It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Monday, October 23, 2023
Nuclear-Powered Cargo Ship is a Suspect in Baltic Pipeline Breach
Sevmorput, the last nuclear-powered cargo ship and one of the last LASH carriers (Rosatomflot file image)
A Chinese container ship and a nuclear-powered cargo ship have attracted investigators' attention after damage to a subsea gas pipeline in the Baltic. Both appear to have been in the wrong place at the wrong time, according to AIS data.
The first suspect is the Chinese boxship NewNew Polar Bear, which recently transited the Northern Sea Route, making headlines for the crossing. The other ship is the Russian government-operated LASH carrier Sevmorput, the last nuclear-powered cargo vessel in the world.
On Wednesday, the two vessels were named by Finland's National Bureau of Investigation as subjects of an inquiry into the cause of the pipeline breach, along with other unnamed ships.
An open-source analysis of AIS data (above) suggests that Sevmorput crossed over the pipeline at about 0112 on the morning of the 8th, followed by NewNew Polar Bear a few minutes later. This was about the same timeframe as a faint seismic event in the area, which was detected by a Finnish monitoring station and classed as a "possible explosion" or a large gas release.
An ROV investigation found evidence of "mechanical impact or mechanical destruction" of the pipeline, according to Estonian authorities. The exact cause is still under investigation.
NewNew Polar Bear has been under surveillance ever since. According to Reuters, the Norwegian coast guard vessel KV Sortland tracked the Chinese boxship as it headed northward past Norway's offshore oil and gas fields.
In Estonia, Finland and Sweden, authorities suspect that the pipeline breach and simultaneous cable damage were likely caused by sabotage.
As recently as April, Russia threatened to take "military-technical" measures to penalize Finland for joining NATO. Charly Salonius-Pasternak, a researcher at the Finnish Institute for Foreign Policy, told German outlet Tagesschau last week that "the list of states in the region that have the opportunity, motive and ability to carry out something like this is quite short. There's only Russia."
10 Years and $330B Later, What Has China's Belt and Road Achieved?
Ro/ros at the Chinese-built and -operated port of Hambantota, Sri Lanka (CM Ports)
China’s Belt and Road Initiative, which is celebrating its 10th anniversary this week, has now advanced more than US$330 billion, which is about 80% of the lending of the World Bank over that period.
The BRI mainly lends to infrastructure projects, while the World Bank increasingly focuses on ‘capacity-building’ projects, such as education and agriculture reform, but both are operating in the same field of development lending.
It is less widely appreciated that China is also competing with the International Monetary Fund, in providing liquidity or ‘lender of last resort’ finance, principally through its central bank, the People’s Bank of China.
A World Bank working paper published earlier this year estimated that US$170 billion had been used to provide liquidity support across 128 rescue lending operations to 13 countries, using currency ‘swap’ arrangements set up since 2009.
In addition to the swap financing, the World Bank study establishes that China’s state-owned banks have provided a further US$70 billion in balance-of-payments support to troubled BRI borrowers. This lending and the swap arrangements amount to about 20% of IMF liquidity support over the past decade.
With both the BRI and the liquidity backstop operations of the PBOC, China is turning its chronic and massive balance-of-payments surpluses to its geopolitical advantage.
Unusually among developing nations, China has built up huge foreign exchange reserves, thanks to its model of export-led growth, so it has money to lend. It also has expertise and spare capacity in building infrastructure.
China has attracted representatives of 130 nations to its BRI forum being held in Beijing this week, after the IMF and World Bank meetings held in Marrakech last week.
Currency swap arrangements among central banks were pioneered by the US Federal Reserve at the peak of the 2008–09 global financial crisis, when global liquidity in US dollars almost disappeared. They were designed to ensure that US currency was available for international transactions.
The PBOC followed suit and now has a total of US$570 billion in bilateral swap arrangements (including one with the Reserve Bank of Australia for A$40 billion). While these were initially seen as a means of facilitating trade in renminbi, they are increasingly being used to assist BRI borrowers facing financial difficulty.
The biggest users of the country’s liquidity supports have been Argentina, Mongolia, Pakistan and Suriname. Egypt, Nigeria and Russia have also tapped these facilities multiple times.
Argentina, which established a US$19 billion swap with the PBOC in 2009, tapped it in both July and August this year for a total of US$3 billion to meet a scheduled repayment on a 2018 IMF loan.
Argentina was in desperate straits. It had negotiated a new US$44 billion loan from the IMF and was due for a US$7.5 billion disbursement, but it had exhausted its foreign exchange reserves, had no funds to meet the repayment on the earlier loan and had no access to private banks.
The IMF will not lend anything to a country that falls into arrears and nor will the World Bank. By using the swap agreement with China to meet a repayment on the old IMF loan, Argentina was able to keep the new IMF loan alive and, when the US$7.5 billion disbursement was finally made, the first use of the funds was to repay the PBOC.
Argentina was in a position to use the swap agreement because its finance minister, Sergio Massa, had travelled to China in May and negotiated to double the portion of the swap line over which Argentina had complete discretion to US$10 billion.
Reuters quoted the former head of the IMF’s western hemisphere department, Alejandro Werner, saying the deal demonstrated how ‘much more agile Chinese external financial diplomacy can be, and it’s an additional virtue that countries see in maintaining a constructive relationship with China’. It’s unthinkable that the US Federal Reserve would countenance its swap arrangements being used in this way.
The geopolitical advantage that China gains from this transaction may prove ephemeral. The frontrunner in next week’s Argentine elections, the conservative populist Javier Milei, has said that if he wins he will freeze relations with the Chinese government, which he described as an ‘assassin’, and adopt the US dollar as the country’s currency.
China has often been accused of recalcitrance in negotiating the restructure of debts of troubled borrowers. The central issue has been that China won’t accept writing down the value of debts when the IMF and the World Bank also refuse to do so.
China sees the IMF and the World Bank as essentially Western institutions and as its peers in supporting poorer nations. Although China is a member of both funds, their governance is dominated by the Western nations. The managing director position of the IMF is reserved for a European, while the World Bank president is always an American.
China’s voting share in the IMF is less than Japan’s and a third of that of the United States. The US voting share gives it sole veto rights over major IMF decisions. Last week’s IMF and World Bank meetings agreed to an increase in contributions, but the US rejected any increase in China’s share.
The IMF and the World Bank, as a matter of principal, won’t accept any losses on their loans, although they insist that commercial lenders and other national development banks should do so. China has demanded equal treatment with the IMF and the World Bank.
A prolonged impasse on this point over Zambia’s debts was resolved last year with an agreement on an interest-rate grace period and extended repayment terms, rather than writing down the value of the debt.
China last week surprised Sri Lanka’s Western creditors and the IMF by being the first to strike a deal over the rescheduling of debt. The agreement is expected to defer payments on US$4.2 billion of debt to China. Other creditors must also agree to debt restructuring before the IMF will release funds from a US$2.9 billion facility.
The World Bank notes that Chinese loans differ from IMF loans by being opaque, carrying relatively high interest rates, and being offered exclusively to BRI borrowers.
‘China has developed a system of “Bailouts on the Belt and Road” that helps recipient countries to avoid default, and continue servicing their BRI debts, at least in the short run,’ the paper says.
The paper says China’s role as an international crisis manager is similar to that of the US Treasury during previous Latin American debt crises and the European Union’s stability mechanism that was deployed during the Greek debt crisis in 2010. It helps to avert or resolve defaults by highly indebted borrowers. Its financing is more like ‘bridging finance’, than the extended support provided by the IMF.
The geopolitical advantage gained by China from its international lending is hard to assess. A study by a US-based research institute, Aiddata, examined more than 13,000 BRI projects and found that 35% had implementation problems, such as corruption, labour conflicts, environmental problems or public protest.
However, the same study notes that China is an active financier of infrastructure in low-income countries that struggle to obtain funding from anyone else.
David Uren is a senior fellow at ASPI.
This article appears courtesy of ASPI's The Strategist and may be found in its original form here.
CO2 Storage for Port of Rotterdam Industry Gets Go-Ahead
Industrial operations in the Port of Rotterdam have contracted for carbon storage in the Porthos project (Port of Rotterdam file photo)
The final investment decision has been taken giving the go-ahead to the Netherlands’ first CO2 storage project, which is also slated to be the largest carbon capture and storage project so far for Europe. The project focuses on industrial operations in and around the Port of Rotterdam and is expected to reduce carbon emissions in the port area by 10 percent annually when it becomes operational by 2026.
Known as Porthos, the project is a partnership between EBN, Gasunie, and the Port of Rotterdam. It will require a total investment of more than $1.3 billion, but unlike other CO2 capture projects, it has already fully contracted its storage capacity. Among the companies it will be working with are Shell, ExxonMobil, Air Liquide, and Air Products. Each of the companies has committed to storage contracts and will commit their capital for investments to capture CO2 from operations and deliver it to the Porthos compressor station which will be located in the Port of Rotterdam.
After confirming that they have decided to proceed with the project, it was reported that Porthos has already given its first contract as part of the construction which is scheduled to start in 2024. They awarded a $32 million fabrication contract for Corinth Pipeworks of Greece for the steel pipes that will be used to connect the compressor station to a depleted gas field and platform in the North Sea.
The platform is located approximately 12 miles off the coast of the Netherlands. The storage site will be approximately two miles under the seabed. Porthos plans to store about 2.5 million tonnes per year with an expected life of 15 years. They have commitments for the 27 Mtons of capacity, but they noted that the onshore transport system is designed to allow for future CO2 storage projects.
Carbon capture is set to play a significant role in the Netherlands’ plan to reduce emissions. The government has announced a target to bring carbon emissions down by more than half by 2030 compared to its 1990 levels. The European Union recognized Porthos as an important project contributing to meeting climate targets. The EU is providing $108 million in subsidy to the project.
The Netherlands joins neighboring Denmark which is also moving forward aggressively with carbon capture and seeking to launch the first commercial cross-border storage effort. In March, Denmark achieved several firsts, including the first injection of CO2 for storage below the seabed in the North Sea, as well as becoming the first to achieve cross-border carbon capture and storage. The demonstration project captured CO2 in Belgium and delivered it to Project Greensand, which completed the injection. By 2025/2025, Project Greensand also located in the North Sea expects to be storing up to 1.5 million tonnes of CO2 per year.
HD Hyundai to Expand Digital Automation to Improve Shipyard Productivity
HD Hyundai will expand digitalization to increase productivity with a smart shipyard (file photo)
South Korea’s largest shipbuilding conglomerate, HD Hyundai’s HD Korea Shipbuilding & Offshore Engineering Co. plans to accelerate the deployment of digital automation to improve shipyard productivity and address the pressing lack of labor to meet the company’s order backlog. It is part of a series of steps the company is taking toward its goal of becoming a “smart shipyard” by 2030.
Like all the major Korean shipbuilders, KSOE has been under pressure to improve operating margins and lower costs as it seeks to achieve consistent profitability from its shipyard. The three major shipbuilders, Hyundai, Samsung Heavy Industries, and now Hanwha Ocean, are also faced with a lack of skilled labor and have been pressing the government to increase training programs and the number of visas for foreign workers to fill projected long-term labor concerns.
Each of the shipyards is also exploring automation. Hyundai reports that its efforts are expected to help cut costs, reduce inefficiency, and sharply boost productivity.
HD Hyundai has signed a new agreement with German engineering and technology company Siemens to accelerate the development of a digitalized automated production system expanding on current initiatives. The effort will focus on developing a platform to innovate in all aspects of shipbuilding from the design to manufacturing of vessels.
They expect the first step will be the introduction of robots for steel plate molding and welding at Hyundai Mipo Dockyard's shipyard located in Ulsan. They expect to roll this system out by 2025 along with a cyber system for design.
Demonstration of the automatic welding technology (Hyundai Samho Heavy Industries)
As part of the automation efforts, the company also staged a demonstration of its automatic welding equipment today, October 18, at the Hyundai Samho Heavy Industries yard. The demonstration was held for partners and researchers including the Small and Medium Shipbuilding Research Institute. Hyundai Samho Heavy Industries plans to introduce the automatic welding equipment being used in the field to its external partners and support related technologies in the future for the introduction and expansion of automated processes.
Working with Siemens, they will also combine their existing digitalized automated production system with a next-generation design platform being developed by HD Hyundai Heavy Industries and Hyundai Samho Heavy Industries.
They expect the digital platform will be a key step in streamlining the shipbuilding process from design to manufacturing. The automated production system will provide a unified platform to manage data on vessel design and output and create a digital twin usable by all HD Hyundai shipbuilding affiliates.
China Hires Thousands of People to Solve a Seaweed Problem
“This year’s seaweed control work is officially complete!”
In 2023, the smallest amount of seaweed washed up on Qingdao’s beaches since records began in 2007, the local authorities stated on 3 August. That record did not come easy: the government says more than 8,000 people spent two months controlling the seaweed that forms offshore of this east-coast port city.
This is the 17th year in a row that the Yellow Sea has been affected by seaweed blooms. Normally appearing in late spring and lasting for three to four months, they damage the local marine ecosystem and affect shipping and tourism. At its greatest extent, this year’s bloom covered 61,159 square kilometres – one-quarter the size of the United Kingdom.
Current approaches to the blooms include reducing the number of aquaculture rafts on which the seaweed forms, fishing it out from the ocean, and removing it from beaches. Experts say that while these have proved effective, it would be better to reduce the flow into the ocean of the land-based pollution and fertiliser that feed the blooms. To do this requires an integrated land–ocean approach, they add.
Why do green tides form?
The Qingdao blooms are formed of a green algae called Ulva prolifera. It has one main stem with numerous fronds and can reach one metre in length. Highly adaptable, the seaweed can spread quickly in the right conditions, forming green tides.
Ulva prolifera is not toxic itself, but blooms can be hazardous. Massive blankets of algae block sunlight from entering the ocean and deplete oxygen levels, suffocating marine life.
If left to rot at the coast, the seaweed produces large amounts of ammonia and releases sulphides into the seawater, creating a foul stench. This has caused die-offs of farmed sea cucumber and abalone, with huge economic losses to farmers. It gets in the way of shipping as well as swimmers and sunbathers, posing challenges for tourism.
According to the Science Times, a newspaper affiliated with the Chinese Academy of Sciences, Ulva prolifera has lived in the ocean for 2.5 billion years. Until relatively recently, it washed up on Qingdao’s shores in small quantities that did not trigger mass concern. But things have changed due to global warming, which makes the water temperature more conducive to the seaweed’s growth. Another contributing factor is the increase in nutrients entering the water due to human activity.
The latter is explained by the industrialisation and urbanisation of eastern China over the past few decades, which generally leads to increasing amounts of wastewater and agricultural fertiliser reaching the ocean via rivers. This creates conditions in which Ulva prolifera will flourish.
Scientists have been working to identify the source and causes of the algal blooms since they began in 2007. In 2017, researchers from the Institute of Oceanography, Chinese Academy of Sciences and other research bodies declared the source to be seaweed farming rafts off northern Jiangsu, just south of Qingdao. The findings were disputed by some experts in Jiangsu.
The area is a major producer of edible seaweed. Traditionally, the seaweed-farming season starts in October when rafts, nets and ropes are put in the water. Ulva prolifera clings onto these and gradually starts to grow. When the temperature hits 20C in spring, it even starts to crowd out the commercial crop, forcing aquaculture farmers to manually remove it and dump it on beaches. Some seaweed also ends up in the water at the season’s end in April/May, when the rafts are dismantled. It drifts north with the prevailing currents and winds, growing rapidly until it makes landfall in Shandong.
How to tackle green tides?
Currently, physically removing the algae using nets is the most common control method, but this is labour- and resource-intensive.
This year, 3,200 fishers worked solely on removal while living at sea for 50 days starting in June, according to the Qingdao Daily.
Each boat drops and drags a net through the water until it is full of algae, then hauls it back and empties it on deck, before beginning the process again. The “catch” is then packaged up for transfer to another vessel, which takes it to land for processing.
Satellite monitoring and predictive modelling are helping researchers to more accurately gauge where seaweed is drifting, so boats can be dispatched more effectively. This was one of the reasons the amount reaching land this year set a record low, greatly reducing the amount of work needed there. Even so, Qingdao still had 4,800 people involved in removing algae from beaches, cleaning it and transporting it away, at no doubt considerable cost.
Wang Songlin, president and founder of the Qingdao Marine Conservation Society, points out that May to August is both the closed season for fishing in the Yellow Sea, and the key period for keeping seaweed under control. Thus the government’s employment of fishers during their off season – particularly the artisanal fishers who work in these waters – actually benefits both the environment and the local economy.
However, plucking the weed from the water before it makes landfall in Qingdao is merely the last line of defence. Since 2018, the Ministry of Natural Resources has been overseeing a joint effort between Jiangsu and Shandong to control the problem by focussing on Jiangsu’s aquaculture rafts.
Local governments in northern Jiangsu have shaken up seaweed aquaculture, shutting down illegal operations and reducing the extent and intensity of the area’s seaweed cultivation. Meanwhile, seaweed raft numbers have been capped, chemical algae killers are being used, aquaculture equipment is being removed from the water earlier, and new, specially coated ropes are in place; these efforts aim to reduce the likelihood of Ulva prolifera appearing and growing on the rafts.
Researchers say that while many chemicals can be used to stop the seaweed cheaply and effectively, this approach is likely to create secondary pollution and other new problems. Scientists are therefore looking into natural substances that might have the same effects, but more research and feasibility studies are needed.
The benefits of the coated ropes are also not yet clear. A Jiangsu industry association has said that over 25% of the ropes used during the city of Nantong’s 2021-2022 seaweed season were coated, but the benefits were not as significant as hoped.
A 2018 study by the Qingdao Ocean Science and Technology National Laboratory suggests that collecting seaweed in the waters of Jiangsu before it grows, combined with adaptations to aquaculture rafts, would more effectively prevent Yellow Sea blooms.
If the sea gives you lemons…
Given that some seaweed can be eaten, how about adding Ulva prolifera to the menu?
According to the Qilu Evening News, one Qingdao restaurant did just that in 2013, drawing in diners after collecting the algae from the rocks. But, the outlet reported, washing the sand off proved time-consuming and experts warned that seaweed can absorb heavy metals wile adrift at sea.
Companies have been trying to commercialise Ulva prolifera, but things have not gone smoothly. According to China Youth Daily, an algae noodle production line established in 2009 had to be shut down after it proved impossible to effectively store the product. A year later, two Fudan University professors successfully converted Ulva prolifera into biofuel, but the laboratory process was never commercialised.
Making use of the algae would offset collection costs. However, the algae “season” only lasts two or three months, which further complicates commercialisation.
Currently, Qingdao dries and compresses its salvaged ocean algae before sending it to one of two processing bases for conversion into organic fertiliser and other products. This year, nine drying lines were added to double output. Seaweed collected from the beach, however, is of less value due to its sand and grit content and is almost all burned in waste-to-power plants.
Even these efforts do not completely fund the collection work. A company official once admitted that their operations wouldn’t be profitable without government investments.
Professor Liu Tao of the Ocean University of China carried out an Ulva prolifera cost–benefit analysis. He found that, even when ignoring the seasonality of supply and the resulting intermittent use of processing facilities, the low-value products produced, such as fodder and fertiliser, didn’t make enough money to offset collection, transportation, processing and production costs. However, he concluded that using the algae as a raw material for drugs and healthcare products would significantly increase returns.
Not just a Chinese problem
Algal blooms occur in many places around the world. The coast of Brittany, in France, has been plagued by them since the 1970s, resulting in significant damage. In the US, the first such bloom was recorded 20 miles off the coast of Long Island, in 1983. According to a New York Times report, bathers complained of bright green water and were “freaking out”. The algae returned the following year, hitting the New Jersey coast. Blooms have also been experienced in Japan, in the bays of Tokyo, Osaka, Hiroshima and Hakata.
Those incidents weren’t necessarily caused by Ulva prolifera, but by other macroalgae of the Ulvaceae family. Speaking in 2011, Ye Naihao, an associate researcher with the Yellow Sea Fisheries Research Institute, said: “All the countries suffering green tides are developed. Economic development means a greater ability to change the coastal environment – and to damage it.”
Addressing the root cause of the problem would mean reducing the flow of nutrients into the oceans, but this could hamper local economies and take decades to achieve. This leaves governments with their hands tied.
Algae covers a beach in Brittany’s Hillion. Seaweed blooms in this rural part of France have been linked to nutrient-rich runoff from agriculture. (Image: David Vincent / Alamy)
Scientists have confirmed that Brittany’s blooms are linked to nitrates from fertiliser and manure being carried into the sea via rivers. According to one report, Brittany is said to feed one out of every three French people: more than 60% of the region’s land is used for agriculture and it is the national leader in pork and egg production.
Since 2010, the French government and local authorities have been spending approximately EUR 1 million (US$ 1.05 million) cleaning up the algae every year. Two official action plans designed to reduce nitrate leakage from agriculture were put in place, bringing levels down from their 1990s peak. But those improvements plateaued in 2014, because the fundamentals of local agricultural practices, such as livestock numbers, have not changed.
In China, Wang Songlin stresses the importance of both controlling land sources of pollution and practising integrated land–ocean management. He proposes keeping nutrient run-off from land and coastal activities within a particular range, one that allows the coastal marine ecosystem to continue operating normally, while also benefitting agriculture and aquaculture:
“Reducing unnecessary fertiliser use is good for soil quality. Meanwhile, increasing take-up rates of fodder, limiting livestock intensity, and tackling agricultural pollution is crucial for the green and high-quality agricultural development the government is advocating.”
Niu Yuhan is Assistant Editor at China Dialogue. She previously worked for The Paper and WWF-UK. She holds a Bachelor’s degree in Journalism from Shih Hsin University and a Master’s in International Relations from King’s College London.
This article appears courtesy of China Dialogue Ocean and may be found in its original form here.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
HMM Creditors Prepare for Privatization Sale By Executing Share Conversion
HMM's creditors move a step closer to the share sale executing a required conversion (HMM file photo)
Korea’s two large government-controlled financial institutions executed a required share conversion if they are going to proceed with the proposed sale of their controlling interest in HMM. The move comes in advance of an anticipated announcement next month of the selection of a preferred bidder, and is being seen by analysts as a sign that the sale of the shares in South Korea’s largest carrier is proceeding as planned.
Korea Development Bank (KDB) and Korea Ocean Business Corp (KOBC) were used in 2016 to execute a government-led financial rescue plan for the carrier then known as Hyundai Merchant Marine. They received controlling interest in the company as part of the bailout which today includes shares equal to just over 40 percent of the company, which was rebranded HMM, as well as large tranches of private equity convertible bonds and unguaranteed private bonds with warrants. The conversion of all the bonds and warrants would double the financial institutions’ share position, giving them approximately three-quarters of the shares outstanding.
After years of exploring how best to return control of the shipping line to private investors, the two financial institutions began the process in March 2023 hiring financial advisers. They began accepting interest in the sale in June and in August announced that three companies had been selected as finalists. Hapag-Lloyd, however, had also expressed interest but was excluded from the process as the government wants to keep control of the company in South Korea.
Uncertainty was raised over the process after none of the large Korean conglomerates expressed interest and entered the bidding process. Instead, the three bidders are mid-sized Korean companies and many analysts have questioned if they have the finances to buy HMM and fund future investments. The finalists are Harim, a domestic food company that is a large investor in Pan Ocean, South Korea’s largest dry bulk shipping company, Dongwon, another food producer that also has investments in logistics and port operations with the Dongwon Pusan Container Terminal, and LX, a trading company involved in semiconductors, building materials, and logistics.
HMM proposed in September the early repayment of some of the bonds with conversion rights, but the offer was rejected by the investors. Under the terms of the conversion, they have the right to buy shares at a price that is about a third of the current market value for HMM’s shares.
KDB and KOBC proposed in their offering documents that they would execute a conversion of a portion of their position, increasing their shareholdings to just under 58 percent of the shares outstanding. Analysts expressed concern that it would increase the total valuation, raising the cost to the bidders or that the conversion would represent a significant dilution in the share value of HMM.
HMM reported today in a stock exchange filing that it has been notified by the creditors, KDB and KOBC, that they have exercised their rights requesting the conversions on October 19. They will receive 80 million shares for the convertible bonds and an additional 120 million shares from the exercise of the warrants. In total, they will add 200 million shares to their position, with the shares expected for listing on November 10. This will complete a key step in the sale process raising KDB and KOBC’s combined position to the 57.87 percent stake in the offering documents. As part of the offering, the two financial institutions said they would continue to hold the remaining bonds and warrants until at least 2025 and work with the buyer to agree to terms for their later sale.
The execution of the conversion was a required step if the sale of HMM is to proceed. It will likely dilute HMM’s share price which has already fallen 30 percent as the market slowed for the container carriers in 2023 and after the news of the planned privatization sale. The decline in the share price however means that the value of sale has also likely declined from a high of nearly $6 billion to possibly under $4 billion.
Under the process outlined by the financial advisers, KDB and KOBC are scheduled to announce the preferred bidder in November. They will then finalize the terms of the acquisition, which they expect to complete in early 2024.
Evergreen and CIP Partner to Explore Green Fuels Produced in Taiwan
Evergreen with work with the investment group to explore the production of green fuels in Taiwan (file photo)
Evergreen Marine is teaming up with one of the world’s largest fund managers, Copenhagen Infrastructure Partners (CIP), to explore the development and production of green fuels in Taiwan to be used to help the carrier decarbonize its operations. The world’s seventh-largest container carrier will collaborate with one of the funds from the investment company, which is well-known for its activity in greenfield renewable energy to explore the opportunities for hydrogen-based marine fuel development.
With more than 200 container vessels deployed around the world, Evergreen highlights the challenges it faces to meet its decarbonization targets. The carrier highlights that it may require a range of different fuel types.
Evergreen admits that the decarbonization of such an operation is a major undertaking. The company ranked behind other operators in Asia at the beginning of 2023 according to Xeneta when the market intelligence platform launched its Carbon Emissions Index (CEI) tool measuring the performance of major carriers on the main Far East to South America East Coast container corridor. Peter Sand, Xeneta's Chief Analyst cited Evergreen’s “smaller, less carbon efficient vessels” saying they were impacting the company’s rating as well as Xeneta’s data that showed “their ships sailed much faster, with speeds of 8.9 percent above the trade lane average.”
The carrier however showed in its 2022 Corporate Sustainability report that it had achieved a 61.98 percent lower than the base year of 2008 performance for CO2 emissions. They cited also achieving a decrease of 22.4 percent in NOx emissions and a 22.1 percent decline in SOx emission rates in 2022 versus 2021.
The new cooperation with CIP will incorporate several aspects, including the production of e-fuels in Taiwan based on offshore wind. It will also explore a broader supply of green fuels, such as e-ammonia and e-methanol.
“CIP already has a strong footprint in Taiwan, and we are looking forward to working with Evergreen to further support Taiwan’s ambition of realizing its 2050 net-zero goal,” said CIP Partner Felix Pahl. The investment company’s funds are currently involved with constructing and developing several offshore wind farms in Taiwan with strong ties to the Taiwanese industries and society.
The partners noted that Taiwan has good conditions for offshore wind. With growing government support for decarbonization, they believe Taiwan has the potential to become a producer of future fuel types.
WW3.0
China Coast Guard Cutter Hits Philippine Supply Boat in S. China Sea
Bow of CCG 5203 as seen from the stern of Unaiza May 2 after making contact (Armed Forces of the Philippines)
Early Sunday morning, the Philippine Coast Guard was escorting a resupply run to the military outpost on Second Thomas Shoal when a China Coast Guard cutter collided with a Philippine supply boat in the convoy, the PCG said in a statement. Later in the same mission, a Chinese maritime militia trawler "bumped" a PCG patrol vessel.
The resupply runs to Second Thomas Shoal involve tense standoffs between the China Coast Guard and the Philippine Coast Guard, and the PCG has to carry out its mission despite resistance from multiple Chinese vessels. China claims ownership of the Spratly Islands and surrounding waters, including areas within the Philippine exclusive economic zone, like Second Thomas Shoal. Beijing has repeatedly ordered Manila to withdraw its garrison from the Philippine station - a wrecked LST, intentionally grounded on the reef 24 years ago - but Philippine forces have held out, and the resupply missions keep bypassing the Chinese blockade.
In previous confrontations, Chinese forces have used aggressive maneuvering, water cannons and laser target illuminators to deter Philippine supply boats. The PCG has long warned that these tactics increase the risk of collision, and Sunday's mission appears to confirm that prediction. At about 0600 hours Sunday morning, China Coast Guard cutter CCG 5203 engaged in "dangerous blocking maneuvers" to cut off a contracted Philippine supply boat, Unaiza May 2, according to the PCG. The maneuver resulted in a collision at a position about 13 nautical miles away from the station on Second Thomas Shoal.
During the same operation, a Chinese maritime militia vessel - pennant number 00003 - made contact with the Philippine patrol vessel MRRV 4409 on the port side.
Videos from the scene (below) appear to show that both incidents involved light contact and resulted in little damage.
The other Philippine supply vessel in the convoy, Unaiza May 1, made it through to the outpost to deliver supplies and replacement personnel.
In a statement, the Philippine government's task force for the South China Sea called the Chinese blockade force's actions "dangerous, irresponsible and illegal," as well as a violation of Philipping sovereignty and jurisdiction.
In 2016, the Permanent Court of Arbitration in the Hague ruled that China's historically-based claims to the South China Sea are without merit under international law. China has ignored the ruling and has deployed its "gray zone" forces - white-hulled coast guard cutters and militia-operated "commercial" fishing trawlers - to enforce its claims.
Philippines suspends military exchange program with China
As maritime confrontation between China and Philippines escalates in the South China Sea, the Philippines has suspended its military exchange program with Beijing. The move is a protest by the Philippines over numerous run-ins with the China Coast Guard.
Speaking to local media last week, the Chief of Staff of the Armed Forces of Philippines (AFP), General Romeo Brawner Jr., said that the decision to suspend the military exchange program with China was contemplated after an August incident in which a Chinese coast guard vessel sprayed water cannons at Philippines military transport ships in Spratly islands.
The military exchange program between Manila and Beijing was launched in 2007. It entails Philippines sending five military officers (in the rank of lieutenant colonel or higher) to China for 6-12 months of training every year. The Philippine National Police Academy also sends some of its cadets for specialized training to the Beijing Military Academy and other training facilities run by the People’s Liberation Army (PLA).
With diplomatic relations between Beijing and Manila increasingly strained, a group of Filipino senators in August demanded that AFP explain why the military exchange program still exists while China continues to harass Philippines.
“This is indeed alarming. This has to be explained. We have not been accepting cadets from our military treaty ally while we have been sending our soldiers to the country harassing us in the West Philippine Sea. What’s the rationale behind this?”, said Senator Francis Tolentino during a public hearing of the Senate Committee on national defense and security in August.
