Samsung Says Russia’s Zvezda Illegally Terminated $4B Shipbuilding Deal

Samsung says Russia's Zvezda illegally terminated two contracts for block production for Arctic tankers (SHI file photo)

PUBLISHED JUN 13, 2024 2:17 PM BY THE MARITIME EXECUTIVE

 

 

U.S. sanctions against Russian interests and specifically the listing of the Zvezda shipbuilding complex in 2024 are being cited as the reason behind the cancelation of a roughly $4 billion shipbuilding deal between Zvezda and Samsung Heavy Industries. The Russians' unilateral decision to pull out of the deal came after nearly two years of increasing sanctions by the U.S. and South Korea and the U.S. move earlier this week that included further targeting of the Arctic oil operations.

"The Russian client unilaterally claimed that the contract was not fulfilled during a negotiation process,” Samsung Heavy Industries wrote in a stock exchange filing. “Since the contract termination notice is illegal, we plan to file a complaint with the Singapore Arbitration Court to dispute the illegality of the contract termination and scope of return, while continuing negotiations.”

Samsung Heavy Industries has a long history of working with Zvezda and between 2019 and 2021 celebrated a series of high-profile shipbuilding agreements for the Koreans to design and deliver blocks for tankers that would be completed at Zvezda. The total contracts called for 22 vessels with a combined value of approximately $5.7 billion. 

Five vessels under the 2019 contract were delivered, but the 2020 and 2021 agreements were hampered by the increasing sanctions. Samsung was designing the vessels when the first sanctions were imposed after the invasion of Ukraine. Competitor Daewoo Shipbuilding canceled three contracts with the Russians in 2022 citing failure to make installment payments while initially, Samsung Heavy Industries sought to continue its projects. 

Samsung Heavy Industries reports in 2022 it invoked Force Majeure, suspending the design work for 10 LNG carriers and seven shuttle tankers. That portion of the contract is reported to be valued between $3.7 billion and $4.2 billion. Samsung reports it discussed future implementation plans for the contract with Zvezda.

When Zvezda was designated by the U.S. in February 2024, Samsung notes it was blocked from working with Zvezda. They said further negotiations were ongoing with the Russian shipowner.

Zvezda filed a notice demanding termination of the contract on June 11. Further, the Russians are demanding the return of $800 million in installment payments already advanced to Samsung Heavy Industries along with interest. 

The notice came as the U.S. earlier this week targeted Russia’s planned LNG projects with new sanctions. They included Zevzda, expanding the listing on three Arctic LNG tankers, and in total targeting seven vessels all tied to the LNG operations.

Samsung Heavy Industries in its stock exchange filing said it plans to dispute the termination notice. They will seek arbitration.

Newbuilding Prices Reach Highest Level in 16 Years Driven by Strong Orders

Shipbuilding prices are being driven up by the strong orderbooks (HD Hyundai file photo)

PUBLISHED JUN 12, 2024 8:01 PM BY THE MARITIME EXECUTIVE

 

After years of downturn and a soft decade through most of the 2010s, the industry trade group BIMCO reports shipbuilding prices are reaching new highs. Overall order prices are up to the highest point since 2008 having increased a further three percent in 2024. The resurgence comes as some sectors have begun to react to emerging environmental regulations while segments such as tankers returned to newbuild after a long drought.

Chief Shipping Analyst at BIMCO Niels Rasmussen points to the resurgence in orders as helping to drive up prices. The global orderbook he highlights has grown by 72 percent since 2020, reaching its highest level since early 2012. It is up a further two percent year-to-date, which Rasmussen highlights as contributing to a 53 percent increase in prices versus the most recent low in late 2020. Shipyards’ global order book currently stands at 133 million Compensated Gross Tonnage (CGT), an increase of 56 million compared to the order book’s most recent low in late 2020. 

“So far this year, the tanker and LNG segments combined have been the main drivers of growth in the global order book,” says Rasmussen. “In addition, the LPG tanker, cruise ship, chemical tanker, and RoRo ship orderbooks have seen double-digit growth. Segments such as cruise began rebounding after the pandemic while LNG is being driven by strong demand and the expansion in Qatar. Tankers had been at a low point due to the prolonged slump in oil markets.

BIMCO highlights that LNG and containerships have accounted for respectively 35 percent and 30 percent of the increase while bulk carriers, tankers, and LPG have accounted for the rest. The orderbook for containerships, however, BIMCO points out peaked during the first quarter of 2023 and has fallen since then although there are expectations that another wave of orders may be coming. Year-to-date, the containership orderbook has fallen 16 percent, as the segment works to absorb its record orders in the past few years. Currently, containerships are deviating from the overall growth trend in shipbuilding orders but the bulk carrier orderbook is also down three percent in 2024.

BIMCO also highlights that the shipbuilding industry was plagued by overcapacity in the last decade between 2010 and 2020. Prices during the 2010s they report only varied +/- 10 percent from the period’s median price. Significant capacity came out of the shipbuilding during the decade which in part has contributed to the longer lead time for deliveries for new orders.

Between 2010 and 2020, Rasmussen calculates that the median order book vs capacity ratio was 2.2, declining to 1.7 during the second half of 2017. Since then, the ratio has climbed from 2.1 in late 2020 to 3.7 currently, the highest since 2010.

This improvement has helped fuel the price increases. The 53 percent price increase in just 3.5 years may seem dramatic says Rasmussen but “it is worth remembering that the average annual price increase between 2010 and 2024 has only been 2.3 percent,” even though manufacturing wages in China have more than tripled.

“Looking ahead, the need to start replacing the large generations of ships built in the 2000s, as well as the need to decarbonize, appear to bode well for future contracting,” says Rasmussen. “Avoiding a massive build-up of shipyard capacity like in the 2000s will be critical if shipyards are to avoid a rise in overcapacity and a scenario where prices fall back to the levels seen in the 2010s.”

This year’s orders have exceeded the forecasts from many analysts who expected a slower pace versus the past few. The South Korean shipyards, however, have reported strong orders while focusing mostly on higher-priced ships and avoiding commoditized segments. HD Korea Shipbuilding & Offshore Engineering for example reported today that it has received orders for a total of 111 ships and one offshore unit, worth $12.11 billion, achieving 89.7 percent of its annual order target of $13.5 billion for 2024.
 

Suez Canal Authority Extends Discounts as Traffic and Revenues Plummet

A sight no longer seen: a Maersk boxship on an Asia-Europe rotation, transiting the Suez Canal (SCA file image)

PUBLISHED JUN 16, 2024 1:53 PM BY THE MARITIME EXECUTIVE

It is now over six months since the Red Sea crisis began and as expected, Egypt’s Suez Canal has taken a hit with the economic impact now becoming clear. Data released this week for last month shows that revenues of the Suez Canal dropped by 64.3 percent to approximately $337.8 million, compared to $648 million recorded in May 2023, according to Egypt’s business newspaper Al-Mal news.

The number of vessels transiting the canal in May also dropped to 1,111, which is lower than 2,396 ships that crossed during a similar period last year. As a result of reduced ship traffic, the cargo volume passing through the Suez Canal dropped by 68.5 percent last month to about 44.9 million tons. In May 2023, the total cargo tonnage was 142.9 million tons.

As the Houthi onslaught on merchant shipping in the Red Sea escalates, major ocean carriers have been forced to avoid the Suez Canal, instead preferring the longer route around Africa.

In February, Egypt’s Finance Minister Mohamed Maait projected that the Suez Canal revenue loss could be absorbed by last year’s stellar performance. The returns during the fiscal year 2022/2023 hit a record-breaking $9.4 billion, representing almost two percent of Egypt’s GDP. However, Maait has cautioned that prolonged tension in the Red Sea could see further revenue loss. This will burden the state treasury, specifically due to rising fluctuations in the exchange rate against the dollar.

Meanwhile, in an attempt to bolster the competiveness of the canal, the Suez Canal Authority (SCA) last week extended fee discounts for a range of vessels on selected long-distance trades. Initially, SCA had introduced the fee reductions back in January, with some discounts as high as 75 percent for product tankers and crude carriers on voyages between Americas and Asia.

The new extension of discount rates will be valid until end of the year, covering 12 categories of ships including bulk carriers, containerships and LNG carriers.

In addition, yachts will also be entitled to a special discount initiative as SCA moves to boost marine tourism in the Red Sea region. This will see introduction of a 50 percent reduction on transit fees for yachts under 300 tons. The promotional measure will effect from July to October and will coincide with the sixth edition of the Egypt International Yacht Show.  

Cargo Volumes Dip at Southern California Ports Despite Strong Outlook

Container volumes declined at California's two large port in May (Port of Los Angeles)

PUBLISHED JUN 13, 2024 4:32 PM BY THE MARITIME EXECUTIV

 

Container volumes moving at the Southern California ports dipped in May despite an overall positive trend and positive outlook. While many U.S. ports reported strong growth in volumes both Los Angeles and Long Beach reported monthly declines after a string of monthly year-over-year gains and bucking the trend which saw the overall U.S. trade gap widening in May.

Announcing a decline of over eight percent for total container volumes in May, the Port of Long Beach said “shifting trade routes and canceled voyages led to a decline in cargo.” Imports slid 4.5 percent to 345,271 TEUs while exports decreased 21.1 percent to 100,885 TEUs, for a total of 695,937 TEU in May. The port has been under 700,000 TEU for four of the first five months of 2024 but it came after a strong 750,424 TEU in April.

“I am confident we will see additional cargo as we work with industry partners to rebuild our market share in this increasingly competitive environment,” said Port of Long Beach CEO Mario Cordero.

The neighboring Port of Long Beach similarly reported an approximately three percent decline in total volumes versus May 2023 to just under 753,000 TEU. Imports were off five percent in May 2023 while the port’s executive director Gene Seroka said the results were “in line with projections,” and emphasized the consistent performance of the past few months. 

The one strong spot was in exports at the Port of Los Angeles which reached a new milestone of 12 consecutive months of year-over-year gains. Exports were up 24 percent in May to nearly 126,000 loaded TEU with Seroka emphasizing they were working with the agricultural community and others to continue the growth.

While forecasts including the National Retail Federation are calling for continued cargo volume growth, the Port of Los Angeles projected June would be consistent with volume “in the mid to upper 700s TEUs.” While they see it as consistent, they expect unlike 2023 when volumes peaked in June 2023, the outlook is for continued growth.

“As we gear up for the second half of the year, our forecast indicates more robust activity on our docks throughout the summer,” said Seroka.

The Port of Long Beach’s CEO Cordero said “I anticipate a moderate increase in cargo as we move into summer.”

For the first five months of 2024, the Port of Los Angeles’ volume is up 18 percent to 3.9 million TEU. It is below the peak levels when the port surpassed 10 million TEU. Similarly, the Port of Long Beach is up 10 percent so far in 2024 having moved more than 3.4 million TEU.

The West Coast ports continue to work to recover volume as the markets softened after the pandemic and experienced labor uncertainties. A year after settling its longshore contracts the Socal ports highlight that they are well positioned. After volumes shifted to the U.S. East Coast and Gulf Coast during the labor uncertainty, the ports may see a reversal after the International Longshoremen’s Association suspended talks on a U.S. East Coast labor contract. They have threatened a strike if there is no agreement by the expiration of the contract on September 30. 2024.
 

Port of Seattle Requires All Homeported Cruise Ships to Use Shore Power

Courtesy Port of Seattle

PUBLISHED JUN 12, 2024 11:55 PM BY THE MARITIME EXECUTIVE

 

 

The Port of Seattle has become the first port in the United States to require that every homeported cruise ship must use shore power. It follows after a similar rule imposed by the state of California, but is the first time that a port has imposed such a requirement independently. 

The port's commission passed the new rule on Tuesday, and it will take effect in the 2027 season. This is three years earlier than anticipated by the port's climate plan. 

“In passing this order, the commission turns the port’s 2030 goal of universal shore power use into a 2027 requirement, which is only possible due to the significant investments made by the cruise industry and the port," said Port Commissioner Fred Felleman. "Marketing such investments should also appeal to the environmental interests of travelers who have chosen to cruise to Alaska."

When cruise ships use shore power, they cut their emissions at berth by about 80 percent, according to the port. This saved emissions equaling about 2,700 tonnes of carbon dioxide in the 2023 season, the port said. 

To make this possible, the port is extending shore power service to Pier 66, and it should be available to cruise ships there as of this summer. With the completion of this project, all of the port's cruise berths will be shore power-capable, six years ahead of schedule. 

The shore power initiative is one aspect of Seattle's "Green Corridor" project with its partner seaports in British Columbia and Alaska. All Seattle-based cruise ships depart for the Inside Passage and Southeast Alaska, calling in either Vancouver or Victoria, and the recurrent port calls make the route amenable for installing and using sustainable fuel infrastructure. 

"We appreciate the leadership shown by the Port of Seattle to move ocean going ships off of fossil fuels by committing to transition 100% of homeported cruise vessels to shore power. And, we call on other ports to follow the leadership of the Port of Seattle to move ports and shipping to a zero-emissions future," said Fern Uennatornwaranggoon, Climate Campaign Director for Ports at Pacific Environment. 

Red Sea Diversions Are Causing Port Congestion in Singapore

File image courtesy PSA Singapore

PUBLISHED JUN 13, 2024 9:27 PM BY THE MARITIME EXECUTIVE

 

As shipping lines divert traffic away from the Red Sea to avoid the persistent menace of Houthi rebel attacks, new routes are reshaping the patterns of marine traffic and port calls around the world. Vessels normally assigned to other trades have been diverted to the core Asia-Europe service lane, which is now thousands of miles longer than before because of the need to circumnavigate Africa. 

One unexpected outcome has been extra demand for bunkering and transshipment at the already-busy port of Singapore, as ships fuel up for a longer haul and offload the cargo that they would previously have delivered to the Mideast on the way to Suez. 

As demand for transshipment rose, Singapore's container volume in the first five months of the year climbed nearly eight percent over the same period in 2023. According to Drewry, Singapore's container terminal utilization rate nearly hit 90 percent in May, a level where productivity often begins to decline because of excess crowding. Drewry director Jayendu Krishna told Bloomberg that boxships are "bunching up" in Singapore and other hubs beause of route and schedule changes, leading to congestion. 

According to tracking service Portcast, delays at Singapore have extended up to seven days, and up to 450,000 TEU worth of containerized vessel capacity was waiting to berth at the port as of the end of May. Terminal operator PSA Singapore is reactivating some of the facilities at its older Keppel Terminal in response to the extra demand, and some container carriers are skipping the port altogether in order to keep their schedules on time. 

"This year, congestion at Singapore Port is primarily caused by ships returning to Asia off-schedule after longer voyages around the African Cape due to the Red Sea crisis and missed weekly sailings," explained Portcast. "The diversions have caused ships to arrive in Asia unpredictably, exacerbating congestion at Singapore’s port."

The disruption in Asian hub ports is helping to support higher container rates, according to Maersk Group. The number-two ocean carrier recently raised its profit outlook for the year, largely because of the effects of congestion and diversion on the supply of container ships. 

The Cape of Good Hope diversions have affected about 90 percent of the container ship traffic that once passed through the Red Sea and the Suez Canal. Each diversion adds about $1 million in fuel costs and 1-2 weeks of voyage time, but saves the shipowner up to one percent of the vessel's value in war risk insurance costs. In a new report released Thursday, the U.S. Defense Intelligence Agency said that the Houthi campaign of anti-ship missile strikes has affected the interests of at least 65 nations, according to DIA, and at least 29 major energy and maritime companies have diverted away from the Red Sea because of the risks. The list of affected countries includes Houthi allies and sympathizers, like Iran, Russia and China. 
 

Pembina nears investment decision for US$4 billion LNG project

Ruth Liao and Chunzi Xu, Bloomberg News   Jun 12, 2024

Pembina Pipeline Corp. plans to make its final investment decision for the proposed Cedar LNG floating gas-export project in British Columbia within two weeks, according to people familiar with the matter. 

The US$4 billion project is expected to be financed 60 per cent from debt and 40 per cent from equity, with partners Haisla Nation and Pembina each contributing 20 per cent of equity, Cedar LNG said in an emailed statement to Bloomberg News.

The financing will also include a $1.5 billion (US$1.09 billion) five-year term loan for a pipeline connecting the Cedar terminal with the nearby Shell-led Kitimat project, according to the people. 

Cedar LNG would be the second Canadian fuel-export project to be financially sanctioned after the Shell-led backers of the $40 billion LNG Canada made their investment decision in 2018.

At least 15 banks will likely participate in financing the project, the people said. Cedar LNG did not comment on the number of banks involved or the timing of a final investment in response to questions from Bloomberg News.

The developers of the project, which also includes the Haisla First Nation, had previously said they were aiming for a final investment decision by mid-2024. Future liquefied natural gas offtake from the proposed 3-million-metric-ton-a-year facility is split between Pembina and Canadian exploration firm ARC Resources Ltd.

The most recent LNG export facility to reach a final investment decision was Abu Dhabi National Oil Co.’s Ruwais LNG project, announced Wednesday.

‘Brazen corruption’: Donald Trump is selling policies for a second term to the highest bidders

Richard Hall and Andrew Feinberg
Thu, June 13, 2024

Donald Trump is increasingly shaping and reversing his policies to match the desires of donors (The Independent/Getty)


Donald Trump is no stranger to a quid pro quo — he was impeached for one, after all. But while campaigning for a second term in the White House, he has gone further than perhaps any other candidate in recent history to shape his policies in return for cash.

Trump is not making these bargains behind closed doors or in smoky back rooms, but at fundraisers and events attended by dozens of influential and extremely wealthy people.

On several occasions he has made explicit offers to reward donors by enacting or dismantling policy on their behalf should he win in November, often reversing his own previously held positions.


Democrat Jamie Raskin, ranking member of the House committee on oversight and accountability, accused Trump of treating the presidency “as a for-profit business enterprise and money-making venture”.

He told The Independent that the former president was “brazenly offering to sell out US policy to any corporate and billionaire campaign donors ready to make a deal, including telling Big Oil he will sign their executive orders in exchange for a cool one billion dollars”.

“Donald Trump will literally sell out the future of humanity for another billion dollars,” he added.

Donald and Melania Trump arrive at the Florida home of billionaire investor John Paulson (Getty)

The Campaign Legal Center, a non-profit watchdog that focuses on campaign finance laws, called Trump’s actions “brazen, quid pro quo corruption”.

"It is deeply concerning and problematic to see a presidential candidate solicit millions of dollars from wealthy donors in exchange for promised policies or actions that cater to the donors’ wishes,” said Saurav Ghosh, the group’s director of federal campaign finance reform.

Ghosh told The Independent that “years of deregulatory court decisions” have fostered a culture of big money in US elections that allows Trump “to act with impunity, pushing legal boundaries or even breaking them outright”.

Trump’s bargaining began almost the moment he left office, and has continued to this day.

Here are the policies he is selling to donors.
$1bn from oil companies

At a lavish dinner at Mar-a-Lago in April, the former president gathered with around two dozen executives from the biggest oil companies in the country. His campaign was facing a sizeable cash shortfall against his opponent, President Joe Biden, and he was desperate to make up the difference.

As the executives complained about how the Biden administration’s environmental regulations were hurting their business, Trump made a starkly transactional pitch: raise $1bn to send me back to the White House.

If he won, he said he would immediately reverse dozens of Biden’s environmental rules and policies. The $1bn would be a “deal” for the companies, he added, because of the money they would save from deregulation.

The account of the meeting, first reported by the Washington Post, came from several people who attended. Among them were 20 executives from ExxonMobil, EQT Corporation and the American Petroleum Institute, which lobbies for the oil industry. It was reportedly organized by oil billionaire Harold Hamm.

Trump speaks to city officials and employees of Double Eagle Energy on the site of an oil rig in Midland, Texas (Getty)

Specifically, Trump vowed to undo a Biden administration freeze on permits for new liquefied natural gas (LNG) exports “on the first day” of entering office, one attendee told the Post.

The meeting prompted a furious response from Democrats in the House and Senate.

Representative Raskin wrote to the CEOs of nine of the oil companies that attended the meeting to demand answers, calling it an “unvarnished quid pro quo”.

He said that reports that oil companies are working on potential executive orders for Trump “suggest that certain oil and gas companies, which have a track record of using deceitful tactics to undermine effective climate policy, may have already accepted or facilitated Mr Trump’s explicit corrupt bargain”.
The crypto president

Trump once called Bitcoin “a scam" and argued that it threatened the supremacy of the US dollar. A few years later, in desperate need of campaign cash, he is pitching himself to Silicon Valley as “the crypto president”.

Trump used the term to describe himself at a fundraiser hosted by tech investors David Sacks and Chamath Palihapitiya at the former’s home in San Francisco this month.

Both Sacks and Palihapitiya have spoken publicly about their investments in crypto, and the event was attended by a number of other notable crypto investors, including executives from Coinbase and twins Tyler and Cameron Winklevoss, who own the crypto company Gemini.

Trump has not always been popular in Silicon Valley. In 2020, the tech industry spent big to make him a one-term president. But this time around, there has been a slight yet notable shift among a certain set of crypto-loving tech billionaires.

Trump once called Bitcoin a scam but is pitching himself to Silicon Valley as a crypto champion (Associated Press)

The crypto industry has spent tens of millions of dollars in an effort to influence the 2024 elections, funneling money to help elect lawmakers who will undo regulatory moves by the Biden administration. The industry hopes that deregulation will lead to huge profits for crypto investors.

Trump’s message appeared to land: He came away with $12m in donations from that fundraiser in San Francisco, and the promise of much more.
TikTok flip-flop

As president, Trump spearheaded efforts to ban TikTok.

“As far as TikTok is concerned, we’re banning them from the United States,” the then-president declared to reporters aboard Air Force One in July 2020.

Indeed, he signed an executive order in his last year in office that would have effectively prohibited the video app, which is majority-owned by a Chinese company. But just this month he joined TikTok himself. And more recently he has spoken out against efforts from both the Biden administration and his own party to regulate it.

On March 7, a House committee advanced a bill that would ban the app if it didn’t divest, even as TikTok users flooded congressional lines with thousands of calls urging lawmakers to back off.

That same day, Trump wrote on Truth Social that “if you get rid of TikTok, (then) Facebook and Zuckerschmuck will double their business,” referring to Meta CEO Mark Zuckerberg.

TikTok supporters protest at the hush-money trial of Donald Trump in New York in April (Associated Press)

“I don’t want Facebook, who cheated in the last election, doing better,” wrote Trump, echoing a baseless conspiracy theory that social media platforms rigged elections against him. “They are a true Enemy of the People!”

What prompted this dramatic change?

Some clues may be derived from the fact that his words came swiftly after a very public rapprochement with Republican mega-donor Jeff Yass. Yass has a $20bn stake in TikTok’s parent company, ByteDance, and is the largest donor in this election campaign cycle.

At the request of Yass, Trump spoke at a conference of the influential right-wing Club for Growth, which the former president previously blasted as “Club for No Growth”.

Yass has given $61m to the group since 2010 but it backed Florida’s Ron DeSantis in the Republican primary against Trump.

At the conference, Trump told donors that he and the organization’s president, David McIntosh, are now “back in love”.
West Bank-rolling

Perhaps the most brazen quid pro quo of Trump’s first term came with a giant donation from casino mogul Sheldon Adelson, the Republican Party’s biggest funder over the past decade.

According to New York Times writer Maggie Haberman in her book ‘Confidence Man: The Making of Donald Trump and the Breaking of America,’ Adelson made a $20m donation to a political action committee to pressure then-president Trump to adopt the highly controversial decision to move the US embassy in Israel from Tel Aviv to Jerusalem.

For his second term, Trump may be poised to sell another controversial policy to the Adelson family.

Sheldon died in 2021, but his wife Miriam has continued his cause and may even surpass Yass to become Trump’s biggest patron in this election cycle.

A New York Magazine profile of Miriam, published last month, suggested that Trump’s support for the Israeli annexation of the West Bank was top of her wish list for a second term.

Miriam Adelson listens as Trump addresses an Israeli American Council summit in Hollywood in 2019 (Associated Press)

The West Bank is considered Palestinian territory and would form the basis of a future Palestinian state. Annexing it would be against international law.

By March, Mrs Adelson had not yet opened her checkbook to fund Trump’s campaign. That month, after he won the Republican primary, he invited her to a Shabbat dinner at Mar-a-Lago, according to the magazine, during which his courting of the donor appears to have begun in earnest. He gave an interview to the Adelson-owned newspaper Israel Hayom in which he described himself as “a very loyal person”.

“I’ve been the best president in history to Israel by a factor of ten because of all the things I do. The embassy, Jerusalem being the capital. Then you have Golan Heights … Nobody even thought that was going to be possible. I did that,” he said.

Ten days after the publication of the New York Magazine profile, Politico reported that Adelson would fund a massive political action committee for Trump’s re-election.
Trickle-up tax cuts

During his presidency, Trump implemented sweeping tax cuts for the top 1 per cent of earners and cut the maximum corporation tax rate from 35 per cent to 21 per cent. His cuts were “one factor helping the fortunes of US billionaires grow by a collective $1 trillion during the pandemic, from March 18 to December 7, 2020,” according to the non-partisan group, Americans for Tax Fairness.

The group said that an analysis of donations to Trump found that he was “enabled with a total of almost a quarter billion dollars in campaign contributions from 134 of America’s billionaires during his short, violent political career”.

Trump is looking to replicate that windfall by promising even more tax cuts for the wealthy, should he win a second term. Several billionaire donors backed off following the riot on January 6, 2021 — they are now finding their way back to Trump, largely thanks to that promise.

Speaking at a donor event at the luxury Pierre Hotel in New York last month, Trump warned the wealthy attendees that taxes would go up unless he wins in November because Biden has vowed to let his tax cuts expire at the end of 2025.

“You’re going to have the biggest tax increase in history,” he said. “So whatever you guys can do, I appreciate it.”

The comments are part of a pattern of offers to wealthy donors from Trump. Donate to me, he says, and I’ll make you richer.

Speaking at Mar-a-Lago in December last year, Trump drew laughs as he described the audience as “rich as hell” before declaring: “We’re gonna give you tax cuts!”

Money has always played a role in presidential campaigns, but the scale and brazenness of Trump’s policy firesale could have a dramatic impact on future elections. If it works, the US government could become even more in thrall to the billionaire class.

IRONY

South Africa Commisions Solar Array for Continent's Largest Coal Port

Port of Richards Bay coal and petroleum terminals (Transnet file image)

PUBLISHED JUN 9, 2024 8:28 PM BY THE MARITIME EXECUTIVE

 

 

In a bid to decarbonize South Africa’s major ports, Transnet National Ports Authority (TNPA) has appointed Amulet Group Consortium to construct and operate its first 20 MW solar photovoltaic plant at the Port of Richards Bay. This project is part of the agency’s plans to install about 100 MW of renewable energy across South Africa’s eight commercial seaports.

The appointment of Amulet Group follows an RFP process that TNPA launched in May 2023. The consortium will be responsible for building and operating the 20 MW solar power and battery energy system at the Port of Richards Bay for seven years. TNPA expects that the design and construction of the plant will begin this month and will be operational by May 2026.

“The introduction of a renewable energy solution in the port system will enable the reduction of carbon emissions and greenhouse gas emissions from coal-generated electricity,” said Moshe Motlohi, TNPA Managing Executive for the Eastern Region ports.

Besides renewable energy, TNPA’s energy mix plans include the use of LNG, micro grids and battery energy storage systems (BESS). The operator is also exploring future use of green fuels such as ammonia or hydrogen in its marine fleet.

Last year, TNPA issued a Request for Information (RFI) for the development of a hydrogen fuel terminal and other related facilities at South African ports. The RFI is intended to assess the feasibility of operating and maintaining an import and export terminal for hydrogen at major South African ports.

Ukraine: A people’s peace, not an imperial peace

Various
6 June, 2024

Links | International Journal of Socialist Renewal



Joint declaration by ecosocialist, anarchist, feminist, environmental organisations, and groups in solidarity with the Ukrainian resistance and for a self-determined social and ecological reconstruction of Ukraine

The Swiss government will hold an international conference for a peace process in Ukraine on 15 and 16 June 2024 on the mountain Bürgenstock, close to Lucerne. The Ukrainian government supports this conference.

This conference is taking place in a decisive phase of the war. For months, the Russian invasion forces have been hitting gaps in the Ukrainian defences and pushing them back, with heavy losses of their own. The Russian leadership has announced a major offensive and is attacking the people in Kharkiv, a city of millions.

We support all steps towards a peace that enables the Ukrainian people to rebuild the country in a self-determined manner. Peace requires the complete withdrawal of the Russian occupying forces from the entire territory of Ukraine. With this in mind, we hope that the peace conference in Switzerland will contribute to the restoration of Ukraine’s sovereignty.

The conditions for this are extremely difficult. The representatives of the Putin regime regularly declare that they do not recognise an independent Ukraine and deny the existence of the Ukrainian people. The Putin regime purses a Great Russian project, subjugates the people in the occupied territories with terror and aims to eradicate the Ukrainian culture. The ruling regime in Russia regularly commits war crimes against the Ukraine population.

The full-scale Russian invasion of Ukraine, launched on 24 February 2022, not only calls Ukraine’s independence into question. It also encourages other authoritarian regimes to threaten neighbouring populations, occupy territories and massively expel people. In order to avoid resistance at home, the Russian army is now also recruiting people from neighbouring countries and the Global South to serve as cannon fodder.

Due to the massive – and surprising – resistance of the Ukrainian population, the governments of Europe and North America began to support the Ukrainian army in its defence against the Russian occupying forces. However, they are backing Ukraine to assert their own interests in the global imperialist rivalry. The US aim to weaken its Russian counter part while showing strength against rising China and setting the pace for the European powers which are both partners and rivals. But despite the US Congress finally approving a comprehensive aid package for Ukraine on 20 April 2024, which had been blocked by the Republican Party for nine months, the support for Ukraine has always remained selective and insufficient.

Similarly, the economic sanctions that have been imposed by the EU and US governments against Russia and the exponents of the Putin regime are selective, inadequately targeted, and insufficient. They do not prevent Russia from continuing to export oil and gas, along with other strategically important raw materials, to fill its war chest. Some European countries have even significantly increased their imports of LNG from Russia since the start of the war. Others, such as Austria, obtain over 90% of their natural gas imports from Russia. The governments of these countries are forcing gas consumers to finance Putin’s war against the Ukrainian population.

The Swiss government, the host of the peace conference, has not only been giving tax breaks to Russian oligarchs for decades, it has also refused to confiscate the assets of these oligarchs since the start of the full-scale Russian invasion. As a major hub of international commodities trading, Switzerland has offered Russian capital excellent opportunities to acquire wealth for many years. Many bourgeois politicians have gladly welcomed these businesses in Switzerland. Through the sale of dual-use products, Switzerland contributes to equipping the Russian war machine. And finally, the Swiss financial sector facilitates the trade of Russian oil.

Both in the US and in Europe, there is a growing number of voices in the political and economic establishment who want to tie their support for Ukraine to certain conditions. They aim to pressure Ukraine to cede large territories and several million people to the Putin regime. Such a peace, enforced by major imperial powers, would strengthen the Putin regime and fail to provide a basis for a lasting democratic reconstruction of Ukraine.

We need a peace that is based on, as well as supported by, the interests of the people and of workers in Ukraine and Russia. Such a perspective can only succeed if trade unions, women’s organisations, environmental initiatives and various civil society organisations from both Ukraine and Russia play a leading role in the peace talks.

Occupation is a crime! We are guided by the principles of self-liberation, emancipation, and self-determination of working-class and all oppressed peoples beyond geopolitical considerations. In this sense, we also stand in solidarity with the Palestinian people, who have been fighting for their self determination for decades. Likewise, we support the Kurdish and Armenian peoples and all other peoples threatened by occupation, national and cultural oppression.

Based on our positioning, supporting the Ukrainian resistance against the Russian occupation, we want to contribute to developing a common European perspective for radical socioecological reforms and ultimately for an ecosocialist transformation of the entire European continent in global solidarity.

By submitting this declaration for discussion, we want to contribute to a transnational process of understanding and political clarification among those left-wing forces throughout Europe and beyond that share these important convictions.
12 principles for a just peace in Ukraine within a Europe based on solidarity and ecology

We, the undersigned organisations and initiatives, want to promote a peace process that adheres to the following 12 principles.Achieving a socially just and ecologically sustainable peace requires the unconditional and complete withdrawal of Russian occupying forces from Ukraine, returning the entire territory to its internationally recognized borders.
Russia is systematically destroying cities, infrastructure, and the environment to demoralise the population and trigger a large wave of refugees. Against this daily terror, we demand that the “Western” governments support Ukraine in protecting its population and infrastructure against the bombing and missile attacks of the Russian occupying power. We are in favour of massive humanitarian, economic and military support for Ukraine from the rich states in Europe. The Ukrainian population urgently needs protection from Russian bombs and rockets.
We oppose attempts by “Western” governments, NATO and EU exponents to pressure Ukraine into making massive concessions to the Russian occupying power. We oppose the idea that Ukraine must cede several million people to the Putin regime. It is only up to the Ukrainian people to decide how to confront this atrocious situation of ongoing and possibly in creasing occupation. We support the armed and unarmed resistance of Ukrainians against the Russian occupying power.
We demand that all Russians who refuse military service be granted secure residence status in the countries of Europe and North America. Mass desertion is important to weaken the Russian war machine.
We support the political struggle of Ukrainian trade unions, women’s organisations, and environmental initiatives against the neoliberal anti-labour policies of the government under President Volodymyr Zelenskyy. These policies undermine Ukraine’s socially broad-based defence against Russian occupation and render a socially just and ecologically sustainable reconstruction impossible.
We stand in solidarity with the anti-war movement, democratic opposition, and independent labour struggles in Russia. We also stand in solidarity with the oppressed nationalities in Russia who suffer particularly badly from the war and fight for their self-determination. It is their youth that is being exploited as cannon fodder by the Putin regime. These movements are a key factor for achieving a just peace and a democratic Russia.
Russia has imprisoned numerous people from Ukraine as political prisoners. Many have been sentenced to decades in prison and penal camps. We demand their unconditional release. We demand that the International Red Cross be allowed to maintain regular contact with all prisoners of war. The exchange and release of prisoners of war is a prerequisite for any just peace.
Russia must pay reparations to the Ukrainian people. The oligarchs of Russia and Ukraine must be expropriated. Their assets must be made available to the reconstruction of Ukraine and, once the Putin regime falls to the democratic development of Russia.
We demand that the “Western” governments immediately cancel Ukraine’s debts. This is a crucial condition for the sovereign reconstruction of the country. The rich states of Europe and North America must set up comprehensive and broad based support programmes for the Ukrainian people and the reconstruction of the country. This reconstruction must take place under the democratic control of the population, trade unions, environmental initiatives, feminist organisations and organized neighbourhoods in the cities and villages.
We oppose all projects of the European and Northern American governments, as well as international organisations, to impose a neoliberal economic agenda on the Ukrainian people. This would prolong and deepen poverty and suffering. We also denounce all efforts to sell off the property and assets of the Ukrainian population to foreign corporations. The recovery and reorganisation of agriculture, industry, energy systems and the entire social infrastructure must serve the socio ecological transformation of Ukraine, not the supply of cheap labour, grain and hydrogen to Western European countries.
An effective military support of Ukraine does not require a new wave of armaments. We oppose NATO’s rearmament programmes and weapon exports to third countries. Instead, the countries of Europe and North America must provide the weapons from their existing, huge arsenals that will help Ukraine to defend itself effectively. In this sense, we demand that the arms industry should not serve the profit interests of capital – to the contrary, we want to work towards the social appropriation of the arms industry. This industry should serve the immediate interests of Ukraine. At the same time, for social and urgent ecological reasons, we underline the imperative of democratically converting the arms industry into socially useful production on a global scale.
We want to initiate a debate on a radical reorganisation of Europe. We want to contribute to developing a common European perspective for radical socio-ecological reforms, and ultimately for a fundamental ecosocialist transformation of the entire European continent in global solidarity. Within this framework, we support the will of the Ukrainian people to join the EU, even though we reject the EU’s neoliberal foundations that impoverish millions of people and promote unequal development in Europe. We take the perspective of an accession of several countries in Eastern Europe and South East Europe as an opportunity to reflect together on how such a radical socio-ecological change can be initiated throughout Europe, including a common energy strategy, ecological industrial conversion, pay-as-you-go pension systems, social labour regulation, solidarity-based migration policy, interregional transfer payments, and military security along with the conversion of the armaments industry. Trade union, feminist, ecological, anti-authoritarian left and socialist forces in Eastern Europe should play an important role in this debate.

This declaration has been launched jointly by Sotsialnyi Rukh (Social Movement) in Ukraine, Posle Media Collective in Russia, Bewegung für den Sozialismus / Mouvement pour le Socialisme and solidaritéS – mouvement anticapitaliste, féministe, écosocialiste in Switzerland, emanzipation – Zeitschrift für ökosozialistische Strategie (DE, AT, CH). All interested organisations, groups, initiatives, and media collectives are invited to spread and sign this declaration by 14 June. Please send confirmations of your signing to: Joao_Woyzeck@proton.me and redaktion@emanzipation.org

ECOCIDE 

South Korea Opens New Frontier Region to Offshore Drilling

iStock

PUBLISHED JUN 3, 2024 4:28 PM BY THE MARITIME EXECUTIVE

 

South Korea's government has opened the door to drilling for oil and gas E&P off the country's eastern coastline, launching what could be a strategic new source of energy for Asia's fourth-largest economy. 

The prospect off the coast of Pohang could contain up to 14 billion barrels equivalent of oil and gas, according to President Yoon Suk Yeol. This is enough to supply four years of national oil consumption and 29 years of gas demand. It will be explored by American consultancy Act-GEO for Korea's Ministry of Trade, Industry and Energy, with a budget of about $360 million. 

The objective of the campaign is to prove out the frontier region's potential by mid-2025. With leasing, permitting and the FEED process, any production could take up to a decade to bring online. 

South Korea imports about 90 percent of its carbon-based energy, including 98 percent of its natural gas; it ranks in the top five importing nations for both LNG and crude. New domestic production would allow it to reduce its dependence on foreign suppliers. It would also potentially reduce a key source of demand for globally-sourced LNG, freeing up volumes that could supply other top consumers like the EU and Japan. 

While the prospects of the new offshore region are far from certain, Yoon's announcement sent the stock prices of Korean gas companies soaring as investors scrambled to capitalize on the new opportunity. Shares in Korea Gas Corp. rose 30 percent in a day, the maximum allowed by exchange rules. SK Gas briefly jumped by 29 percent, then closed the day at a still-healthy increase of seven percent. 

 

Wärtsilä Solutions to Minimize Emissions of Two New CMA CGM Ferries

Wärtsilä will supply the engines, fuel supply system and thrusters for two new Ropax ferries being built for French operator La Méridionale, a subsidiary of CMA CGM ©Stirling Design International

PUBLISHED JUN 7, 2024 1:39 PM BY THE MARITIME EXECUTIVE

 

[By: Wärtsilä]

Technology group Wärtsilä will supply the engines, fuel gas supply system and thrusters for two new Ropax ferries being built for French operator La Méridionale, a subsidiary of CMA CGM. The vessels, which have been specifically designed to minimise emissions, are to be built at the China Merchants Jinling Shipyard (Weihai) Co., Ltd., and will operate between Marseille and Corsica. The order with Wärtsilä was booked in April 2024.

Ferries are on the front line of the energy transition and are among the first sectors to target net zero-carbon operations. However, ferry operators face increasing pressure from customers who continue to expect a fast and cost-efficient service, which runs to a timetable, and is increasingly sustainable. Ferry operators, such as La Méridionale, are looking to leverage technologies which offer minimal service disruption and to maximise return on investment, all while reducing carbon footprint.

“The design of these two Ropax vessels reflects our commitment to reducing the carbon footprint within our own fleet. These will be among the most energy-efficient, low-emission ships in operation globally, and we value the support from Wärtsilä, whose technology and solutions help make this ambition possible,” says Xavier Leclercq, Vice-President, CMA Ships, CMA CGM.

The company will continue its efforts to reduce the environmental impact by adopting LNG as the primary fuel for the new ships as well as preparing them to operate on alternative fuels such as biogas and synthetic methane, as these become available at scale.

For each ship, Wärtsilä will supply two 12-cylinder, one 10-cylinder and one 8-cylinder Wärtsilä 31DF engines. The two ferries will benefit from Wärtsilä’s groundbreaking NextDF technology, which will be implemented in the Wärtsilä 31DF engines. Whilst operating on LNG, the NextDF version of the Wärtsilä 31DF further reduces methane emissions and nitrogen oxide (NOx) significantly (compared to the already emission-efficient standard Wärtsilä 31DF). The scope of Wärtsilä’s supply for this contract also includes the Wärtsilä LNGPac, a fuel gas supply system for LNG-fuelled ships, as well as Wärtsilä’s thrusters.

“The drive towards net zero emissions is one of the most important challenges facing the industry today,” comments Stefan Nysjö, Vice President of Power Supply, Wärtsilä Marine. “That’s why we are pleased to support our long-standing partners, CMA CGM and China Merchants Jinling Shipyard (Weihai) Co., Ltd., with our integrated solutions – ensuring these ferries are able to benefit from outstanding fuel efficiency, operational reliability and a significant reduction in GHG emissions.”

The 180-metre-long ships will be able to accommodate 1,000 passengers as well as cargo freight. The Wärtsilä equipment for these ferries is scheduled to be delivered in mid- 2025, with the ferries expected to enter service during the first half of 2027, operating between Marseille and Corsica.

The products and services herein described in this press release are not endorsed by The Maritime Executive.

 

Study: Tanker Sector's Profits Could Fall by a Third Due to Climate Action

iStock

PUBLISHED JUN 5, 2024 4:52 PM BY THE MARITIME EXECUTIVE

 

 

In a new report, researchers at University College London and the Kuhne Foundation predict that the tanker and gas carrier segments will see their profits drop by as much as $200 billion over the next 25 years if the global economy achieves the Paris climate targets - even if all newbuild orders end. This amounts to a third of the profits that tanker companies could earn over the same period under a business-as-usual climate action scenario.  

The research team set out to look at the ownership structure, asset value and transport capacity of the global tanker fleet, and how well utilized it would be under future climate scenarios. In particular, they sought to determine how much overcapacity there might be if the global economy reduces fossil fuel consumption, and the resulting impact on tanker owners' profits and asset values. 

The team found that LNG, LPG and crude tankers may be oversupplied in decades ahead if the global economy cuts fuel consumption enough to meet the Paris Agreement's 1.5 degree Celcius warming trajectory. The cumulative lost profits (compared to a scenario in which the global economy does not decarbonize) could amount to up to $214 billion by 2050, even if there are no more newbuild orders. If more tankers and gas carriers continue to be ordered and built, lost profits could rise to as much as $286 billion by 2050. 

"The results are quite chilling for oil and gas tankers," explains Marie Fricaudet, who led the research at UCL. "In a scenario where newbuilding of ships continues until 2030, about 37 percent of their expected profits would fail to materialize."

If demand and day rates drop, the book loss from falling vessel asset values could amount to as much as $108 billion by 2030, or as much as $147 billion if the orderbook continues to grow. 

Simultaneously, this decline in tanker activity would cut the cumulative CO2 emissions of the maritime industry by 1.3-2.0 billion tonnes by 2050. This would help keep shipping within the 12 billion tonne carbon budget the industry would need to meet if it wants to achieve a 1.5 degree Celcius trajectory. 

Other demand-side factors in the changing energy market - like regionalized production and reduced shipping distances - could further reduce tanker activity. On the other hand, there is also the possibility that more these vessels will keep sailing if they find a way to switch cargoes. Coal-carrying bulkers could readily switch to other dry bulk commodities, the authors noted. Tankers may also be convertible to new liquid fuels, subject to technical limitations, and these adaptations to a new green-fuel landscape might offset the lost profits of a decline in the traditional wet bulk trades. 

"Our forecast, even if only indicative, should prompt investors and shipping actors to evaluate their climate risks and redirect investments. The transport sector must play a role in transitioning to a low-carbon society, with capital shifting to sectors aiding this transformation," said Stefanie Sohm of the Kuhn Climate Center.