higher than previously thought and maritime emissions are also set to increase by 75% by 2020.21 Infrastructure, aggregates and shipping 1. The UK marine aggregates industry 2. The UK shipping industry 3. The UK ports industry Series 2 was written and researched by Fernanda Balata (Researcher at NEF) and Chris Williams (Marine SocioEconomics Project Coordinator at NEF). All the data examined in this series come from the UK Government, The European Wind Energy Association (EWEA), the Crown Estate, Renewable UK, OIl & Gas UK, the Chamber of Shipping or Eurostat - unless otherwise referenced. These data sources can be found on the MSEP website: http://www.mseproject.net/data-sources 20http://www.imo.org/OurWork/Environment/PollutionPrevention/ AirPollution/Documents/Air%20pollution/Future_ship_powering_options_report.pdf 21http://www.independent.co.uk/environment/climate-change/shipping-pollution-far-more-damaging-than-flying-396455.html Published by the New Economics Foundation (NEF), June 2014. www.neweconomics.org Tel: 020 7820 6300 Registered charity number 1055254.