The own-initiative opinion of the Consultative Commission on Industrial Change (CCMI)

The European Economic and Social Committee (EESC)

The European ship maintenance, modernisation and repair

(SMRC ) industry - main data

� SMRC shipyards exist in 16 EU countries and employ around 50 to 55 thousand people (the average figure for the 2007-2011 period).

� In 2010-2011 Annual Report, CESA estimate that the total production value of SMRC industry was in 2010 €3.2 billion, which represents approximately 18 % ( average for 2007-2011) of the total production value of the European new building market for ships.

� The EU currently enjoys a strong position in this sector. Its current share of the global market is around 35%,which shows that the sector is strategic for Europe ( for Europeanshipbuilding sector current share of global market is 5-6% )

Source: CESA Annual Report 2010-2011 SMCR Sector Turnovers 2006-2010

SMRC industry turnover of European countries between 2006 and 2010 ( MLNs ofEuro ) by CESA report

2006 2007 2008 2009 2010

Croatia 34 33 55 49 46

Denmark 100 140 170 160 180

Finland n/a n/a n/a n/a 45

France 100 135 135 123 120

Germany 747 955 1100 1100 937

Greece 86 108 117 87 38

Italy 330 351 395 350 270

Lithuania 66 74 87 61 60

Malta 57 49 n/a n/a n/a

Netherlands 525 664 750 485 420

Norway 90 90 110 48 50

Poland 180 304 235 250 350

Portugal 121 132 172 146 90

Romania 69 54 46 26 34

Spain 275 350 403 280 253

UK 300 252 270 280 284

TOTALS 3080 3691 4045 3445 3177

Source: CESA Annual Report 2010-2011

The general conclusions

� The ship maintenance, repair and conversionsector (SMRC) is strategically important to Europeand its sustainable development, since it playsa key role in areas such as environmentalprotection, transport, security and energyefficiency.

� The EESC believes that, on account of itsadvanced technical know-how, the currentnetwork of SMRC shipyards in the EU is wellprepared and capable of meeting the growingdemand for sustainable development,technology, innovation, workers' skills andshipyard equipment.

Opportunities for the SMRC sector

� New orders resulting due to the enlargement of the world fleet and the increasing proportion of older ships, and in particular to the growing demand for conversion and modernisation due to environmental, energy and climate requirements.

� In the immediate term, the growing demand for energy-efficient vessels, the operation and development of offshore wind energy facilities and extraction of natural resources from the sea.

� In the medium to long term, the opening up of Arctic sea routes and deep-sea mining provide further opportunities for the SMRC sector.

The threats - how to overcome its ?

� The on-going crisis means that shipownersand SMRC shipyards are still facing financing bottlenecks, for example, access to credit and thus difficult business conditions for companies. A further challenge is maintaining a critical mass for the sector.

� The SMRC sub-sector should work closely with the maritime value chain with the aim of raising its profile and obtaining support from the EU, the Member States and regions, given the existence of ever greater competition from third countries.

The EESC recommendations (1)

� A broader and more active role for the EIB in the sector within the framework of EIB objectives to support European industrial policy: this also concerns SMEs from the SMRC sector, where the EIB and the EIF have significant indirect scope for action;

� To organize the workshops with the participation of the EIB, the European Commission and industry stakeholders and measures to explore EIB financing opportunities;

� To consider to use of the Europe 2020 Project Bond Initiative in areas relating to transport and energy; the allocation of regional funding (including funding relating to "smart specialisation") to the maritime sector

The EESC recommendations (2)� Must be taken the decision by Commission on extending

the framework on authorised State aid for the shipbuilding sector until the proposal and entry into force of new rules on both the general RDI framework and regional aid, which taken together should play the role of the current framework in future;

� The steps should be taken to ensure that the expiry of the framework and its replacement with new rules does not produce new financial bottlenecks and every effort should be made to compensate the SMRC sector for the economic damage this may cause;

� To prioritize of EU RDI funding under Horizon 2020 (which is to be a continuation of the Waterborne technology platform) for focused maritime projects with demonstration elements and innovation potential (including PPP for research purposes).

Key short-term objectives, which require public support with a view to financing conversions in the EU's SMRC sector

� The installation of cleaners and systems for thetreatment of ballast water (this may affect up to 65 000ships around the world according to the Lloyd's Register)

� The conversions associated with :

- energy efficiency including : installation of LNG-powered engines, installation of facilities for LNGbunkering at sea and heat recovery systems as well asmodernisation units for slow steaming, etc.

- MARPOL convention implementation that createsopportunities for SMRC shipyards, since technologieslimiting emissions will need to be installed on boardships included in existing fleets (scrubbers)

EESC own-initaitive opinion on SMCR sector

Thank you for attention !

Marian Krzaklewski - rapporteur of the opinion