Written evidence submitted by Maritime UK (MAR0014)
About Maritime UK
Maritime UK is the umbrella body for the maritime sector, bringing together the shipping, ports, services, engineering and leisure marine industries. Our purpose is to champion and enable a thriving maritime sector.
Maritime UK has assumed responsibility for coordinating the delivery of industry actions within the Maritime 2050 strategy. Our members are maritime trade associations, regional cluster organisations and social partners: Belfast Maritime Consortium, British Marine, British Ports Association, CLIA UK & Ireland, Institute of Chartered Shipbrokers, Maritime London, Maritime UK South West, Mersey Maritime, Nautilus International, Port Skills and Safety, The Seafarers’ Charity, Shipping Innovation, Society of Maritime Industries, Solent LEP, The Baltic Exchange, Trinity House, UK Chamber of Shipping, UK Major Ports Group and the Workboat Association.
Introduction
When the Maritime 2050 strategy was published in January 2019, it was the first major strategy comprehensively outlining government and industry priorities and ambitions for the future of the UK maritime sector. The document set out over 180 recommendations across seven themes, all intended to ensure the UK secures its position as a globally renowned, competitive maritime nation. These themes spanned widely, anticipating challenges and opportunities ahead across the environment, security, infrastructure, people, competitive advantage, innovation, technology and trade, and the strategy detailed the ways in which the maritime sector – through both government and industry action – could capitalise on these opportunities in the short, medium and long-term.
At the halfway point for the short-term recommendations, Maritime UK and its members produced a progress report (June 2021) to assess where progress was being made. That report can be seen here.
Despite major challenges since January 2019, the Maritime 2050 strategy has remained relevant and continues to provide a heading that can help respond to the additional challenges of recovery from the pandemic. The pandemic has brought into sharp relief the essential nature of maritime supply chains and their key workers in keeping the country supplied and connected. Delivering upon the recommendations of Maritime 2050 will contribute to future resilience in this regard.
Maritime UK believes that Maritime 2050 has helped to focus and catalyse developments across the sector with some areas of very promising progress, whilst there are other areas in which progress has been much slower and will need to be prioritised soon.
Whether and how the ambitions and objectives described in Maritime 2050 support the maritime sector.
Maritime 2050 is the first long-term strategy for the UK’s maritime industries. Having been developed jointly with industry ahead of publication, Maritime UK believes Maritime 2050 to have identified the correct drivers for maritime growth and set out many of the specific recommendations needed for delivery.
There was significant support for the strategy from the sector, not least given that it provided a sector-wide and detailed strategy for growing the maritime industries in a manner not seen previously. As well as demonstrating national focus and attention on maritime for the international maritime sector, Maritime 2050 has also helped to engage other government departments beyond the Department for Transport (DfT) with the sector.
Much of the strategy’s main recommendations are headline in character, with specific short and medium-term actions reflected within more detailed “route maps”. Given the long-term nature of the strategy, the industry is keen to see Maritime 2050 refreshed on a regular basis to ensure it remains as relevant as necessary. That should see the route maps with targets refreshed regularly (as actions are executed) and the headline ambitions of the overall strategy reviewed in partnership with industry from time to time.
Progress towards the ambitions and targets set out in Maritime 2050, including the effectiveness, pace and priority of the strategy’s implementation.
Competitive advantage
Maritime UK believes that industry and government partnership has improved since the publication of Maritime 2050. That has been both at the strategic level – from Maritime 2050 itself to the National Shipbuilding Strategy – and on operational levels. Operational partnership was particularly successful throughout the pandemic where joint efforts to maintain the flow of critical supplies in the UK and ensure business continuity saw a very close partnership between government and industry.
To progress industry recommendations within Maritime 2050, Maritime UK has worked with its members to prioritise recommendations within each theme and members have taken leading roles on those recommendations relevant to their part of the sector. Government and industry also work together through a range of joint working groups relevant to different areas of priority, including the Clean Maritime Council, the Maritime Exports and Investment Group, Technology and Innovation Group, Maritime Skills Commission, Regional Council and similar.
Industry and government have worked together increasingly effectively to progress key elements of the strategy, such as when seeking greater public investment to co-invest with industry on decarbonisation priorities.
Since publication, the UK has sought to show global maritime leadership, particularly through the IMO. The UK was the first major economy to legislate for net-zero carbon emissions and the first to produce a national Clean Maritime Plan. It was also the first to announce that its share of international aviation and shipping emissions would be included within domestic carbon targets. During the pandemic, the UK was at the forefront of calls for seafarers to be considered key workers. The UK government successfully bid to host the Global Maritime Forum and London International Shipping Week is increasingly viewed as a key moment in the global industry calendar for coming together to discuss the shared challenges for the sector. The UK delegation to the IMO includes industry representatives, and Maritime UK members actively participate in several ways.
The UK flag continues to perform very highly amongst states in the Paris MOU, denoting high compliance with global maritime legislation and safety regulations.
The Chancellor announced plans to reform Tonnage Tax at the 2021 Autumn Budget and London’s first shipping IPO in four years was successfully completed in May 2021 raising $253m.
In the autumn of 2019 UK Export Finance (UKEF) through consultation agreed to a more flexible definition of an export for the shipping industry. The more flexible use by UKEF was a key recommendation for the ‘Catching the Wave’ report produced by Maritime London as a consequence of Maritime 2050.
Similarly, the Maritime Coastguard Agency established a Financial Products Working co-chaired by Maritime UK member Maritime London, which provided a set of recommendations designed to bridge the evident competitiveness gap in providing capital to fund decarbonisation. These recommendations summarised below are now being actively progressed with relevant government departments.
Maritime 2050 aimed to shine a spotlight on the capability and value of each of the UK’s regional maritime cluster offers and to develop their potential as centres for maritime activity in their own right. This work has taken on added priority in the context of the government’s levelling-up agenda and its interventions, such as the levelling-up fund.
Successful delivery of key activity under the theme of regional growth has largely involved increasing the coordination between regional clusters, national bodies and government, something that has generally been delivered through increased activity as part of Maritime UK’s Regional Cluster Development Programme, supported by the DfT.
The government’s freeports programme is viewed by industry as a very useful vehicle to take forward several of the sector’s priorities in unlocking and accelerating economic development in coastal communities, such as on planning reform and business environment measures.
Key delivery has included the development of operational regional clusters in Northern Ireland, the Solent, Scotland, Cornwall and the South West, Liverpool City Region and the Humber region. These clusters comprise Maritime UK’s Regional Council and regularly meet to discuss regional cooperation and involvement in national programmes and initiatives.
The Regional Cluster Development Programme was in 2019/20 provided £50,000 in government funding for its first phase, which has included the establishment of several new clusters, the development of the Regional Council and a toolkit to support further cluster creation. Government has subsequently provided another £300,000 to support the continued development of the programme.
The programme has developed individual Regional Cluster Development Plans in all regions, detailing current work programme and future ambitions. Activity delivered through the regional clusters directly contributes to the delivery of wider Maritime 2050 objectives and increases the level of input for national consultations, events and programmes around subjects such as technology and innovation, careers, skills and training, decarbonisation.
Government explored the case for freeports across England and in 2020 opened the freeports consultation process. As part of the 2021 Budget, the first eight freeports in England were announced; Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames, Teesside, and East Midlands Airport. In 2022, the Scottish and UK governments agreed to introduce freeports in Scotland as ‘green ports’. Regional clusters have benefited from funding for several maritime projects in England through schemes such as the then ‘MHCLG Get Building Fund’.
The government has recently published its National Shipbuilding Strategy refresh. Maritime UK views the strategy as a significant intervention to support the sector and it makes significant reference to Maritime 2050. Specifically, the refresh builds upon and helps to accelerate progress on its themes. Particular examples are the establishment of the Maritime Capability Campaign Office (trade), UKSHORE (environment) and reintroduction of the Home Shipbuilding Credit Guarantee Scheme (competitive advantage).
The Maritime Autonomy Regulation Lab (MARLab), led by the MCA has been established. Bringing together representatives from academia and industry, the objective is to pioneer ideas for the regulation of maritime autonomous surface ships and enable the UK to take a leading role in this field internationally. To aid the introduction of new technologies, and to complement the work of MARLab, Maritime UK’s Maritime Autonomous Systems Regulatory Working Group has for the past four years published guidelines on the regulation and governance of autonomous systems in the marine space.
Technology
Following publication of a Technology Route Map, developments have focused on clean maritime innovation, autonomy, the establishment of cross-sector collaborative functions, and regulation.
An initial £23m from government to co-fund green innovation through the Clean Maritime Demonstration Competition for technology and infrastructure was followed by a further £206m to extend and deeper the competitions’ impact. Maritime Research and Innovation UK (MarRI-UK) was established by industry as a cross-collaborative innovation vehicle at the University of Strathclyde. DfT subsequently invested £4.8m in MarRI-UK to promote maritime technology development. This led to two several co-funded competitions.
The Port of Tyne has established the first Maritime 2050 Innovation Hub at the Port of Tyne, and in 2022 will host the first Maritime Innovation Week. The Innovation Hub’s partners are Port of Tyne, Drax, Offshore Renewable Energy Catapult (OREC), Nissan, Connected Places Catapult, Accenture, Royal HaskoningDHV, Ubisoft and DfT.
Maritime UK’s Autonomous Systems Regulatory Working Group has published voluntary industry guidance on the design, build and operation of maritime autonomous surface ships.
The Department for Business, Energy and Industrial Strategy (BEIS) is developing an overview of each regional cluster’s innovation offer and priorities for government co-investment.
The Maritime and Coastguard Agency and established MarLab to consider the future regulation of maritime automation.
Maritime UK and the KTN have established a sector-wide portal for innovation funding opportunities and are forging much closer links with each of the catapults to ensure they are best supporting the maritime sector.
Several initiatives have been delivered in response to the Route Map, such as a smart ports whitepaper published by the British Ports Association in partnership with the Port of Rotterdam.
In recent years, the MCA has introduced the use of Autonomous Surface Vessels on the UK Civil Hydrography Programme (CHP) to undertake seabed mapping in the UK EEZ.
People
Focused on the workforce, diversity, skills, careers and welfare, the People Route Map set out a series of specific actions for industry and government.
Across a total of 15 recommendations, significant progress has been made in establishing frameworks and initiating new programmes. The past two and a half years has seen the successful establishment of the Maritime Skills Commission, the industry’s cross-sector careers and outreach programme, and the expansion of the existing Women in Maritime programme to include other diversity challenge areas into what is now known as the Diversity in Maritime programme.
Maritime UK and its members established a cross-sector careers and outreach programme in May 2020 in response to the Maritime 2050 People Route Map. In January 2022, its first impact report was published. It showed that the programme engaged with more than 49,000 people between May 2020 and October 2021. In the twelve months since its establishment, the newly established Industry Ambassador Network had delivered maritime careers information to over 23,000 school and college children, primarily through virtual careers events across the UK. This figure is despite the restrictions of the pandemic. A total of 404 careers professionals have chosen to join a new UK-wide network, enabling their access to the maritime resources, Continuing Professional Development (CPD) sessions, and support for their own careers programmes. The programme has delivered CPD sector awareness training to 374 careers professionals supporting adult job seekers and switchers. The newly established careers website has had 135,631 hits in its first twelve months of being live. Local Enterprise Partnerships (LEPs) and Career Hubs are now regularly and proactively approaching the programme for sectoral support for their programmes. These include larger organisations, such as the Tees Valley Combined Authority. A full impact report can be seen here.
Since Maritime UK was supported by DfT to establish the Diversity in Maritime programme, the Diversity in Maritime Taskforce has overseen:
The Maritime Skills Commission was established in July 2020 with Professor Graham Baldwin as Chair, having received a tasking letter from the Maritime Minister, to which its work programme adheres. This has resulted in the following activity:
Whilst there has been significant progress on the above, Brexit has caused some particular challenges for workers in the maritime sector. UK workboat operators are experiencing difficulties arising out of changes to applicable cabotage rules, visas and work permits, and recognition of UK crew certificates. Workboats spend long periods of time operating in territorial waters with highly specialized crews. Prior to Brexit, UK workboat operators could provide services in the waters of other EU member states as of right. The Trade and Cooperation Agreement which came into force subsequent to the UK leaving the EU allows for tariff-free, quota-free access to each other’s markets for goods, but not services. It also covers issues such as fishing rights, security and future competition. UK service providers can no longer operate across national borders in the EU as they did before, which means UK companies no longer have blanket rights to provide cabotage and workboat services throughout the EU on the same terms. Operations now depended on the rules of the relevant member state for the particular service in question.
Environment
Maritime 2050 recognised that industry and government would have to work closely to respond to the challenge of decarbonisation, to develop alternative zero emission fuels and technologies for vessel propulsion and the associated infrastructure to bunker those new solutions, as well as improve air quality whilst vessels are in port.
Societal interest in responding to climate change has increased since the publication of the Maritime 2050 strategy, and in 2019, the UK became the first major economy to legislate for net zero carbon emissions by 2050. Since the pandemic there has been a clear move to respond to needs of recovery and climate change in unison; asking how countries can ‘build back better’, with decarbonisation and green growth at the heart of the UK’s definition of the term.
There have been significant positive developments in the environment pillar, with those developments including:
Different parts of the sector have published environmental strategies and roadmaps for their industries, such as the Port Air Quality Strategies developed by major ports in England, which help drive these ambitions forward. Others include the ‘North Sea offshore wind vessels decarbonisation roadmap’ and ‘Decarbonising recreational vessels in the UK and Europe roadmap’.
Collaborative government-industry bodies such as the Clean Maritime Council have been established to act as a strategic advisory board for policy on emissions from the maritime sector. The Council includes representation from industry, academic and non-governmental organisations. There are four task and finish groups to explore economic incentives for domestic maritime, shore power, fuel and technology pathways and international emissions. These are key workstreams that demonstrate the strong partnership of the industry and Government to develop sound and ambitious measures to address emissions.
Internationally, the UK government continues to work closely with the IMO on maritime issues, providing leadership, challenging and setting examples with policy and engagement, including the transition to new environmental standards. The UK delegation to the IMO includes advisory industry organisations with Maritime UK members contributing in a number of ways.
The UK government has amended the Renewable Transport Fuel Obligation (RTFO), which entered into force on 1 January 2022, to include renewable marine fuels of non-biological origin into its scope.
One of the numerous declarations launched at COP26 in November 2021 was the Clydebank Declaration. This is a UK lead initiative that, within the Zero-Emission Shipping Mission, encourages and provides a framework for governments to establish green corridors – decarbonised shipping routes between two or more ports. That would include both ships and ports. Upon its launch, 22 countries have signed up for the declaration ranging from the US to Fiji. The collective aim of all 22 signatory nations is to decarbonise a minimum of six shipping routes by 2025.
Another positive progress is the announcement of the Operation Zero initiative, which is for Zero Emission Vessels (ZEVs) to be deployed in the North Sea’s offshore wind farms by 2025 while also taking into consideration the landside infrastructure solutions needed to upscale and maintain the operation of ZEVs in the region’s offshore wind sector.
Whilst there has been significant progress in this space, there remains a need to increase the scale and pace of delivery to meet 2050 targets.
Maritime UK is seeking the revision of the Clean Maritime Plan (2023) to clarify the UK’s domestic targets and in so doing, provide confidence on the long-term viability of the investments being made today.
Given the uncertainties and complexities of addressing climate change, a government approach that encourages all solutions through technology-neutral policies is essential to achieving climate goals.
The amended Renewable Transport Fuel Obligation (RTFO) is currently the only domestic maritime policy in force that aims to incentivise the uptake of renewable marine fuels. Unfortunately, while the government has committed to introducing technology-neutral policies for shipping, the RTFO policy is not considered to meet that criterion.
Finally, whilst there is understandable focus on the research and innovation phase of the sector’s response to the decarbonisation challenge, there needs to be focus on the deployment of technologies. A very good example of this is the deployment of shore power facilitates across the country. There is also an unglamourous but important role for government in incentivising the introduction of technologically possible but economically unviable assets through, for example, better use of capital allowances and tax incentives. This has not yet been properly factored into the Maritime 2050 work programme and of course is dependent on HM Treasury playing its part.
Infrastructure
95% of the UK’s physical trade with the world arrives or departs the nation by sea. As the UK’s predominant global gateways with the world ports are crucial enablers of strategic supply chains for the UK – allowing our industries to export and bringing in the food and goods that we all depend on in our daily lives. For example, virtually all of the £101 billion of international trade by the UK’s automotive sector moves through our ports. Around half of the UK’s food and feed needs are imported via our ports.
The UK ports sector has a strong record of private sector investment in ports and related infrastructure – on average around £600m per year in normal conditions and even maintaining close to £550m during the pandemic. Ports have ambitious future investment goals.
While there have been some positive developments in this space, the overwhelming view of the sector is that the infrastructure pillar is an area in which progress is significantly behind where it need be.
A number of the specific commitments (e.g. Port Economic Partnerships have not materialised) and more general commitments, like reviewing landside port connectivity – which in itself referenced a previous very sensible review undertaken by DfT that did not progress to action, have not incurred.
It is disappointing that some of the more ‘landside’ or infrastructure elements of Maritime 2050 have not made progress as these are important drivers of key UK strategic priorities such as a reinvigorated globally trading nation, robust and resilient supply chains and regenerating (‘levelling up’) often hard-hit coastal communities. It is arguable that some of these elements, such as improved port connectivity, could have played a role in mitigating parts of the supply chain congestion seen over the last 24 months. For example, greater and better use of rail freight has been identified in various DfT studies and then again in the Sir Dave Lewis supply chain taskforce work in Q4 2021.
We hope that some of these infrastructure challenges and opportunities will benefit from the DfT’s emerging ‘Future of Freight’ strategy. There are some encouraging early elements, but Future of Freight needs to make the jump from broadly sensible strategy document to actual change in a way that the Port Connectivity Study and significant parts of the Maritime 2050 infrastructure theme have not.
Looking forward, there is a need (and opportunity) to look at the lessons from the pandemic. The UK’s ports and the supply chains they service have a remarkable job in ensuring a high level of resilience despite the confluence of unprecedented difficulties. Some aspects of this look like they will be picked up in the Future of Freight project – such as the valuation of freight flows in governmental decision making, seeing freight as a system, improving resilience (but without ‘picking winners’), regarding ports and maritime as key workers. But this raises some important questions for the DfT about how sectoral strategies like Maritime 2050 work together with cross modal strategies like the Future of Freight.
On green infrastructure, there is a real need for a new cross-government focus, recognising that making progress on the national roll-out of shore power, for instance, will require engagement beyond DfT to BEIS.
Trade
In September 2019, government and industry collaborated to publish a five-year plan for maritime exports and investment. The global pandemic prevented many of the headline in-person events and activities foreseen by the plan from taking place. Nonetheless, industry and the DIT have worked to increase the profile of the UK’s maritime sector overseas, and there has been a step-change in the level of international engagement at important activities such as London International Shipping Week.
In the context of the National Shipbuilding Strategy, the DIT Maritime team is growing significantly as it established the Maritime Capability Campaign Office, and the industry hopes and expects the new resource to better support SMEs to get to market, to match UK capability with international opportunities through the commercial network in-country and to market the UK’s maritime sector proposition more comprehensively in key markets.
The sector has been closely engaged in the development of the UK’s negotiations on Free Trade Agreements following the UK’s departure from the European Union.
In response to the recommendation to commission a study into the competitiveness of the UK’s maritime professional services sector, Maritime London led the production of the ‘catching the wave’ report in 2021. One of its key recommendations, that the UK establish a one-stop-shop for international maritime investors, was realised in 2021 when the UK Shipping Concierge Service was established theUK Government. The Shipping Concierge will:
The freeports policy has been taken forward and is covered elsewhere in this submission.
The effect of Maritime 2050 on Government policies and regulation, maritime sector decision making and economic and environmental outcomes, including the Clydebank declaration agreed at COP26.
Whilst the sector is still in the early stages of implementation for the Maritime 2050 strategy, it is fair to say that the ambitions identified within the strategy are having an impact upon decision-making by industry and government, albeit to differing extents.
Government policies and regulation
In terms of government decision-making, Maritime 2050 continues to be cited by government in relevant strategies and announcements following the publication of Maritime 2050. In particular, the recently published National Shipbuilding Strategy makes progress against many of Maritime 2050’s themes, and directly cites the Maritime 2050 ambitions as a basis of its interventions.
Industry decision making
Maritime 2050 has significantly shaped the activity of Maritime UK and the sector’s trade associations, whose strategic plans are framed around the strategy. Examples of that can be seen in those cross-sector programmes and initiatives established in response to Maritime 2050. These include the Diversity in Maritime, Regional Cluster Development, Maritime Skills Commission and Careers and Outreach Programmes. Their respective terms of reference make clear their role in coordinating and delivering in response to Maritime 2050
There is anecdotal evidence of individual companies developing their own business plans to respond to the opportunities foreseen within the strategy. Maritime UK has created an industry awards programme that celebrates progress in delivering Maritime 2050. Categories are based upon the strategy, and there is a specific award focused on Maritime 2050.
Where there has been public co-investment made available, such as through the Clean Maritime Demonstration Competition, companies have co-invested and developed plans at a pace and on a scale not previously seen.
Economic and environmental outcomes
Maritime UK’s own economic impact study is due to be published in the coming weeks but based upon ONS data, there is a two-year lag, so direct economic outcomes are difficult to identify.
There is anecdotal evidence of positive economic outcomes across the sector. An example is the implementation of the freeports policy, and interest from investors to move into areas designated as freeports.
Maritime UK believes that the refreshed Clean Maritime Plan, due to be published next year should consider how targets can be used to assess environmental outcomes.
Maritime UK is committed to working on partnership with government to make Maritime 2050 a reality, and that includes a regular assessment of where progress has been made, and where it has not.
April 2022