News round-up, April, 27, 2023
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Rooftop Solar: Ain’t No Sunshine
Enphase points out rising interest rates and new net metering rules in California are casting a shadow over rooftop solar growth prospects
Higher interest rates have made rooftop solar a much harder sell in states with lower utility rates.
WSJ Jinjoo Lee, April 26, 2023
Why resuming tariffs on Chinese solar firms threatens U.S. climate goals
An increasing number of Democratic lawmakers are supporting a proposal to reverse President Biden's temporary hold on crushing taxes on specific imports of solar energy.
Analysis by Maxine Joselow with research by Vanessa Montalbano, April 27, 2023Colombia’s President Replaces Market-Friendly Finance Minister in Cabinet Reshuffle
The changes come in the wake of the breakup of his governing coalition and prompt the peso to weaken
WSJ By Juan Forero, April 26, 2023 The EU lacks a credible economic security strategy
The bloc needs to develop a strategy that anticipates future threats and leverages its most valuable security asset — its position as the largest economy in the world.
POLITICO EU BY TOM KEATINGE, APRIL 27, 2023 The North Seas can be the world’s biggest power plant
Tomorrow, we will be taking another crucial step toward a green and independent Europe.
POLITICO EU BY ALEXANDER DE CROO, MARK RUTTE, XAVIER BETTEL, EMMANUEL MACRON, OLAF SCHOLZ, LEO VARADKAR, JONAS GAHR STØRE, RISHI SUNAK AND METTE FREDERIKSEN, APRIL 23, 2023 The Climate Crisis Gives Sailing Ships a Second Wind
Cargo vessels are some of the dirtiest vehicles in existence. Can a centuries-old technology help to clean them up?
The era of sailing ships may seem like a distant memory, but it's important to remember that they were only partially replaced by diesel vessels. The Avontuur, a sailing schooner constructed in 1920 by a Dutch shipyard, is a prime example. Despite being over 90 years old, the Avontuur operated as a passenger liner on the Dutch coast in 2012. However, the United Nations issued a climate assessment that year, warning that the planet was heading towards a future of extreme weather conditions and disasters caused by intensifying heat waves, fires, and storms. We must take action and end our reliance on fossil fuels before it's too late.
Germán & Co
The New Yorker By Pagan Kennedy, April 27, 2023
Andrés Gluski, CEO of energy and utility AES CorpHow can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…
The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.
Today's events
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Image: PHOTO: RICK BOWMER/ASSOCIATED PRESS/ Editing by Germán & Co Rooftop Solar: Ain’t No Sunshine
Enphase points out rising interest rates and new net metering rules in California are casting a shadow over rooftop solar growth prospects
Higher interest rates have made rooftop solar a much harder sell in states with lower utility rates.
WSJ Jinjoo Lee, April 26, 2023
The U.S. rooftop solar business has grown with two essential catalysts: Low interest rates, which make such installations affordable for consumers, and state-level policy that handsomely rewards households with such solar systems for selling excess solar energy back to the grid. Both of those are going in exactly the wrong direction at the moment.
Enphase ENPH -25.73% Energy, a company that manufactures micro-inverters for rooftop solar panels and energy storage systems, confirmed their direction on its earnings call late Tuesday. Its stock fell 24% in morning trading, dragging down other solar company stocks. SunPower and SolarEdge Technologies SEDG -10.43% were each down about 10% on Wednesday morning.
Cold PlungeStock price performanceSource: FactSetSunPowerSolarEdge TechnologiesEnphase EnergyApril 20April 26-30-20-10010%
The company itself had solid high-level numbers to report for its first quarter: Total revenue was roughly flat compared with a quarter earlier, largely as Wall Street analysts expected. Net income was 46% higher than what analysts had penciled in. Revenue guidance for the second quarter, though, was weaker than their expectations, and commentary about the U.S. market was a sobering reminder of near-term challenges for the solar industry.
Enphase said its sell-through of micro inverters in the U.S. was 21% lower in the first quarter compared with the previous quarter, which was worse than the typical seasonal decline of 15%. Sell-through was particularly weak in states with lower utility rates such as Texas, Florida and Arizona, according to the company. In such states, higher interest rates have made rooftop solar a much harder sell to households compared with states in the Northeast where utility rates are higher. The recent banking turmoil has also raised financing costs and tightened credit standards for solar loans, according to a recent report from Zoë Gaston, analyst at research firm Wood Mackenzie.
Another source of uncertainty comes from California, the largest rooftop solar market. The state last year changed the way rooftop solar customers get compensated from selling excess solar energy back to the grid. The new rule—known as net energy metering 3.0—effectively reduced the amount rooftop solar customers get for selling excess energy by 20%-30%, according to ClearView Energy Partners. In the near-term, the change actually boosted demand in California as customers rushed to install solar systems before the new rules kicked in for solar systems. The older, more generous solar rates still apply to systems for which interconnection applications were submitted before April 15. Wood Mackenzie expects the U.S. residential solar market to contract by 3% in 2024, which would be the first full year affected by California’s new rules.
Enphase thinks these challenges are temporary and said California’s policy change should boost its energy storage business over the long term. Notably, under the new rules, the rate that solar or solar-plus-storage customers receive is based on the avoided cost to utilities, or the marginal cost utilities would avoid if these home energy systems provided power instead of themselves. In peak air-conditioning months, such as August and September, when energy demand stays high in the evening while supply is tight after the sun goes down, homes with battery storage would benefit from higher compensation.
That may be true but, as Enphase itself says, it could take time for customers to realize that benefit. Meanwhile, there is no visibility on when interest rate hikes will pause. As long as those two shadows persist, investors will find it difficult to focus on the glimmering, long-term promises to solar offered by the Inflation Reduction Act.
The Inflation Reduction Act’s Bait and Switch
Sensible energy policies would avert the economic harm the measure’s climate extremism could inflict.
WSJ By John Barrasso, April 20, 2023Promise one thing, deliver another. It’s a tactic Democrats have used time and again: the bait and switch.
Last year, Democrats enacted their reckless green spending spree, and labeled it the Inflation Reduction Act. Starting with the name, just about every assurance Democrats made about the bill is false. Among other claims, the White House asserted that spending a tidal wave of taxpayer money would reduce the deficit, lower costs for families, grow the economy and create jobs.
Will it? Thanks to recent modeling results from the U.S. Energy Information Administration, we can say with confidence the answer is no. The Energy Information Administration is one of the world’s premier energy modeling institutions. Every year it issues a “business as usual” reference forecast that includes, to the extent possible, all current laws and rules affecting the energy sector. It also issues forecasts based on different policy, economic and technology assumptions.
Among the many scenarios the Energy Information Administration just released was one without the Democrat law (“No IRA”) and one in which businesses and consumers make full use of the law’s provisions (“High IRA Uptake”). The one with the Democrats’ energy and climate plans fails to produce a stronger economy, more jobs or more disposable income. That’s not what the sales pitch said.
The good news is that there is a way to expand our economy, help American families thrive and begin to tackle our enormous budget deficit. The Energy Information Administration examined what might happen in a future with significantly greater oil and natural gas output (“High Oil and Gas Supply”).
Compared with the High IRA scenario, the results are astonishing. From 2023 to 2050, the high oil and gas supply case produces $35 trillion more in total gross domestic product. That’s more than the entire federal debt of $32 trillion.
The federal government typically collects about 20% of GDP in revenue. That greater growth would translate into an additional $7 trillion in federal tax revenue through 2050. That’s 2.5 times the amount in the Social Security trust fund at the beginning of 2023.
Compare this to the spending binge Democrats rammed through Congress. The Committee for a Responsible Federal Budget tallied up the costs and found the law will add more than $4.8 trillion to deficits between 2021 and 2031.
Despite Democrat promises, it turns out going green means going further into the red. With Social Security and Medicare facing fiscal challenges, climate extremism will only make addressing our fiscal problems worse.
The benefits of a robust oil and gas sector don’t stop with GDP and revenue. Energy Information Administration data show the average number of U.S. jobs would be 4.5 million higher each year compared with the High IRA case. Families and businesses would enjoy lower prices for electricity, gasoline, diesel, home heating oil, natural gas and propane. Disposable income would average $645 billion more per year. Carbon-dioxide emissions from energy would be 11% lower in 2050 than in 2022.
The president’s blind loyalty to climate extremists is driving him to shut down conventional energy production and deny the American people its benefits. The president let slip during his State of the Union speech that he believes we’ll need oil and gas only for another decade. His climate envoy John Kerry offered seven or eight years.
They’re living in a fantasy world. In the real world, every reputable energy forecast shows that people will use huge amounts of oil, gas and coal at least to 2050.
Someone will have to supply that energy to a growing world. America is perfectly positioned to do so. We can do it more cleanly, more efficiently and more securely than anyone else. Russia, Venezuela, Iran and Saudi Arabia will fill whatever void we leave.
Forecast models don’t provide answers. They provide insights. The key insight from the Energy Information Administration’s modeling—and one that has been consistent over the years—is that a strong, vibrant oil and gas sector is vital to a healthy U.S. economy. It underpins growth. It’s a source of revenue. It stimulates job creation. It lowers energy costs for families. It enhances our competitiveness. It advances our geopolitical interests.
The Biden administration brags about erecting obstacles to traditional energy production. It is trying to ban gas stoves, eliminate conventional cars, and end the use of fossil fuels. The goals are completely unrealistic, but the policies have dramatic and negative consequences for our economy and security.
The permitting reform and energy bills Sen. Shelley Moore Capito and I will introduce and similar legislation the House just passed will help revive the “all of the above” energy strategy that has served the country so well.
One of America’s biggest economic and geopolitical assets is its energy resources. It’s time we put them back to work.
Image: A solar farm near Deport, Tex., on March 5, 2022. (Cooper Neill for The Washington Post)Why resuming tariffs on Chinese solar firms threatens U.S. climate goals
An increasing number of Democratic lawmakers are supporting a proposal to reverse President Biden's temporary hold on crushing taxes on specific imports of solar energy.
Analysis by Maxine Joselow with research by Vanessa Montalbano, April 27, 2023Good morning and welcome to The Climate 202! Below, we have an exclusive on a new permitting proposal from Reps. Sean Casten (D-Ill.) and Mike Levin (D-Calif.).
A growing number of congressional Democrats are backing a measure that would undo President Biden’s temporary pause on crushing tariffs on certain solar imports.
It’s the latest example of how mounting anti-China sentiment in Washington has scrambled traditional political alliances and unnerved America’s clean-energy sector, we report with our colleague Evan Halper.
The outcome of the unfolding political drama could have major consequences — not just for solar energy companies, but also for homeowners hoping to add solar panels to their roofs, motorists wanting to charge electric vehicles with clean power and utilities trying to reduce their carbon footprints.
China dominates solar supply chains. Figures provided by the research firm BloombergNEF show that Chinese companies make more than 95 percent of the wafers and ingots essential to assembling solar panels.
The details
The measure would undo Biden’s two-year suspension of the tariffs, which apply to solar cells and panels made by Chinese companies but sold out of Cambodia, Malaysia, Thailand and Vietnam.
The White House announced the suspension last summer in an effort to reassure the domestic solar industry, which had been paralyzed by a Commerce Department investigation into alleged tariff dodging by Chinese cell- and panel-makers.
But in December, Commerce issued a preliminary finding that the Chinese manufacturers were, in fact, dodging tariffs. In response, a bipartisan group of lawmakers introduced a resolution to overturn Biden’s pause, saying China needed to be punished for circumventing U.S. trade law.
The measure was introduced using the Congressional Review Act, which allows lawmakers to nullify the administration’s decisions with a simple majority vote within 60 legislative days.
Many lobbyists and analysts expect the measure to garner the 60 votes needed to pass the Senate — requiring at least 11 Democrats to support it.
While Biden has vowed to veto the resolution if it reaches his desk, the solar industry and its allies fear that supporters could reintroduce the proposal as an amendment to must-pass legislation.
“I’m worried that if you give them 60 [votes] in the Senate, Republicans will keep coming back for more bites at the apple,” said a House Democratic aide who spoke on the condition of anonymity because they were not authorized to comment publicly. “They’re going to find every possible way to make us take hard votes on that.”
Democratic defections
The resolution — which could pass the House as soon as today — has put some Democrats in the awkward position of defying the president.
Sen. Robert P. Casey Jr. (D-Pa.), who represents a battleground state where Biden won by 80,555 votes in 2020, said in an interview that he would vote for the resolution because “China’s got to be held accountable.”
Sen. Sherrod Brown (D-Ohio) — another red-state Democrat who is up for reelection in 2024 — said Wednesday he would vote to restore the tariffs. “The Chinese government will do anything to undermine American manufacturing, and would like nothing more than to kill the American solar manufacturing industry before it takes off,” Brown said in a statement.
Senate Finance Committee Chair Ron Wyden (D-Ore.), one of the most protectionist senators, told reporters he would also vote for the proposal to support “red, white and blue manufacturing jobs.”
And Sen. Joe Manchin III (D-W.Va.), who chairs the Energy and Natural Resources Committee, said he was fed up with U.S. reliance on China for its energy transition. “I cannot fathom why the Administration and Congress would consider extending that reliance any longer and am proud to join this CRA to rescind the rule,” he said in a statement.
The consequences
If tariffs were reimposed, leaders in the U.S. solar industry say the impact on jobs and climate targets would be devastating.
The Commerce investigation carries the threat of retroactive tariffs. That means if the two-year pause is lifted, U.S. solar developers could be forced to pay $1 billion in retroactive fees, according to the Solar Energy Industries Association.
The resulting uncertainty in the industry would eliminate 30,000 well-paying jobs and $4.2 billion in domestic investment, the group has estimated, while 4 gigawatts of solar projects would be canceled, increasing planet-warming carbon emissions by 42 million metric tons.
“I would have to lay off thousands of people,” said George Hershman, CEO of SOLV Energy, a San Diego-based developer of large solar projects around the nation.
“When you are talking about jobs that cost $300 million to $400 million, you can’t stop and start them easily,” he added. “I don’t know why anyone would support this.”
On the Hill
Reps. Sean Casten (D-Ill.) and Mike Levin (D-Calif.) today will unveil a discussion draft of legislation aimed at accelerating the permitting process for clean energy and transmission lines while ensuring community input, according to a copy of the proposal shared first with The Climate 202.
The lawmakers, who co-chair the House Sustainable Energy and Environment Coalition’s task force on clean-energy deployment, say they’re hoping to juice permitting negotiations after Democratic leaders tried unsuccessfully to pass a permitting bill from Sen. Joe Manchin III (D-W.Va.) last year.
“We were very frustrated that the only vehicle that was being discussed for permitting reform was the Senate Manchin package, which frankly has got a lot of completely unnecessary oil and gas provisions,” Casten told The Climate 202. “There has never been a proper package with the right policies.”
The Clean Electricity and Transmission Acceleration Act differs significantly from Manchin’s measure as well as the permitting provisions in House Republicans’ energy package, which passed the chamber last month and primarily focused on boosting fossil fuel projects.
The legislation would accomplish the following goals, according to a section-by-section summary from Casten’s office:
Give the Federal Energy Regulatory Commission siting authority for national interest transmission lines, or those that cross at least two states and have a capacity greater than 1,000 megawatts.
Establish an Office of Electricity Transmission at the commission.
Authorize $2.1 billion to address the shortage of electricity transformers through the Defense Production Act.
Require federal agencies to hold multiple hearings in environmental justice communities on proposals that affect them.
Casten expressed confidence that these proposals could garner broad support within the Democratic conference, although he acknowledged that most Republicans would probably reject them in favor of the GOP energy package.
“We’ll see what happens on the politics,” he said. “But you’ve got to define what your policy goals are.”
The Senate on Wednesday voted 50-49 to advance a GOP-led effort to revoke the Environmental Protection Agency’s new rule aimed at slashing tailpipe pollution from heavy-duty trucks, Rachel Frazin reports for the Hill.
Sen. Joe Manchin III (D-W.Va.) was the only Democrat to vote with Republicans on the Congressional Review Act resolution.
Proponents of the rule argue that curbing nitrogen oxide pollution from trucks can help protect public health and prevent childhood asthma cases. But critics say it would increase burdens on the trucking industry and worsen inflation.
Despite the resolution’s approval, President Biden said Wednesday he would veto it if it landed on his desk. And the effort is unlikely to receive enough Democratic support to gain the two-thirds majority needed to override a veto.
House Republicans on Wednesday approved a bill that would raise the debt ceiling, slash federal spending and repeal some of President Biden’s programs to combat climate change, The Washington Post’s Tony Romm, Marianna Sotomayor and Leigh Ann Caldwell report.
The 217-215 vote escalated a high-stakes feud with the White House, with as few as six weeks left before the government could default. The bill would roll back many of the clean-energy tax credits created by the Inflation Reduction Act, including those for electric vehicles and wind and solar energy.
Rep. Nancy Mace (R-S.C.) — who on Tuesday threatened to vote against the bill because of concerns about scrapping clean-energy subsidies — ultimately supported the measure. Midwestern Republicans also backed the bill after GOP leadership agreed late Tuesday to restore tax credits for corn-based ethanol and other biofuels.
The only four Republican defections were Reps. Matt Gaetz (Fla.), Tim Burchett (Tenn.), Ken Buck (Colo.) and Andy Biggs (Ariz.), all members of the far-right House Freedom Caucus.
The Senate Environment and Public Works Committee on Wednesday voted along party lines to advance the nominations of two of President Biden’s top picks for key Environmental Protection Agency roles, months after deadlocking on both.
By a vote of 10-9, the panel approved the nomination of Joseph Goffman to helm the agency’s Office of Air and Radiation, which he has led on an acting basis since January 2021. The panel deadlocked 10-10 on the nomination in November, with Republicans criticizing Goffman’s role in writing the Obama-era Clean Power Plan that aimed to significantly cut planet-warming pollution from power plants.
Lawmakers also approved the nomination of David Uhlmann, Biden’s pick for the EPA’s Office of Enforcement and Compliance Assurance, by voice vote. The office holds companies accountable when they violate the nation’s environmental laws.
In addition, the committee on Wednesday approved bipartisan legislation to improve the nation’s recycling and composting systems. The Recycling and Composting Accountability Act is co-sponsored by Chair Thomas R. Carper (D-Del.), ranking member Shelley Moore Capito (R-W.Va.) and Sen. John Boozman (R-Ark.).
Seaboard: pioneers in power generation in the country
…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.
More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.
Image: President Gustavo Petro has seen some of his signature proposals stall in Congress or run into political opposition.
PHOTO: OLIVER CONTRERAS/BLOOMBERG NEWS/ Editing Germán & CoColombia’s President Replaces Market-Friendly Finance Minister in Cabinet Reshuffle
The changes come in the wake of the breakup of his governing coalition and prompt the peso to weaken
WSJ By Juan Forero, April 26, 2023 BOGOTÁ, Colombia—Colombian President Gustavo Petro, a leftist who has pressed for broadscale social reforms in eight months in office, replaced his market-friendly finance minister on Wednesday amid the breakup of his congressional coalition.
José Antonio Ocampo, a Columbia University professor who was seen by the markets as a stabilizing force, was replaced as finance minister in a cabinet shuffle that saw seven ministers ousted. The shake-up weakened the long-battered Colombian peso and sent bonds tumbling.
The Colombian stock market’s benchmark Colcap index fell 1%, and the peso weakened 3.1% to 4,641 against the U.S. dollar from 4,496 on Tuesday.
“This is going to generate uncertainty and lots of nervousness in the markets,” said Daniel Mejía, an economist at Los Andes University. “The departure of Ocampo is a very serious development for the Colombian economy.”
José Antonio Ocampo was replaced as Colombia’s finance minster on Wednesday.
The removal of ministers in the 19-member cabinet came as Mr. Petro, a former leftist guerrilla, has seen some of his signature proposals stall in Congress or run into political opposition.
A ruling coalition that had included centrist and conservative parties had crumbled in recent weeks as the president pressed for broad changes in a healthcare system that polls showed most Colombians favor. Other far-reaching proposals by Mr. Petro include starting peace talks with armed groups, undertaking a land redistribution for poor farmers, transitioning from oil to renewable energy, and a pension overhaul.
In a statement posted on his Twitter page, the 63-year-old leader said officials “will persist with our program and our vocation for big national accords.”
“We reaffirm our commitment to remain loyal to the popular mandate we have received,” he said in the statement, “and we have decided to create a cabinet to redouble our agenda for social change for the great majority of citizens.”
Ricardo Bonilla, who headed the finance department for Bogotá when Mr. Petro was mayor, is the new finance minister. Mr. Petro also replaced his ministers of interior, agriculture and health, sectors the president has said need far-reaching changes to improve the lives of poorer Colombians. Mr. Petro had already won approval for higher taxes, and has called for more spending on the poor.
Mr. Bonilla said via Twitter that he would “maintain economic stability.”
A longtime aide to Mr. Petro, Mr. Bonilla was known as having a steady hand during his time in Bogotá City Hall. But Sergio Guzmán, director of the political consulting firm Colombia Risk Analysis, said the markets may question him in his new role and whether he can damp inclinations Mr. Petro might have to increase spending.
“Will Ricardo Bonilla be able to stand up to the president and say no when proposals imply economic risk?” Mr. Guzmán said. “I think the markets don’t perceive Bonilla as independent, as having the political clout to be able to say no to Petro.”
*—Jenny Carolina González and Anthony Harrup contributed to this article.
Image: The key lesson for the EU from previous financial crisis is the importance of developing an overall economic security strategy | Yuri Kadobnov/AFP/ Editing by Germán & CoThe EU lacks a credible economic security strategy
The bloc needs to develop a strategy that anticipates future threats and leverages its most valuable security asset — its position as the largest economy in the world.
POLITICO EU BY TOM KEATINGE, APRIL 27, 2023 Tom Keatinge is the founding director of the Center for Financial Crime and Security Studies at the Royal United Services Institute.
In the summer of 2014, newspaper headlines were unanimous: Western nations had responded to the Kremlin’s annexation of Crimea and its complicity in shooting down a Malaysian passenger airliner in Ukrainian airspace by imposing sweeping economic sanctions against Russia. The reality of the European Union’s actions, however, is rather different.
The EU provides a handy timeline of the restrictive measures it’s imposed on Russia over the past nine years — and it is a record of inaction and failure.
Compared to the sanctions imposed over the past 12 months to “cripple the Kremlin’s ability to finance the war,” the 2014 measures were far from sweeping. And, in a lesson for today’s political leaders, interest in maintaining economic pressure on Russia and its war machine evaporated quickly, with key members of the bloc doubling down on economic engagement with its belligerent neighbor, perpetuating a misconstrued notion of Wandel durch Handel, or “change through trade,” instead.
It was an approach that left Russia’s military with continued capacity to develop weaponry, import needed components and stock its arsenal for the onslaught on its peaceful neighbor, despite clearly failing to meet President Vladimir Putin’s ambitions. But just imagine the extent to which eight years of properly implemented and maintained economic restrictions on Russia’s military could have neutered the Kremlin’s aspirations in Ukraine.
And here lies the EU’s central failing — it manages from “crisis to crisis.” Radical thinking and remediation only occur when vulnerabilities are exposed and action is forced upon Brussels.
Consider the series of steps taken by the European Commission on a topic like money laundering, triggered in the main by revelation and scandal. Changes and improvements are only a function of milestone events like the Panama Papers — leaked documents on offshore entities and the financial activities of politicians — or the exposure of extreme failings, such as the case of the Danske Bank Estonia scandal.
Similarly, in confronting Russia’s full-scale invasion of Ukraine in 2022, the EU has been running fast just to stand still. Eurocrats and their counterparts across member countries hurried to design and agree on a raft of sanctions packages, which are genuinely sweeping. Meanwhile, with the appointment of a sanctions envoy and having recognized that member country implementation and third country compliance aren’t yet what they should be, revisiting the substance of last year’s work is now an important task for 2023.
But, again, all of this is reactive. New structures, directives and regulations are built on the ashes of disaster. However, managing from crisis to crisis isn’t a strategy — it’s a sign of failure.
So, what should the EU do? What lessons should it learn from the last 12 months of frantic activity?
The key lesson is the importance of developing an overall economic security strategy —one that not only ensures the reliability of the supply chains the EU counts on, but one that recognizes and leverages the bloc’s position as the largest economy in the world, the top trading partner for 80 countries and the world’s largest trader of goods and services.
This is an unrivaled position, yet a security strategy based on the EU’s economic dominance is absent. And while championing “openness” is to be applauded, it can become an existential vulnerability when accompanied by naivety.
The key lesson is developing an overall economic security strategy that recognizes the bloc’s position as the world’s largest trader of goods and services | Adrian Dennis/AFP via Getty Images
Of course, some member countries have already gone ahead with this, weaning themselves off Russian energy supplies, “de-Russifying” their economies to the greatest extent possible without waiting for Brussels to lead. But a fragmented, ad hoc and reactive response to such future security crises will once again expose the EU as weak and unprepared.
And on no topic is the issue of economic security more pressing than it currently is with China.
The magnitude of economic connections between the EU and China makes the failure to prioritize the development of an economic security strategy — even if it means reversing the EU’s dearly held vision of being an open and competitive economy — grossly irresponsible. EU leaders should be engaging with like-minded partners — notably the United States — to develop a collaborative economic security strategy that leverages the strengths and opportunities each has to offer — not taking sycophantic and grandstanding trips to Beijing.
And while, for some, government involvement in the private sector might herald a return to the inept government-led industrial strategies of the 1970s and early 1980s, economic security in the 21st century is going to require close collaboration between policymaking and private sector investment. The instincts of the profit-centered industrialist are going to need to be guided by smart, forward-thinking government policies, which incentivize investment decisions that don’t expose a nation to unacceptable economic security risks.
From critical minerals to foreign direct investment and technology supply chains, security — and partnership with allies — should be at the center of decision-making. And it shouldn’t be merely defensive either.
Utilizing their wealth and trading opportunity, Western nations should be securing expanded alliances around the world with countries facing an “East vs. West” choice. Yet, the harsh reality is that while the EU has vacillated, China has forged economic alliances in its favor across the world, and Russia has secured support — or at least acquiescence — via its provision of security.
So, yes, 2023 should be about ensuring the greatest possible restrictions are placed on the Russian economy and its ability to fund and resource its illegal war in Ukraine. But it should also be about thinking ahead, learning lessons from failed policy and ensuring the EU develops an economic security strategy that anticipates future threats and leverages its most valuable security asset — namely, its position as the largest economy in the world.
Image: Off-shore wind turbines in the North Sea are essential to reach global climate goals | Pool photo by Christian Charisius/AFP/ Editing by Germán & CoThe North Seas can be the world’s biggest power plant
Tomorrow, we will be taking another crucial step toward a green and independent Europe.
POLITICO EU BY ALEXANDER DE CROO, MARK RUTTE, XAVIER BETTEL, EMMANUEL MACRON, OLAF SCHOLZ, LEO VARADKAR, JONAS GAHR STØRE, RISHI SUNAK AND METTE FREDERIKSEN, APRIL 23, 2023 Alexander De Croo is the prime minister of Belgium. Mark Rutte is the prime minister of the Netherlands. Xavier Bettel is the prime minister of Luxembourg. Emmanuel Macron is the president of France. Olaf Scholz is the chancellor of Germany. Leo Varadkar is the prime minister of Ireland. Jonas Gahr Støre is the prime minister of Norway. Rishi Sunak is the prime minister of the United Kingdom. Mette Frederiksen is the prime minister of Denmark.
We need offshore wind turbines— and we need a lot of them.
We need them to reach our climate goals, and to rid ourselves of Russian gas, ensuring a more secure and independent Europe.
Held for the first time last year, Denmark, Germany, Belgium and the Netherlands came together for the inaugural North Sea Summit in the Danish harbor town of Esbjerg, setting historic goals for offshore wind with the Esbjerg Declaration. It paved the way for making the North Seas a green power plant for Europe, as well as a major contributor to climate neutrality and strengthening energy security.
This Monday, nine countries will meet for the next North Sea Summit — this time in the Belgian town of Ostend — where France, Ireland, Luxembourg, Norway and the United Kingdom will also put their political weight behind developing green energy in the North Seas, including the Atlantic Ocean and the Irish and Celtic Seas. Together, we will combine and coordinate our ambitions for deploying offshore wind and developing an offshore electricity grid, putting Europe on the path toward a green economy fueled by offshore green power plants.
Collectively, our target for offshore wind in the North Seas is now 120 gigawatts by 2030, and a minimum of 300 gigawatts by 2050 — larger than any of the co-signatories’ existing generation capacity at a national level. And to deliver on this ambition, we are committing to building an entire electricity system in the North Seas based on renewable energy by developing cooperation projects.
This is a massive undertaking and a true example of the green transition in the making. It also requires huge investments in infrastructure, both offshore and on land.
It presents us with a political and environmental dilemma as well: We are facing a climate crisis at the same time some of our ecosystems are in decline, and offshore wind is an integral part of both climate action and safeguarding our energy security. Thus, time is of the essence, and we must follow up on the progress already made on reining in the burden of bureaucracy for renewable projects.
We cannot wait years for permitting processes while global temperatures rise, and autocratic regimes have the power to turn the lights off in our living rooms and halt production in our industries. Instead, we must work toward rapid deployment of offshore wind, while making every effort to safeguard our healthy and robust marine ecosystems for future generations.
Crucially, the green transition is also a cornerstone for maintaining our competitiveness in the global economy. And while the North Seas will be a major provider of clean, affordable energy for our industries and businesses in the form of electricity and hydrogen, we must ensure we don’t simply move from one dependence to another. As such, we need to make space for European value chains when it comes to green tech and diversify our sources of critical raw materials for wind turbines, batteries and the like. We will work together within NATO and the European Union to increase the security of offshore and underwater infrastructure, stepping up efforts to react effectively to growing traditional and hybrid threats.
Tomorrow, we will be taking another crucial step toward a green and competitive Europe, with even more turbines spinning in the North Seas. And every turbine gets us closer to a green future.
We know the way — now, it’s a matter of picking up the pace.
Image: Germán & CoCooperate with objective and ethical thinking…
Image: NATO needs to address the fact that deterrence can no longer be seen as just a bipolar equation when it comes to nuclear weapons | Sean Gallup/Editing by Germán & CoFacing Europe’s nuclear necessities
Deterrence can no longer be seen as just a bipolar equation — and it’s time NATO addresses this fact.
POLITICO EU BY MAXIMILIAN TERHALLE AND KEES KLOMPENHOUWER, APRIL 22, 2023 Maximilian Terhalle is a visiting professor of strategic studies at the London School of Economics (LSE IDEAS). Kees Klompenhouwer is a former Ambassador of the Netherlands.The euphoria in NATO surrounding Finland’s new membership demonstrates a grim reality: Russia’s brutal invasion of Ukraine has searingly exposed Europe’s strategic vulnerability.
It is clear now that the West’s war efforts thus far would have been inconceivable without the United States, and Russia’s shrill nuclear rhetoric has been slowly degrading the Continent’s long-standing political unwillingness to address the nuclear elephant in the room.
With only a handful of strategic thinkers engaged with the nuclear problem, for years this issue has gone largely unnoticed, and curiously, former U.S. President Donald Trump’s departure from power has faded his threats to leave NATO from European memory. As the 2024 U.S. presidential election may once again result in an isolationist Republican victor, however, doubts regarding Washington’s nuclear defense commitment to Europe may well soon return.
Meanwhile, China’s revisionist ambitions — a bipartisan concern for the U.S. — are stretching America’s role of security guardianship to an extent that the U.S. could eventually be obliged to make some hard choices. And as intimated by former Defense Secretary James Mattis’s succinct response of “No, Sir!” when asked whether America could fight two major wars simultaneously, these choices wouldn’t be to the advantage of European security.
As such, deterrence can no longer be seen as just a bipolar equation — and it’s time NATO addresses this fact.
In 2011, as part of the “New START” nuclear arms reduction treaty — which imposed limits on deployed long-range nuclear weapons — both Russia and the U.S. had agreed on an equal number of said strategic arms. However, not only is this treaty set to expire by 2026, but Russian President Vladimir Putin recently suspended it.
In addition, China is currently aiming to increase the total number of nuclear warheads at its disposal from 400 to 1,000 in the next few years, it’s nuclear rise thus starting to shape a tripolar set of deterrence equations. This isn’t only undermining the notion of nuclear strategic parity and making U.S. deterrence much more difficult to manage, but it’s also contributed to the demise of the Intermediate-Range Nuclear Forces Treaty, which had limited the number of short- and intermediate-range — or sub-strategic — nuclear weapons in Europe, and a similar fate may now await the New START treaty too.
At the same time, Russia has been modernizing its sub-strategic nuclear arsenal as well, and consolidating its nuclear superiority when it comes to Europe. While Moscow now has 2,000 tactical nuclear warheads targeting the Continent; Europe has at its disposal merely 100 U.S. free-fall bombs that can be delivered by so-called dual-capable aircrafts (DCA) — i.e. fighter jets that could carry nuclear bombs into Russia. Otherwise, the United Kingdom has some 225 strategic nuclear warheads carried by submarines, while France has 290 strategic nuclear warheads of which approximately 50 are medium-range air to surface missiles (ASMP) — but that’s it.
Moreover, Russia has now developed a hypersonic glide missile that’s nuclear capable and with a range of 2,000 kilometers, against which there is apparently no current effective defense.
Crucially, this combination of China’s aggressive nuclear weapons program, Russia’s growing sub-strategic nuclear superiority over Europe, and possible renewed American isolationism would spell the erosion of the U.S. nuclear umbrella’s global credibility, pushing nations in East Asia and Europe to come up with national solutions — something that would effectively spell the end of the Nuclear Non-Proliferation Treaty, which is the cornerstone of nuclear arms control.
This means that China is essentially changing the strategic calculations that NATO allies have to make.
Russia’s brutal invasion of Ukraine has searingly exposed Europe’s strategic vulnerability | Alexander Nemenov/AFP via Getty Images
As U.S. and Chinese political rhetoric have escalated, diplomatic relations between the two great powers have dangerously deteriorated. China now also appears determined to exercise sovereign control over Taiwan and the Western Pacific — something that will be difficult to deter. And though neither side is yet militarily ready for a direct confrontation, if diplomacy and statecraft fail, a military confrontation over Taiwan will become more likely — not least since the U.S. president has pledged to intervene directly in such a case, despite formally recognizing China’s sovereignty over Taiwan.
In such a scenario the U.S. would then have to withdraw military assets from Europe, and European allies would be called upon to provide the bulk of the conventional force in the European theater to defend and deter against Russia.
Thus, NATO now needs to think much harder about how to prepare the alliance prior to such a worst-case scenario, and this reevaluation needs to include the question of what the alliance should do in the nuclear realm — a question so far left untouched.
And critically, rethinking NATO’s nuclear strategy in this way will likely lead to the alliance abandoning some of the axioms it now holds.
For instance, based on global American strategic supremacy, the very idea of autonomous European defense has long been considered detrimental to the vital transatlantic link. However, with global strategic challenges growing fast, this principle is no longer tenable. And while addressing this will be a major political challenge, there’s an undeniable need for a new approach that strengthens NATO by compensating for foreseeable gaps in the transatlantic nuclear deterrence posture.
Three mutually reinforcing paths could provide a way forward here: First, upgrading the U.S. contribution to European sub-strategic nuclear deterrence, modernizing weapons and enlarging the number of DCA-capable nations in Europe. Second, starting a new dialogue on how the independent French and British deterrents could fit into this strategy. And third, nonnuclear European allies’ strengthening their conventional forces to support NATO’s overall deterrence strategy, including the link to U.S. nuclear deterrence.
Given today’s growing challenges, now is the time for NATO to adapt its concept of “peace through strength.” And in order to do so, it must rethink its nuclear deterrence strategy — there is no time to waste.
Image: Illustration by Owen D. PomeryThe Climate Crisis Gives Sailing Ships a Second Wind
Cargo vessels are some of the dirtiest vehicles in existence. Can a centuries-old technology help to clean them up?
The era of sailing ships may seem like a distant memory, but it's important to remember that they were only partially replaced by diesel vessels. The Avontuur, a sailing schooner constructed in 1920 by a Dutch shipyard, is a prime example. Despite being over 90 years old, the Avontuur operated as a passenger liner on the Dutch coast in 2012. However, the United Nations issued a climate assessment that year, warning that the planet was heading towards a future of extreme weather conditions and disasters caused by intensifying heat waves, fires, and storms. We must take action and end our reliance on fossil fuels before it's too late.
Germán & Co
The New Yorker By Pagan Kennedy, April 27, 2023In February, 1912, Londoners packed a dock on the River Thames to gawk at the Selandia, a ship that could race through the water without any sails or smokestacks. Winston Churchill, then the minister in charge of the British Royal Navy, declared it “the most perfect maritime masterpiece of the twentieth century.” But, as the Selandia continued its journey around the world, some onlookers were so spooked that they called it the Devil Ship.
The Selandia, a Danish vessel that measured three hundred and seventy feet, was one of the first oceangoing ships to run on diesel power. So-called devil ships inaugurated a new age of petroleum on the high seas; by the twenty-first century, nearly ninety per cent of the world’s products spent time on diesel-powered vessels. The shipping industry created a mind-bending supply chain in which an apple from halfway around the world often costs less than one from a nearby orchard.
Diesel ships never entirely stamped out the sailing ships that once reigned supreme, however. In 1920, a Dutch shipbuilder fashioned a sailing schooner named the Avontuur and put it to work carrying cargo, which it did for the rest of the century. By 2012, the Avontuur was ferrying passengers on the Dutch coast; at more than ninety years old, it probably seemed destined for a maritime museum or a scrap heap. But that year a United Nations climate report warned that the planet was careening toward an era of extreme weather and disasters, in which escalating heat waves, fires, and storms could become the norm. Humans had the power to avert these crises—but only if they took rapid action to end their dependence on fossil fuels.
Two years later, Cornelius Bockermann, a German sea captain who had worked with oil companies, bought the Avontuur and made it the flagship of a company called Timbercoast. His mission was to eliminate pollution caused by cargo shipping. Bockermann had witnessed the harms of diesel ships; on the high seas, beyond the reach of most environmental regulations, the descendants of the Selandia burn millions of gallons of thick sludge left over from the oil-refining process. The shipping industry, he knew, was one of the dirtiest on the planet, spewing roughly three per cent of the world’s climate pollution—as much as the aviation industry. After having the Avontuur restored, he captained the ship, hired a small crew, recruited some volunteer shipmates, and put the vessel back to work. It could carry only about a hundred tons of cargo—a tiny amount compared with the more than twenty thousand tons that a container ship can carry—but customers hired Timbercoast to deliver coffee, cocoa, rum, and olive oil.
Bockermann’s company is one of several founded on a provocative idea: What if shipping’s history could inspire its future? For centuries, the cargo industry ran on clean wind power—and it could again. As the climate crisis has escalated, and the pandemic has exposed weaknesses in global supply chains, the movement to decarbonize shipping has spread. What was once the dream of a few enterprising idealists has become a business opportunity that startups and sprawling multinationals alike are chasing.
Christiaan De Beukelaer, an anthropologist who was researching the nascent field of eco-friendly shipping, came aboard the Avontuur as a shipmate in February, 2020. He was about three weeks into his voyage when, on March 17th, the ship’s temperamental dot-matrix printer spewed out an emergency message that Bockermann had sent from shore. “The world as you know it no longer exists,” the dispatch said. Coronavirus lockdowns had shut borders and ports in dozens of countries. De Beukelaer and the rest of the crew were now marooned indefinitely aboard the Avontuur.
In the Gulf of Mexico, they rediscovered the difficult realities of wind-powered transport. “We were going around in circles, taking the sails down and up again because of the squalls,” De Beukelaer told me. The ship zigzagged for weeks, and supplies dwindled. After the fruits and vegetables were gone, the crew ate short rations. The cook worried that they’d run out of gas for the stove. But elsewhere, the pandemic was revealing just how vulnerable the entire shipping industry might be.
In 2020, with so many ports clogged and ships stuck at sea, store shelves emptied, and customers waited months for items such as cars and refrigerators. The following year, the Ever Given, a container ship about the size of the Empire State Building, ran aground in the middle of the Suez Canal. It delayed shipping traffic between Europe and Asia for months, a seeming metaphor for a world held hostage by diesel-guzzling behemoths. Oil prices rose while tankers, carrying almost ten per cent of the world’s daily oil consumption, waited their turn. A meme christened the ship the Least Fucks Ever Given.
Shipping’s sudden visibility reinvigorated activist organizations, which have long pressured cargo owners to clean up their operations, De Beukelaer told me. Members from the environmentalist group Extinction Rebellion spun off a political-art collective called Ocean Rebellion; its inaugural demonstration projected messages like “TAX SHIPPING FUEL NOW” onto the side of a cruise ship. In 2021, a consortium of climate and public-health groups launched the Ship It Zero campaign, calling on big retailers, including Target and Walmart, to transport their products with cargo carriers that are “taking immediate steps to end emissions,” and to “sign contracts now to ship your goods on the world’s first zero-emissions ships.”
In January, De Beukelaer published “Trade Winds,” a book about his five months at sea during the pandemic. His story doubles as a plea to clean up the shipping industry. It takes “fifty thousand Londons worth of air pollution,” he writes, to ship eleven billion tons of cargo each year—about one and a half tons for each person on the planet. In his view, consumers and corporations must take responsibility for the environmental mayhem that they cause. And they can start to do that, he writes, if sailing ships make an epic comeback.
For wind power to push the shipping industry forward, it will need to reach the biggest players in the business. In 2018, Cargill, the largest privately held American company, pledged to cut its direct greenhouse-gas emissions by ten per cent within seven years. Five months later, the company’s maritime division, which manages a fleet of about six hundred ships, announced a CO2 Challenge. Inventors around the world were invited to propose novel ways to reduce carbon emissions of cargo vessels.
Cargill transports more than two hundred million tons of cargo, including soybeans, fertilizers, and iron ore, each year. It’s not easy to decarbonize such a sprawling business; in 2017, Cargill’s global operations emitted as much as several million cars. That same year, an environmental group, Mighty Earth, reported that the company was fuelling deforestation in South America, by buying soybeans in places where megafarms were swallowing woodlands. Because forests store carbon, deforestation has a major carbon footprint. (Cargill once pledged to eliminate deforestation from its supply chains by 2020, but says it is now working toward a target of 2030.)
The CO2 Challenge identified other areas in which Cargill could reduce its climate pollution. “We opened it up to everyone out there,” Jan Dieleman, the head of the division, told me. “We got something like a hundred and eighty ideas, including some crazy ones.” One proposal suggested freezing CO2 emissions into dry ice. Another recommended nuclear-powered ships. A third went so big on batteries that it left little room for cargo. Some of the winning entries sounded as daffy as the rejects. One of them, from a startup called BAR Technologies, imagined airplane-style wings rising nearly a hundred and fifty feet from the deck of a cargo ship.
The idea of powering ships with rigid wings dates back at least to the nineteen-sixties, when an English aeronautics engineer named John Walker spent his weekends in a cranky, old yacht. One day, he was hopping around the cockpit, trying to coax the mainsail to swing into position, and he failed to notice that a rope had wrapped around his ankles. When the sail caught the wind, the rope pulled him into the air. After that humiliating incident, he began to wonder why sailboats had evolved so little in hundreds of years. Wasn’t there some way to improve on this messy system of ropes and booms?
In 1969, news footage showed Walker—a trim and bearded Old Spice sort of man—at the helm of what he called the Plane-Sail Trimaran. Piloting the boat, he once said, felt like flying a plane. Where the mainsail should have been, four rigid sails stuck straight up into the air, like window blinds turned vertically; each one had the shape of an airfoil and generated forward thrust. They also allowed him to carve the wind with more control than a cloth sail would allow: instead of turning the entire boat at an angle to catch the wind, by either tacking or jibing, Walker could simply spin a crank, and the wings above his head would swivel into a configuration that would drive the boat forward, sideways, or even in reverse. He became obsessed with his creation. “My wife complained that I’m not the man she married and she is right,” he told a reporter, in 1970.
During the energy crisis of the nineteen-seventies, Walker wondered whether his winged yacht could also help to solve environmental problems. He founded a company called Walker Wingsails, built demonstration vessels, and, in 1989, advertised a “wingsail cruising yacht” with “fingertip control by a single person.” His vision of no-emissions shipping now seems far ahead of its time. “Using only the free clean ocean winds, the Walker wingsail technology can make a valuable contribution to the control of pollution and the greenhouse effect,” the ad declared. In 1991, the New York Times deemed his winged innovation “the most radical sailboat to ever slip into the harbor.” But not all the reviews were positive. A few years later, when a sailing magazine questioned the performance of his wings, Walker sued for libel and became tangled up in a high-profile case. Though he eventually won, his company went bust.
Around the turn of the twenty-first century, boat designers experimented with winglike sails for a different reason: they wanted to break speed records on racing yachts. Competitors in the America’s Cup, the most prestigious U.S. yacht prize, showed that a combination of rigid wing sails and hydrofoils, which work like underwater airplane wings, propels the yachts along the surface of the water. The winged catamarans, which looked like seabirds skimming for fish, proved to be so blazingly fast that in 2010 the Cup put them into a class of their own. After the Cup banned competitors from testing out their models in water tanks or wind tunnels, many of the teams embraced computer modelling and created elaborate simulations of yachts gliding across virtual oceans.
In advance of the 2017 America’s Cup, a British team hired a group of engineers and created one of the world’s most powerful wing sails. Their entry lost the race, but the designers weren’t ready to part ways and instead spun off BAR Technologies. The team decided, “We’re not going to lose all these great people, and we’re not going to lose all these simulation tools,” John Cooper, the company’s C.E.O., told me. A year later, it won a contract with Cargill to fit its proprietary wing sails, WindWings, onto a bulk carrier.
A diesel ship retrofitted with wing sails could reduce its fuel consumption by as much as thirty per cent, according to a BAR Technologies simulation. When I ran that figure by Elizabeth Lindstad, a chief scientist at sintef Ocean, an independent think tank that advises maritime companies, she described it as optimistic but possible, at least along trade routes with the right wind conditions. Paul Sclavounos, a professor of naval architecture and mechanical engineering at M.I.T., agreed. Savings on that scale, he said, could reshape the economics of shipping. Many multinational companies, including Cargill, lease their vessels from shipbuilders and pay for fuel expenses. It can cost more than twenty-four thousand dollars per day to fuel a bulk carrier; a company that adds wing sails to one ship could save thousands per day, and “pay back its investment in a year or two,” Sclavounos told me. The wings could then provide decades of propulsion for only the price of maintenance. “It’s clearly a relatively inexpensive technology,” he said. “It makes a lot of sense.”
Wind propulsion will help some ships more than others. Container ships are responsible for about twenty-three per cent of shipping emissions, according to a report from the International Council on Clean Transportation, but it’s difficult to squeeze sails onto a deck that’s cluttered with metal boxes. In contrast, bulk carriers, which are responsible for roughly nineteen per cent of shipping emissions, are perfect laboratories for wind propulsion, thanks to their open decks and relatively small size. The same goes for more specialized vessels that carry vehicles such as cars, trucks, and trains. These Ro-Ro ships—short for “roll on, roll off”—don’t need any help from cranes when they sail into port, and they tend to stash their cargo in a hold, leaving plenty of room on deck for sails.
Of course, you can’t just slap an airplane wing onto the deck of a ship and expect it to work. Airplane wings provide lift, but rely on jet engines to provide thrust; a wing sail, in contrast, must provide thrust of its own. Engineers are now studying how many wings they can cram onto the deck of a ship, and how high they can go without threatening the stability of the vessel. Some are building wing sails that fold or telescope so that they don’t bump into bridges or cranes. Cargill plans to try out its first set of WindWings on a commercial route in early July; BAR Technologies is also installing WindWings on a ship owned by Berge Bulk this year. Cooper told me, “If you fast-forward three or four years, we’re looking at building hundreds of wings.”
Adiesel ship that’s retrofitted with wing sails will pollute much less than its peers—but it still won’t be clean. “We know that wind alone is not going to bring us to zero carbon,” Dieleman told me. In the future, ships will likely need to swap out dirty fuels for alternatives with low carbon footprints. Cargill has four vessels in production that run on methanol, which produces far lower emissions at sea. At the moment, though, most of the methanol on the market is “brown,” Dieleman said—in other words, made from fossil fuels. Bio-methanol can be made from agricultural waste or seaweed, and another fuel, green hydrogen, can be generated from water and clean electricity. But they are still a kind of Unobtanium, because no one has yet figured out how to produce trillions of gallons at low cost.
Then again, why not rethink cargo ships entirely—from the keel up—so as to squeeze as much power as possible from the wind? Lindstad, the scientist at sintef Ocean, and her research partners have argued that the ships of the future should combine wind propulsion with slender hulls that reduce drag. They estimate that some vessels designed in this way could cut down fuel use by as much as fifty per cent. Cargo ships may also need to chart new courses, following trade winds that were largely ignored in the age of diesel.
A few months ago, I travelled to Lunenburg, Nova Scotia, a Canadian port town known for its fisheries and shipyards, to meet Danielle Southcott, a sustainable-shipping entrepreneur who’d recently moved there. On the day we met, in a loft that serves as an event space, she was introducing her company, Veer Group, to about fifty people, mostly from the local shipping community. The crowd was a blur of leather jackets, scruffy beards, interesting glasses, and knit caps: artsy, but also appropriately attired to carve a mizzenmast or hack some barnacles off a hull. Southcott, at thirty-three, fit right in—she wore all black, and her long, dark hair curtained her face each time she glanced down at her notes.
When she flashed a rendering of a sailing ship onto the screen, I could sense the collective puzzlement in the room. It looked like the ghost of a traditional three-masted clipper, with no visible cables or ropes.
A man raised his hand. “I don’t see any rigging,” he said.
Southcott explained that Veer was using a sailing system called the DynaRig, which had been tested on two luxury yachts, the Maltese Falcon and the Black Pearl. Though the sails are made from cloth rather than rigid panels, they have something in common with wing sails: they’re shaped much like broad airplane wings and are controlled through a computer. Each mast can rotate more than a hundred and eighty degrees.
The ideal cargo for Veer’s first ship, Southcott said, would be something like designer shoes: they have high markups and low weights, and customers pay a premium for the latest and greatest. Imagine the fashionistas, she went on, who would pay upmarket prices for net-zero delivery. According to design plans, the ship could attain speeds of eighteen knots, or more than twenty miles per hour, on wind alone. As she explained her stiletto-heeled business model to her steel-toe-boot audience, the mood seemed to shift from skepticism to glee. She was questioning a basic assumption in the shipping industry—the cheaper, the better—and imagining a new one: the better, the better.
Later that evening, some audience members decamped to a creaky wooden pub called the Knot, and I eavesdropped as two master mariners vented about the shoddiness of container ships. The ships would be more fuel efficient with rounded hulls, they observed, but they’re built like steel boxes to save money. The think tank at the bar agreed that a Veer-style ship would work just fine from a technical standpoint—one guy even assured Southcott that gantry cranes, which pluck boxes off of ships, would be able to maneuver around masts without knocking them over. But they wondered whether she could build a business in an industry that usually competes on rock-bottom prices.
In Southcott’s telling, the key variable for upscale retailers is not cost but speed. She’d learned that lesson in 2021, she told me, when she was running a company that built wooden sailing ships for freight delivery. Her potential clients were eager to lease a net-zero cargo vessel—but not if it plodded along so slowly that it added days or weeks to the delivery date. So she contacted a friend at Dykstra Naval Architects, a Dutch firm that designs classic and modern yachts. Southcott brought preliminary renderings of a Veer ship, to be built from composite materials and steel, to the cop26 climate conference, in Glasgow. Soon after she announced her venture, she raised six hundred thousand dollars from four investors. She used the money to hire Dykstra engineers to draw up technical plans for the first ship, and to assemble a startup team.
Southcott told me that her investors have now pledged more than two million dollars, enough for her to seek financing from a bank and submit bids to shipyards that could build Veer’s first ship. She hopes to build it in a country where she can use “green steel,” which is manufactured without fossil fuels. If she succeeds, she’ll be working in a new slice of the shipping sector—one that’s far smaller than the world of container ships and bulk carriers, but one with a clearer path toward zero emissions. The C.E.O. of Dykstra, Thys Nikkels, told me that, with souped-up sails and turbines that can charge batteries, it’s already possible to build a speedy ship with a small footprint. “On a sailing yacht, that’s quite feasible,” he said. “But it hasn’t been done on a commercially operated cargo vessel.”
There’s at least one other direction in which cargo ships could innovate: up. “The higher you go, the higher the wind velocity,” Mikael Razola, the technical director at Oceanbird, a Swedish company affiliated with the shipping company Wallenius Marine, told me. Oceanbird researchers have used lidar imaging to map wind pressure from the surface of the ocean to an altitude of nearly seven hundred feet. The company has designed wings for a Ro-Ro ship, set to launch next year, that will be outfitted with six towering wing sails that reach more than one hundred and thirty feet into the air. The wings will be paired with a special lightweight hull that is aerodynamic and reduces drag. The company claims that the design will reduce the ship’s emissions by a striking sixty per cent. But the trade-off for that efficiency is speed: on existing routes, the car carrier with sails will take days longer than other ships.
In February, I opened my laptop and beamed into a factory outside of Shanghai, where workers were hurrying to build WindWings for Cargill’s fleet. A representative of Yara Marine Technologies, which is leading the installation, had agreed to a virtual tour of the factory on the condition that I refrain from quoting the “cameraman”—a factory worker who walked me around the facility with his phone. As it turned out, the language barrier was big enough that my guide communicated mostly through gestures. He started his tour by pointing his phone at a simplified diagram of the wings, which looked like the instructions for some ikea furniture. A mast—basically, a metal tube with arms—would be fitted with panels to catch the wind; this assembly would sit on a swivelling base that could turn the wings around. The ikea vibes ended there. When my guide pointed his phone up, I saw the huge steel frame of a WindWing waiting to be filled with hydraulic piping and wiring for sensors, which will detect air pressure.
The guide walked me to a welding platform, where workers scurried around a mast that had been tipped onto its side. Laid horizontally, the steel frame turned into a kind of enormous hallway, with eight or ten feet of headroom for the welders who worked inside it. As I watched a man in white coveralls climb into the base of one of the masts, its scale sank in. The man looked like an action figure. The tour continued to a nearby dock, where the masts would be fitted onto ships. The wings would be so immense that they would block the sight lines across the deck, so, rather than navigating with the naked eye, the crew would depend on digital cameras.
One chapter in “Trade Winds,” De Beukelaer’s book about his voyages on the Avontuur, is titled “Ship Earth.” The planet, he writes, has something in common with a seagoing vessel. Earth is always at risk of a new emergency, and its inhabitants have little choice but to work together with finite resources. He quotes Ellen MacArthur, a British sailor who once set a world record for the fastest round-the-world voyage on a solo sailboat. “Your boat is your entire world,” MacArthur later said. “What we have out there is all we have. There is no more.” After retiring from sailing, in 2010, she created a foundation committed to creating a circular economy, which aims in part to eliminate waste and climate pollution.
De Beukelaer told me that when wind waylaid the Avontuur in the Gulf of Mexico, the crew agonized about dwindling supplies and looked for unconventional ways to use what they had. They tried reinforcing a sail with glue. They scoured the deck with a thermometer, looking for places where they might try solar cooking. When that failed, the bosun fashioned insulation pads for their cooking pots, which stretched out their limited supply of gas. At the end of their six-month voyage, the crew of the Avontuur published a joint statement. “We have learned—by stitching a patch on a torn sail, splicing together a frayed rope, being creative with limited resources—that nothing is ever truly broken,” they wrote. “Solutions and innovations abound when your whole world is contained within a steel hull.”