Market Insight
SPRING 2018

Annual report
Year 2018

Market Insight
FALL 2018

Market Insight
WINTER 2018-2019

9 Available chapters - Download the PDF

9. Outlook

• The transportation demand for agricultural products is strongly correlated with harvest results in both the Rhine and Danube regions.
• The poor harvest results in the Rhine region in 2016 directly impacted Rhine traffic in 2016 and 2017. There was a decrease of 14% in this segment between 2016 and 2017.
• The forecast for the transport of grain in 2018 points to an increase, in the wake of a recovery of grain harvests in 2017 and 2018.
• Biomass is a market segment with a high potential in the long term, and biomass commodities are statistically part of the foodstuffs segment.

 

TRANSPORT

OF AGRICULTURAL PRODUCTS

Agricultural products are an important segment in inland waterway transport. It is especially important for the Danube countries, where their share in total transport performance reaches 40% in Bulgaria, 34% in Romania and 26% in Hungary. But in some parts of Western Europe, it also has a high share in total transport performance, i.e. 23% in France and 47% in Luxembourg.

 

COUNTRIES IN THE EU WITH THE HIGHEST SHARE OF AGRICULTURAL PRODUCTS IN TOTAL INLAND WATERWAY TRANSPORT PERFORMANCE (SHARE OF AGRICULTURAL PRODUCTS IN %)*

Source: Eurostat [iww_go_atygo] * dark blue = Rhine countries, red = Danube countries

CH9 Countries in the EU with the highest share of agricultural products in total inland waterway transport performance

 

Bad harvest results, which occurred in western Europe in 2016, or in the Danube region in 2017, can have a strong impact on the overall transport evolution in these countries. In the Danube region, this segment is very important for middle Danube countries (Hungary, Croatia, Serbia), where large parts of the IWW transport demand is focused on agricultural products, foodstuffs and food products. The decline in harvest results in the Danube countries in 2017, and in Rhine countries in 2016, as mentioned in chapter 2, is seen in the following figures.

 

GRAIN HARVEST VOLUMES IN MIDDLE DANUBE COUNTRIES (1000 TONNES)*

Source: Eurostat [apro_cpsh1]. * Cereals without rice, including production of seeds

CH9 Grain harvest volumes in middle Danube countries

 

GRAIN HARVEST VOLUMES IN RHINE COUNTRIES (1000 TONNES)*

Source: Eurostat [apro_cpsh1]. * Cereals without rice, including production of seeds. Benelux = Netherlands, Belgium and Luxembourg

CH9 Grain harvest volumes in Rhine countries

 

The relationship between harvest results and the transport of harvest products on inland waterways is revealed when looking at the total grain harvest volumes in Rhine countries (Belgium, France, Germany, Luxembourg, the Netherlands) compared to the transport performance of agricultural products on inland waterways in these countries (see figure).

 

GRAIN HARVEST OF RHINE COUNTRIES* AND IWW TRANSPORT PERFORMANCE FOR AGRICULTURAL PRODUCTS

Source: Eurostat [apro_cpsh1], [iww_go_atygo] * Belgium, France, Germany, Luxembourg, Netherlands

CH9 Grain harvest of Rhine countries and IWW transport performance for agricultural products

 

With the exception of the year 2010, an increase or a decrease in the harvest volumes was followed by an increase or decrease of transport demand for agricultural products. The year 2016 was a time when harvest results decreased strongly in France and Germany, leading to a strong fall in transport activity in 2016 and in 2017.

To assess the correlation, the arithmetic averages of harvest results (h) of two consecutive years [1/2 × (ht-1 + ht)] were used as an indicator which was compared with the transport demand in year t.

The reasoning behind this is the following: if a bad harvest occurs, as it did in 2016, this has an influence not only on the transport of grain in that same year, but also in the following year. Grain is harvested in summer, so until a new harvest comes on the market, the result of the previous year still influences the amount of grain transport.10

Taking into consideration France, which is the western European country with the highest harvest volumes, and collecting data back until the year 1990, the following long-term correlation is observed.11

10 Indeed, the correlation between the harvest results of year t and transport demand in year t is much weaker than the correlation between the average harvest results of years (t-1) and t with the transport in year t.
11 Each point in the figure corresponds to a combination of grain harvest volumes and transports of grain in France for a particular year.

 

GRAIN HARVEST IN FRANCE AND TRANSPORT OF AGRICULTURAL PRODUCTS IN FRANCE (1990-2017, IN 1000 T)

Source: Eurostat [apro_cpsh1], Voies Navigables de France, CCNR analysis

CH9 Grain harvest in France and transport of agricultural products in France

 

The annual rate of change of grain harvests in France is now compared with the rate of change of agricultural transport in France. The result is seen in the following figure.

 

GRAIN HARVEST IN FRANCE AND IWW TRANSPORT OF AGRICULTURAL PRODUCTS IN FRANCE (2001-2017, IN %)

Source: Eurostat [apro_cpsh1], [iww_go_atygo] * Belgium, France, Germany, Luxembourg, Netherlands

CH9 Grain harvest in France and IWW transport of agricultural products in France

 

There is a cyclical structure in the harvest results in France. Peaks occurred in the years 2005, 2009 and 2015, and dips in the years 2006, 2011 and 2016. Meteorological or agro-scientific evidence could explain this structure.

The French Ministry of Agriculture, in particular its department for statistics and market observation, AGRESTE, publishes a bulletin each month, in which monthly values for the actual and previous harvest seasons are presented with a time lag of two months.

 

MONTHLY GRAIN HARVEST IN FRANCE PER HARVEST SEASON (IN 1000 TONNES)

Source: Ministère de l’agriculture et de l’alimentation / Bulletin mensuel « Grandes Cultures »

CH9 Monthly grain harvest in France per harvest season

 

These data show the bad harvest results in July 2016, which were the main cause of a decrease in grain harvests in the season 2016/2017. The harvest results in the season 2017/2018 are very close to the results of the season 2015/2016.

 

GRAIN HARVEST IN FRANCE, TRANSPORT OF AGRICULTURAL PRODUCTS (1990-2017) AND FORECAST FOR 2018

Source: CCNR analysis based on Eurostat [apro_cpsh1], Voies Navigables de France

CH9 Grain harvest in France, transport of agricultural products (1990-2017) and forecast for 2018

 

Taking into account the harvest forecast and the relationship between harvest and transport volumes, the transport of agricultural products is expected to reach around 10.1 million tonnes in France in 2018. Compared to 2017, this would mean an increase of 15%. Compared to the results in the time period 1990-2017, it would also be a result at the upper end of the spectrum.

 

BIOMASS AS A GROWTH OPPORTUNITY

FOR INLAND WATERWAY TRANSPORT

Structural shift of energy sector and IWT-related segments

Over the past two decades (1996-2016), the trend in primary energy production in Europe is negative for fossil fuels and nuclear energy. The sectors where this evolution is the most striking are petroleum products with a 57% decrease and fossil fuels whose production fell by 51%. However, renewable energy production is characterised by a tremendous growth of 139% over the same period.

This structural evolution is partly due to the energy transition initiated in Europe but also to a progressive shift of energy public policies towards renewable energies. This is at the expense of industries which have so far been considered as pillar sectors for inland waterway transport, especially in the Rhine area, and coal and mineral oil products.

 

PRIMARY ENERGY PRODUCTION IN THE EU (MTOE)

Source: Eurostat [nrg_100a] CCNR analysis

CH9 Primary energy production in the EU

 

Apart from the construction sector which is assumed to expand its activity in Europe over the next few years, most of the traditional IWT-related sectors have limited outlooks in terms of growth. Coal consumption is expected to decrease with the progressive phasing-out of coal fired power plants and the strong commitment of policy makers for the greening of the energy sector. The demand for oil has been decreasing over the last ten years and is expected to stagnate whereas gas consumption and metals production should slightly increase.

However, agricultural products show an upward trend for the years ahead promoted by the rising importance of biomass in the European market of energy resources. The restructuring process that is occurring in the agricultural sector around the growth of biomass demand provides important opportunities for IWT.

 

BIOMASS: DEFINITION AND KEY FIGURES

• The biomass is one type of renewable energy source and represents all the organic matters that can become sources of energy. It can be exploited either directly via wood combustion or indirectly after a methanation process (biogas) or a chemical transformation (biofuel).

 

• Three forms of biomass can thus be distinguished: solid biofuel, liquid biofuel and biogas. Solid biofuels derive from wood and wood products such as wood pellets. Electricity and heat are produced by a combustion process that releases chemical energy from wood. As for liquid biofuels, they are mainly used in the transport sector. First generation liquid biofuels are generated from agro-food products such as soybeans, rapeseed and sugarcane. They include biodiesel (produced from plant oil) and bioethanol (produced from sugar and starch). Second generation biofuels are derived from non-food plant matters such as agricultural waste.

 

• Given geographic and climate aspects, and the fact that European countries are for the most part urbanised countries, other sources of renewable energy such as hydro, solar and wind have limited outlooks of development. On the other hand, biomass is characterised by a high degree of stability and predictability, and hence appears as a great potential for the sector of renewable energy in Europe.

 

• With 65% of the demand for total renewables in 2016, biomass is by far the most important source of renewable energy in Europe.

 

• Since 1990, inland consumption of biomass in the EU has been multiplied by 3.

 

DISTRIBUTION OF BIOMASS INLAND CONSUMPTION IN 2016 (EU-28)

Source: Eurostat [nrg_100a] CCNR analysis

CH9 Distribution of biomass inland consumption in 2016

 

With the saturation of its traditional sectors, inland shipping should look for new market segments to be potentially absorbed. The extensive analysis of three inland ports – Straubing (Germany), Mannheim (Germany) and Liège (Belgium) – that are involved to a different degree in the biomass and bioenergy sectors, suggests that the biomass segment may have a significant role in the upcoming development of inland ports and the IWT sector in general.

 

PORT OF STRAUBING-SAND (GERMANY)

Inland waterway traffic in 2017: 800,000 tonnes; share of biomass within total goods traffic: 85%

 

The port of Straubing is a Danube inland port located in the lower Bavaria region in southern Germany. Lying in a fertile area where agriculture, forests and wood are abundant, the port specialises in agricultural products. More precisely, biomass and the exploitation of its energy potential, represent the core activity of the port. With the support of local and regional authorities, the port aims to develop a cluster of green chemistry and biotechnologies which combines innovative bioenergy production and the inland waterway transport sector.

 

MODAL SPLIT IN THE PORT OF STRAUBING (2015-2017, IN %)

Source: port of Straubing

CH9 Modal split in the port of Straubing

 

STRUCTURE OF WATERSIDE GOODS TRAFFICS IN THE PORT OF STRAUBING (2017)

Source: port of Straubing

CH9 Structure of waterside goods traffics in the port of Straubing

 

Road transport is still the dominant mode of transport in the port of Straubing, but a progressive shift from road to inland waterway transport is taking place with increasing imports of biomass from the Danube countries (Hungary, Austria) and the ambition of the port authority to promote alternative modes of transport.

The majority of the biomass transhipped in the port of Straubing encompasses soy and rapeseed, much of which is used by a food-processing company to produce liquid biofuel (rapeseed oil). A by-product of this transformation is shredded rapeseed used in the foodstuff sector in the Netherlands and Belgium. As for rapeseed oil, it is transported to Austria and Mainz by rail where it is transformed into biodiesel in bio-refineries.

The use of inland waterways for the transport of biomass and biomass products offers several advantages. From a logistical point of view, very high volumes of biomass are transported since biofuel production requires the transport of large quantities of raw materials. Besides, the biomass transported to Straubing is mostly non-perishable, which means that it can be stored for several days. Inland shipping, for which travel times are longer than for rail and road transport, is thus particularly adapted when it comes to biomass transport. From the port’s perspective, IWT of biomass provides a significant added value since its activities aim at promoting the sector of renewables and, to a large extent, sustainable development.

 

PORT OF MANNHEIM (GERMANY)

2017 total waterway traffic: 9.6 Mio t;
biomass traffic: 1.5 Mio t

 

The activities of the port of Mannheim are closely linked to the bioenergy industry. The biomass –mostly rapeseed – is transported via inland waterways and road to the port of Mannheim. It comes from the Benelux area (Rotterdam), from north-eastern France (Metz, Ottmarsheim, Alsace) and from agricultural regions of Germany via the Neckar and the Main.

 

EVOLUTION OF VOLUME OF BIOMASS TRAFFIC IN THE PORT OF MANNHEIM (IN THOUSAND TONNES)

Source: port of Mannheim

CH9 Evolution of volume of biomass traffic in the port of Mannheim

 

STRUCTURE OF FOODSTUFFS AND ANIMAL FODDER SEGMENT IN THE PORT OF MANNHEIM (2017)

Source: port of Mannheim

CH9 Structure of foodstuffs and animal fodder segment in the port of Mannheim

 

The volume of biomass and biodiesel transported to the port of Mannheim has been relatively stable since 2015. Rapeseed is the main input for bioenergy production and thus represents the largest volume with approximately 750,000 tonnes transported per year. The traffic of shredded rapeseed, which is a by-product of rapeseed oil production, reached around 350,000 tonnes in 2017.

The oil mill (Ölmühle Bunge) receives the rapeseed, stores it, and produces rapeseed oil and shredded rapeseed, a by-product used in the foodstuff segment. Most of the rapeseed oil is transported to the port’s company, Mannheim Bio Fuel GmbH, to manufacture biodiesel. The nominal capacity of the production site of Mannheim is 120,000 tonnes of biofuel per year.

From the point of view of the companies specialising in biomass in the area of Mannheim, inland waterways offer important opportunities in terms of transport logistics. Indeed, inland shipping provides an ecological, competitive and reliable way to transport very high volumes of biomass. Using IWW for trade in biomass and biofuel is particularly beneficial since they provide a direct link to the Amsterdam-Rotterdam-Antwerp set of maritime ports which forms a key component of the European oil supply chain.

As far as the port of Mannheim is concerned, the growth of the biomass segment is an opportunity to build up its image on the promotion of inland shipping as a sustainable mode of transport consistent with environmental matters and energy transition.

 

PORT OF LIÈGE (BELGIUM)

Total waterway traffic (2017): 16 Mio. tonnes;
increase of wood products traffic since 2005: +330%

 

As the largest inland port in Belgium and third largest European inland port, the port of Liège is located at the heart of Rhine-Scheldt-Maas river basin, the densest river basin in the world. In 2012, the difficult economic setting and the steel industry crisis significantly affected freight traffic in the port of Liège whose activity until then strongly relied on iron ores and coal segments of transport.

Nevertheless, since 2014, the port has managed to recover its pre-crisis traffic volumes by investing in new infrastructures (multimodal logistic platform Liège Trilogiport) and by restructuring its activity around expanding segments of IWT which are container and biomass transport.

In 2005, the Awirs coal-fired power plant that lies on the left bank of the Maas river was fully reconverted to a biomass plant. This is a first worldwide project and is, in line with the commitment of Belgium under the 2020 climate and energy package of the European Commission, to increase the share of renewables in the total energy consumption to 13%.

In order to produce electric power, the biomass plant uses wood pellets as fuel source and these are produced mainly in Belgium, France and Germany. Around 1,200 tonnes of wood pellets are transported to the power station by ship on the Maas or by road.

 

TRAFFIC OF WOOD PRODUCTS IN THE PORT OF LIÈGE

Source: port of Liège

CH9 Traffic of wood products in the port of Liège

 

EU GROSS OUTPUT OF WOOD AND WOOD PRODUCTS (EU GROSS OUTPUT IN BILLION REAL US$ – 2010 US$)

Source: Oxford Economics, CCNR analysis

 

The conversion of the power plant into a biomass plant opened up a new segment of transport in the port of Liège. In 2007, wood pellets delivery by inland waterways reached 400,000 tonnes and increased over two years. From 2010 to 2014, inland traffic of wood products in the port of Liège substantially declined. This drop was due to the weak activity of the biomass power station which suffered from a poor profitability in the early stages of its operations. Indeed, the operational costs of the plant were too high, with the increase of wood pellet prices, while the price of electricity was considered too low.

Nevertheless, wood products traffic in the port of Liège has been growing since 2015 due to public support and the change of legislation concerning green certificates granted to the biomass plant. In addition, the wood industry activity in Europe is expected to grow over the next few years. The wood product traffic in Liège follows the same trend as wood production in the EU, and this expected growth is a positive sign for the inland traffic of wood and wood products in the port of Liège.

The case of the port of Liège reveals that although the biomass market can be genuinely beneficial for the activity of the port in terms of market opportunities, it is still an emerging segment characterised by a vulnerable growth. The market of wood and wood products is cyclical and very volatile. Besides, inland shipping of wood products in Liège strongly depends on the activity of the biomass plant which is itself largely supported by public authorities.

 

Conclusion

The study of the two German ports and the Belgian inland port reveals two important aspects of the integration of the biomass segment into the IWT market. On the one hand, the biomass sector’s characteristics – proximity with the agricultural industry, high volumes required for biofuel production, large growth potential, political commitment to renewables show positive signs for inland shipping.

On the other hand, the three case studies show that in most cases, biomass-related companies are located near the port or have even been developed at the port’s initiative. This suggests that inland ports are not only logistic platforms for IWT, but also effective processing and production sites for the bioenergy sector and to a greater extent for industrial sectors with high innovative potential. Thus, inland ports as industrial actors could also benefit from the absorption of the biomass segment by IWT to become economic clusters with a European reach.

 

LONG-TERM TRENDS FOR IWT MARKETS

 

DOMESTIC DEMAND FOR OIL AND COAL IN THE EUROPEAN UNION *

Source: Oxford Economics. * in mtoen (1000 tonnes)

 

GROSS REAL OUTPUT OF CHEMICALS AND AGRICULTURAL PRODUCTS IN THE EUROPEAN UNION *

Source: Oxford Economics. * in billion US-$, 2010 prices

 

GROSS REAL OUTPUT OF IRON AND STEEL AND IN THE CONSTRUCTION SECTOR IN THE EUROPEAN UNION *

Source: Oxford Economics. * in billion US-$, 2010 prices

 

Oil and coal demand in the European Union is expected to decrease in the long term, due to decarbonisation in the energy sector, saving measures in energy demand, and in particular the shift from oil and coal to renewables. These downward orientated trends will obviously affect transport demand for coal and mineral oil products.

Limited growth is foreseen for the output of agricultural products. Iron and steel production is expected to stagnate in Europe in the long term, although the development is more positive in certain countries (e.g. Germany).

The construction activity and the chemical production are part of the main growing segments for inland waterway transport. Other growing segments are new markets such as the biomass segment, the urban waterway and container transport.

Annual report
Year 2018

0Chapter available

Market Insight
FALL 2018

0Chapter available

Market Insight
WINTER 2018-2019

A project co-financed byEuropean Commission

Top of the page