Royal Van Oord places a special emphasis on environmentally friendly solutions. What is driving this push to create a better world?
We are a pretty old family company, 154 years old to be exact; I myself am the 4th generation and the 5th is already active in the company. For us, decisions are made with a long term effect, we think about the next generation not just the next quarterly results. Issues like global warming or the energy transition get a lot of attention hence - the deadlines of the Paris agreement might seem far in the future for some, but the way I see it 2050 is just a generation away, so around the corner.
What are the most notable ways in which you are accomplishing this?
Our largest footprint is associated with the vessels we have, most of which traditionally run on marine diesel. We have made the decision to gradually convert all our vessels to technology and fuels that have zero emissions. Our goal: to be CO2-neutral in 2050. To reach this goal, we need to invest in new technologies. Recently we christened a high tech and sustainable trailing suction hopper dredger fueled by gas (LNG) and two more will follow in 2023. On top of this, we are building our first vessel which will be fueled by green methanol - it will also be the largest turbine installation vessel in the world of its sort. Interestingly, these "fuels of the future" are not available yet in large quantities, but we decided to make the investment because we believe this will change in the coming decade. So if we build a new vessel, we choose engines which can easily be retrofitted on the fuels of the future.
Your portfolio is very diverse; how do the various business areas contribute to your revenue, and where do you see the most growth potential in the future?
Our heritage business is marine contracting and dredging but nowadays that business is smaller than 50% of our turnover. Offshore oil and gas are and will continue to be part of what we do.But the fastest sector and what I believe will become our largest business this decade is offshore wind. We were among the first movers and positioned ourselves as one of the leading contractors for this kind of projects. Our strategy is a portfolio approach, covering all mentioned fields of business.
The growth markets will for the short notice be in Europe, if you look at the ambitions the continent has, particularly after the war in Ukraine which has increased the need for energy independence. A future market will be the US; they only recently started focusing on this sector but the current administration wants to install 30 GW by 2030 - quite ambitious for a timeline of only eight years. Japan, Taiwan, South Korea all have potential, Australia also.
We are going to see a mix in the world - in the countries around the equator development of solar energy, and in the northern and the southern hemispheres onshore and offshore wind projects, because there is plenty of wind there.
There is a lot of discussion about climate mitigation in the world, but you also focus on what you call "climate adaptation." Could you tell us more about that?
Indeed, we have a strategy defined for the coming decade and there are two key areas we are considering. One is our support to enhance the energy transition I was mentioning before, and the second one is to put our knowledge, experience and equipment to use for climate adaptation. After this summer in Europe, it is clear that something has definitely changed in our climate and low lying lands are being affected - sea levels are rising, beaches are disappearing etc. This is why coastal protection became such a central part of our strategy. We build breakwaters to protect against sea erosion for instance, but also add value through nature, by adding seagrass, coral etc. We want to make a positive impact with our projects.
Recent supply chain challenges have increased operational costs. How do you strike a balance between this and the new investments required to incorporate sustainability into your work?
Indeed, both vessels and the costs of projects have become substantially more expensive during the last 12 months, we have seen price increases of 20 to 30% in shipyards around the world and significant increases of costs in the supply chain. The good news is that this green transition will not take place overnight, but rather it will be a step by step transformation. It will take a number of years and, obviously, green fuels for example will only ultimately be accepted if their prices are in the same region as the ones for oil and gas.
My assessment now is that green hydrogen will become interesting for our industry in the next decade. Firstly, we need to produce these fuels in larger quantities, and looking at the plans around the world to build green hydrogen plants, I think that we will certainly get there. It will obviously also depend on governments' willingness to make these green fuels attractive through taxation, for instance. On the private side, companies might decide to only do business with partners who have vessels that run on green fuels. A lot of things need to happen to get us to where we want to go.
Do you currently feel supported by EU policies?
This is an extremely relevant question at the moment because many things have changed in Europe over the past six months. The need to become independent from Russia got the renewable energy sector much more attention than it ever had. I have been in this business for 20 years and I have never felt so much political support as during the last six months. It is an entirely new world.
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