• The detailed analysis of several different new markets revealed one common feature: new markets for IWT exist, with high potentials. But these markets do not fall into the hands of inland navigation similar to ‘ripe fruits’. They are fraught with intermodal competition, commercial and technical challenges, risks and uncertainties to varying degrees. Some of these new markets might require clear deviations from the previous state-of-the-art model in terms of vessel technology (including automation), vessel design (how to integrate batteries or hydrogen tanks on board) and size of vessels, as well as logistical concepts.
• The urban transport of freight, passengers and waste is an activity where inland navigation meets the need of society and governments to find solutions for existing and growing urban problems, in terms of saturation of road infrastructure, related negative externalities, and ecological problems in cities. The greater these problems become, the more inland navigation can position itself as an adequate solution. However, this presupposes a ‘greening’ of inland vessels themselves in order to meet the demands placed on new city logistics and in order to be ‘credible’.
• But even if a complete greening of vessels that are active in urban freight, passenger and waste transport has not yet been achieved, these new market activities are important for making experiences in city logistics, to find suitable logistical concepts, and to gain more understanding about the needs of the demand side in urban logistics (supermarkets, construction industry, parcel delivery, waste transport, etc.).
• Apart from urban transport of freight, passengers and waste, the transport of alternative energies was identified as a new market. Within this field, three different submarkets (wind turbines, biomass/biofuel, hydrogen) were analysed. A common feature is a rather high degree of risk coming from the regulatory and political sphere and from partly unknown transition pathways in the future.
• The logistical activities in the energy sector represent a derived transport demand, dependent upon the generation of a certain type of energy in certain volumes per year, which itself depends upon political and regulatory incentives and technological developments. The food-fuel debate in the biomass/biofuel market is a good example of how market conditions can change over time.
• While this is not in the scope of the report, it is worth mentioning that beyond the use of IWT as a transport mode for specific types of cargo in urban areas, new logistics and new usage concepts involving inland vessels could also emerge in the future. Such new concepts could further strengthen the use of inland vessels, notably in urban areas, and could also be considered as new opportunities for inland vessels. For instance, such new concepts could be self-unloading vessels with on-board handling equipment or shared barges (several users for the same barge). Similarly, new usage for barges could consist in logistical chains where the clients collect their goods directly from the barge (no last mile). For instance, the users would receive their parcels directly from the barge, which would require designing barges in such a way that receiving the public, withdrawals of parcels for individuals, shipping and returns management, preparation of orders, departure start of delivery rounds can be made on board. Barges could also be used as floating stocks. Goods, such as clothes, could be stored on barges in the immediate vicinity of sales areas and be made available at short notice in case of a peak in demand.
• All in all, it seems that the abovementioned urban transport of freight, passengers, alternative energies and waste represents a promising but, at the same time, challenging array of new opportunities, which should be conquered by inland navigation companies with the necessary help from public authorities, aiming to achieve more sustainable logistics in the future.

CONSIDERATIONS REGARDING URBAN WATERWAY TRANSPORT

POTENTIALS

• IWT offers potential for urban logistics as shown by the number of existing projects and those under development. Several projects are operational, showing that inland waterway transport in urban areas can be an economically viable activity under specific circumstances, despite the competitive pressure from road transport. Wiegmans and Konings (2016) had already shed light on the potential of IWT in urban contexts.¹²⁰
  Of course, one of the main pre-conditions for IWT to be considered as part of the urban logistics/passenger transport chain is the location of the waterway, which must be close/flowing through urban centres. This might be the case in most cities, but not in all.
• It seems that specific market segments are suitable for IWW transport in cities, namely, transport of passengers (touristic and commuting activities), parcels, building material, food and retail products as well as waste.¹²¹
  France, Belgium and the Netherlands appear as the countries where urban transport using waterways has developed the most. Another interesting element is that such transport solutions seem to be viable in very large cities (as shown by projects in Paris or Amsterdam) but also in medium-size cities such as Lyon or Lille. An advantage of inland navigation is that it can transport such goods in different forms (pallets, bulk, barrels, containers).
• The fact that IWT enables the reduction of congestion on roads as well as other negative externalities, in particular accidents, thereby addressing safety and environmental challenges, are without doubt essential factors for a potential scale-up.
• Combining low emission inland vessels – for example fully electric or vessels with hybrid propulsion – with an environmentally friendly last-mile transport mode (e.g. bicycles or electric trucks) creates an efficient, clean, and sustainable urban transport system. Several projects already in operation demonstrate that this can be possible.
• Other technological developments, in particular automation and digitalisation, could also play in favour of IWT in urban centres, in particular from a cost perspective (reduced labour costs when sailing during transshipment).
• Public policy plays an important role for the development of IWT in urban centres. For instance, with regard to the transport of building material, IWT can be encouraged by integrating specific clauses in government tenders relating to the construction of important public projects as is the case with the Grand Paris Express project. Similarly, some European cities are restricting access to specific areas for heavy-duty vehicles through low-emission zones which can be a lever for the development of IWT.
• However, there are remaining obstacles to be overcome to allow the full potential to unfold. The following paragraphs aim to shed light on these aspects. Obstacles range from regulatory barriers up to a traditionally biased mindset of stakeholders without excluding stricto sensu economic factors.

 

OBSTACLE 1: REGULATION AND ADMINISTRATIVE COSTS




• Regulation tends to lag behind innovative solutions. An example lies within the autonomous sailing on waterways in city centres. No regulation has yet given the green light even on trials on public waterways without at least one skipper onboard. In Belgium, a decree was passed in 2019 that can give temporary exemptions in testing innovative solutions in this regard.¹²²
• Competences and processes for permission often go hand in hand with immense administrative costs and time. As start-ups might not have those capacities in terms of time and human resources, promising projects might be slowed down or even halted. For this issue, the platform Interlud in France helps to consult and harmonise agreements between various stakeholders and institutions from cities to agglomerations or counties.
• Vessels face costs for docking stations, ports’ admissions and other permissions for navigation from which road transport is mainly relieved. Hence, regulations in this regard are not favourable to IWT compared to road transport, and thus do not provide equal opportunities for the different modes of transports.

 

OBSTACLE 2: ECONOMIC VIABILITY




• The economic viability of urban freight transport is difficult to assess in a global or even quantitative way, as each project is embedded in its own market environment and has its own specific conditions, operational areas, vessel capacities, turnaround times, competitors and other framework conditions.
• It can be observed that many pilot projects or even projects that are already in operation received public subsidies, in particular in the event of investing in a vessel with better emission performance (i.e. in the case of urban transport, generally operating with batteries). It will be relevant to assess in a few years whether such public supported projects have been able to maintain a viable business case even without public support.
• In general, it is observed that many existing and economically viable projects are operating with personnel. However, when it comes to pilot and research projects, stakeholder interviews often revealed the aim of developing urban freight projects with no personnel onboard (automation). As a reason, high staff costs were put forward.
• However, automation still requires in certain cases some kind of human interaction in the sense of loading, unloading or monitoring and remote control. Apart from that, automation creates challenges on the technological level for ship design and ship technology, challenges which are currently difficult to overcome. The economic viability of such projects can be out of reach if research and development costs cannot be lowered in the near future.
• Automised vessels need to be developed, designed and tested in towing tanks and in natural test areas. The technology required for autonomous sailing is ambitious and requires high costs in research and development. The uncertainty of achieving a positive return on investment after a number of years of successful operation might deter many actors from such a project right from the start.

 

OBSTACLE 3: COMPETITION FOR SPACE WITH OTHER ECONOMIC SECTORS IN CITIES




• The continuous demand for space that comes from the housing market, in particular defines another barrier for inland navigation in an urban setting. Within this competitive setting, it is often the case that not enough space can be granted for logistical purposes.
• In cities, competition exists also between tourism and logistics. Indeed, transport infrastructure needs to integrate well in the urban landscape. A significant example can be seen in Lyon, where the development of city logistics on the Saône is hampered, as platforms for loading and unloading of freight in the heart of the historical city centre of Lyon would probably not be well seen. On the Rhône, quaysides and logistics infrastructure are often hidden under bridges, which support their development. Another example is Strasbourg, where pioneer companies, willing to develop inland waterway transport solutions in the city center are criticised for placing an industrial set-up in one of the most visited areas and thus ‘reducing’ the beauty of the sight itself.
• To address this, it is important to anticipate the integration of transport logistics in cities, for instance in the context of the multiannual urban planning of relevant cities, and to ‘reserve’ some space for logistics activities.

 

OBSTACLE 4: ROAD TRANSPORT CULTURE IN LOGISTICS AND LACK OF KNOWLEDGE ABOUT IWT




• Another obstacle that emerged on many occasions during the interviews relates to a cultural preference for road transport. Compared to IWT, road is perceived as more flexible and is more familiar to the operators, even if it might not be the most environmentally friendly modal choice. This issue was also identified as an obstacle in the other pillars.

CONSIDERATIONS REGARDING CIRCULAR ECONOMY AND WASTE TRANSPORT

POTENTIALS

• Demographic growth, in combination with saturated road infrastructure and high emissions and other negative external effects provoked by road transport in cities, are important factors which offer great potential for inland waterway transport of waste in urban agglomerations.
• In addition, electricity generation from municipal renewable waste has strongly increased in the last 30 years, a growth which is expected to continue with the transition towards circular economies. New transport flows are expected to emerge from such a transition.
• Inland ports are also ideal locations for the development of circular economy activities, which is certainly an opportunity for the transport of products resulting from circular economy activities by inland vessels.

 


OBSTACLES

• Obstacles identified are merely identical to those obstacles put forward for urban freight transport (see 5.1). Because of the specificity of this type of cargo, there might be a reluctance to allow for waste handling in city centres.

CONSIDERATIONS REGARDING TRANSPORT OF CARGO FLOWS TRIGGERED BY THE ENERGY TRANSITION

• The growing pressure to extend capacities for renewable energies at the expense of fossil fuels presents a potential market in which inland waterway transport can be advantageous. The research carried out within this report by means of face-to-face semi-structured interviews and analysis of available data focused on the transport of wind turbines, biomass, biofuel and hydrogen. The results of this qualitative-quantitative analysis lead to different considerations for the three sectors considered.

TRANSPORT OF WIND TURBINES

Potentials
• For wind energy, IWT appears to be advantageous for many reasons:
  – No competition from rail, only from road;
  – Inland vessels can cope with increasing size of the turbines;
  – Fewer size restrictions or administrative barriers for inland vessels compared to road, and their capacity makes them suitable for this market.
• A key success factor for IWT to be a preferred mode of transport over road, lies in the proximity of the wind turbines production site or the end site where the wind turbines are delivered to the inland port. Indeed, it is an essential element to limit transshipment costs.
• Other trends, in particular the increased production of wind turbines outside Europe, acts in favour of IWT. This trend leads to more wind turbines being imported to Europe via maritime transport and seaports. Hence, IWT is becoming the logical follow-up mode of transport towards the hinterland in these cases.
• The further potential of transporting components of wind turbines is of course intensively linked with the further development of the wind energy industry itself. In the last 20 years, a considerable growth in this sector has taken place, in particular in Germany. But the outlook is somehow less growth orientated, due to a certain saturation (scarcity of space for new turbines), social opposition against the further installation of new wind turbines, and a shift from subsidy to auction systems.
• In this respect, the role of public policy, pushing or not for the development of this renewable energy, or pushing for the development of certain renewable energies only, is paramount. Indeed, the availability of funding and financing solutions to support investment in wind parks as well as technological development is crucial.

 
Obstacle 1: Need for adequate infrastructure, facilities and vessels


• As has been shown, wind turbines are growing in size. While this is an advantage for IWT in general terms, the absence of vessels and infrastructure in ports equipped for handling ever larger components could be an obstacle for a modal shift to inland waterways.
• In addition, the lack of adequate waterway infrastructure, and availability of road access from and to inland ports, is a barrier to the further development of IWT in this market.

 
Obstacle 2: Natural and social limits for further expansion of wind turbines


• The actual potential of wind turbines as a new market for IWT depends on the level of ‘geographical’ saturation of this market, especially for onshore wind energy. Indeed, once the available space for building wind parks is more or less saturated, further growth will then only depend on repowering of existing turbines. Repowering can create a high volume of investment (and transport of turbines) on its own, but this presupposes favourable and growth orientated regulations and schemes in wind energy policy.
• Another limit lies in the social or public and political acceptance of this market. As observed, growing public opposition to wind turbines is prompting governments to be more cautious about further funding of the sector. This uncertainty about future wind energy developments casts a shadow of caution over the potential of this renewable energy as a new market for IWT. At the same time, governments are more and more focused to reduce emissions and to decarbonise the energy and transport sector. It is therefore very likely that wind energy and wind turbines will continue to play a role in the future, but the actual conditions for growth will be different from one country to another.
• For offshore wind energy, different challenges exist which relate in particular to environmental and habitat protection in maritime waters. Technical challenges can also be observed (costly installation of cables and transport of electricity underwater, etc.)

 
Obstacle 3: Change in regulation of the wind energy market


• Regulatory change can have a major impact on the development of the wind energy market, as the German example shows. The shift within the German energy sector from a subsidy scheme towards an auction system has caused some wind energy companies to float into troubled waters and lead to a general slowdown in the construction of new wind turbines. Such changes affecting the wind market itself can potentially hinder the transport of wind energy components by inland waterways. This is confirmed by expert interviews. In reaction to this, the German government introduced a new regulation allowing the construction of wind turbines to continue also during any litigation process. This example proves once more the important role of government and public policy in the development of this market. Regulation can therefore be either an obstacle or an opportunity.

 
Obstacle 4: Road culture in logistics and lack of knowledge about IWT


• The interviews with logistical players active in the wind turbine market showed this phenomenon quite clearly. It is indeed very difficult to overcome this obstacle, as it often concerns a lack of information about IWT on behalf of logistical companies.

 
 

BIOMASS AND BIOFUEL TRANSPORT

Potentials
• Biomass can be used to produce biofuels, heat and electricity, and its use is on an upward trend. This versatility is undoubtedly an important factor in its attractiveness. The advantages of inland waterway transport are linked to the reliability of this mode of transport, its safety and the possibility of transporting large quantities of mass cargo. In addition, unlike wind turbines, for which ports and waterways might need to adapt their infrastructure, cargo handling in inland ports does not need special adaptations of handling equipment.
• It should also be mentioned that electricity and heat from biomass is independent from weather fluctuations, an important aspect when thinking of the fluctuations of wind and solar energy.
• While dry cargo transport in general has tended to decline in the last years in German ports, the examples of the Port of Mannheim and the Port of Straubing show that biomass has enabled inland waterway transport and inland ports to grow within segments that embrace biomass, such as agricultural products and foodstuff. Furthermore, projections of bioenergy demand from 2018 to 2030 – made in the framework of the Interreg Energy Barge project¹²³ – suggest that the market still has untapped potential. Among the three types of biomass considered by this research project, the demand for bioheat should stay at constant levels in both the BAU and worst-case scenario, while in the best case there will be a surge in demand.

 
Obstacle 1: Future regulation of biomass and biofuel of the first generation


• We have seen that despite being a well-performing sector in different ports and in different regions, there is a concrete risk of stricter regulations on the production and use of biomass and biofuels of the first generation. This is something that is already being discussed at European and at national level and it should be taken into account when looking at future potentials for biomass. It is possible that advanced biomass will have better growth prospects in the future, as a competition with food production will hereby be avoided. The industry, more precisely Cargill in Ghent, has shown efforts in constructing a new plant for advanced biomass underlining the shift towards more sustainable feedstock.

 
Obstacle 2: Early phase of deployment of advanced biofuels


• The deployment of advanced biomass and biofuels is currently still at a very early stage, and it can be expected that it will take considerable time until such a deployment is reached. New biorefineries based on advanced biomass need to be developed, and the necessary pre-project studies need to be carried out. This is a time-consuming process which can take more than ten years in total. Regarding the supply chains for these advanced biofuels, it can be supposed that inland vessels will play a role, but there can be competition from other modes of transport such as rail or pipelines.

 
Obstacle 3: Uncertainty regarding the energy transition trajectory of our societies


• Despite the comprehensible need for clarity about the future shape of energy supply, technological development is characterised by uncertainties, path dependencies and by the interplay of technology and commercial success or failure. The energy transition trajectory which our societies will follow, and in particular the type of energy that will be used in the future, remains to some degree uncertain. This technological uncertainty can lead to a specific form of inertia. Why invest in new production processes for alternative technologies, when uncertainty remains regarding their future use and demand?

 

HYDROGEN TRANSPORT

Potentials
• There is a growing interest at European level for hydrogen as a clean energy source. We have also seen how it can be transported in different forms and have observed that maritime vessels, inland vessels, pipelines and electricity as such are possible modes of transport.
• In addition, applications of hydrogen are manifold (industrial sector, transport sector, power generation) and demand has been growing since 1975.
• While it is today overwhelmingly produced from fossil fuels, hydrogen can be produced from renewables (i.e. electrolysis is carried out by using green energy). There is still a significant potential for emission reduction.
• Last but not least, it is clear that both at European and national level, public policy is pushing for the development of hydrogen, with the adoption of hydrogen strategies.
• These different factors make it a promising cargo for the future, since it is in its early stage of development.

 
Obstacle 1: Immature sector and high production costs


• The fact that hydrogen is still in an early development phase is reflected by the lack of infrastructure for electrolysis on a large scale as well as by its very high production costs.

 
 
 
 
Obstacle 2: Competition with pipelines


• A risk for IWT is that the transport infrastructure for hydrogen that needs to be built up, could be focused on pipelines rather than ships. Indeed, some technical hurdles still need to be overcome with regard to transporting hydrogen on inland vessels. Additionally, the cost factor might be the final decision maker. Lanphen (2019) assessed the costs of importing hydrogen to the Port of Rotterdam via different carriers and concluded that hydrogen via pipelines, i.e. in gaseous form, is less costly.¹²⁴

• The early 21^st century shows the downside turn of the fossil economic paradigm, in terms of climate change and natural disasters. The negative feedback of this phenomenon on human societies, including economic welfare, is more and more visible. The technical and economic transition from fossil fuels to alternative or renewable fuels is a complex process which is still ongoing. Fossil fuels are not only troublesome from an environmental point of view, but also from the viewpoint of their being finite and depleted, in combination with a growing global demand for energy.⁶⁷
• This transition implies a deep transformation for our entire economic system. This includes inland navigation, which will have to apply new technologies, transform its infrastructure, embrace social, economic and perhaps fiscal changes, and, most importantly, develop new markets. Indeed, the transition away from fossil fuels is already impacting inland navigation transport volumes.
• Within this report, the use of renewables and their growing importance in the energy sector forms a framework for the analysis of potentials within transport demand in inland navigation.
• Within the last 30 years, wind and solar energy have been the two segments that showed the strongest growth within renewable energies in the European Union (see figure 1).

 

FIGURE 1: RENEWABLE ELECTRICITY GENERATION BY MOST IMPORTANT SOURCES, EUROPEAN UNION – 1990-2020 (1,000 GWH)


Source: International Energy Agency, Data and Statistics (https://www.iea.org/fuels-and-technologies/renewables)
 
• Projections regarding the development of renewable energies in the near future are positive especially due to the European Commission’s efforts in meeting the objectives of the European Green Deal. With an extension of the carbon price signal to road transport and the building sector, as well as to the maritime sector, further emissions are targeted.⁶⁸
• Electricity generation from renewables is expected to expand by almost 50% in 2025 compared to 2019. By 2025, the share of renewables in total electricity generation is expected to be 33%, surpassing the coal-fired generation. Renewables are expected to meet 99% of the global electricity demand increase during 2020-25. In the European Union and the United Kingdom, the increase in renewables-based generation is expected to be more than nine times the rise in electricity demand between 2019 and 2025. Recent policy momentum is also perceived as a lever to give an extra boost to the use of renewable energy. For instance, the EU economic recovery plan foresees climate-related spending in areas such as buildings, grids, electric vehicles and low-carbon hydrogen.⁶⁹
• The aim of this chapter is to show in which fields inland navigation could benefit from these trends towards renewables, and to show also existing bottlenecks and barriers for growth in IWT in this respect.
• Considering the growing importance of the energy transition and its long-term impact on inland navigation, transport of renewable energies – and related components for the generation of alternative energies – can be considered as a market that offers certain growth potentials for IWT.
• This is due particularly to the large loading capacities of inland vessels, a property which is complementary to the large size and/or the large batch size of many alternative energies. Alternative energies can appear in different forms – wind, solar or hydraulic energy, solid biomass, liquid biomass (biofuel, ethanol), methanol or hydrogen.
• However, there are still high uncertainties regarding energy transition pathways which our society and the different industries will follow. Such uncertainty relates in particular to prices, the availability of renewable energies, and technological development, especially zero-emission technologies.
• In the context of this report, it was therefore decided to focus on three case studies, namely, transport of:
  – wind turbines,
  – biomass and biofuel,
  – hydrogen.

TRANSPORT OF WIND TURBINES ON INLAND VESSELS

WIND ENERGY AND WIND TURBINES – OVERVIEW AND DEVELOPMENT

• The growth of energy generation with wind turbines has been particularly successful in countries that offered a state-guaranteed feed-in tariff for wind power, over a period of 20 years. Due to this scheme, overall additions of capacity in the wind energy sector accelerated to meet 2030 targets. In more recent times, however, permitting challenges and grid constraints started to limit growth. It was also observed that changes in policy design (from state guaranteed feed-in tariffs towards auction systems) had negative effects on capacity growth. In France, Germany and Italy, such changes in policy design led to a sharp decline in newly built capacity.⁷⁰ This mostly occurs when support schemes with rather fixed feed-in tariffs are turned into auction mechanisms that automatically remove the weakest players from the market. Hereby, ’weakness’ is to be understood as a rather high level of production costs, meaning that such a company will not be successful within an auction procedure. This limits overall growth for wind energy capacities.
• In Germany, the shift in policy design took place in 2017, when state guaranteed feed-in tariffs for wind energy were abandoned in favour of auction systems. In the system that was in operation until 2017, the compensation per KWh of wind power was guaranteed by the state, and determined on the basis of scientific studies on the average costs per KWh of wind power using state-of-the-art technology. The per kWh tariff for existing wind turbines was reduced marginally year by year by a small percentage of 1.5% in order to take into account technological progress and to give incentives for productivity growth.⁷¹

 

FIGURE 2: WIND TURBINE AND ITS COMPONENTS


 
 

• Grid operators were obliged to purchase wind power at the prices set by the State. The difference between this State price and the market price for electricity was paid by the end consumer in the form of a submission to the grid operator.
• Following this subsidy scheme, the wind industry experienced considerable growth for 20 years, as shown in Table 1. Installed capacity for producing electricity from wind (both onshore and offshore) more than doubled in Rhine countries between 2010 and 2019. Between 2000 and 2010, growth had been even stronger. This last point reflects the increasing scarcity of areas for the further installation of new wind turbines. Repowering (the exchange of existing wind turbines by new, more productive ones) is one means to overcome this bottleneck.

Source: http://www.windwaerts.de/de/infothek/know-how/funktion-windenergieanlage, CCNR adaptation
 
 
 

TABLE 1: INSTALLED NET CAPACITY* (MEGAWATT) FOR PRODUCING ELECTRICITY FROM WIND ENERGY – RHINE COUNTRIES

	Installed MegaWatt in year…			Growth factor
Country/Year	2000	2010	2019	2019 vs 2010	2010 vs 2000
Germany	6,095	26,903	60,721	2.3	4.4
France	38	5,912	16,427	2.8	155.6
Netherlands	447	2,237	4,484	2.0	5.0
Belgium	14	912	3,863	4.2	65.1
Luxembourg	14	44	136	3.1	3.1
Total	6,608	36,008	85,631	2.4	5.4


Source: Eurostat [NRG_INF_EPCRW]
* Both onshore and offshore capacities
 
• Further to the already installed 60.7 GigaWatt, the German government aims to implement another 71 GigaWatt onshore and 20 GigaWatt offshore wind energy capacity by 2030, according to the new EEG policy.⁷²⁷³
• For the same period, a similar growth (although on a lower absolute basis) is observed for Danube countries, and especially Austria. From 2000 to 2010, wind power capacity in Austria increased twentyfold, and threefold from 2010 to 2019. Croatia and Romania experienced a relevant increase in their net capacity for wind energy in the period 2010-2019 (see table 2).

 

TABLE 2: INSTALLED NET CAPACITY* (MEGAWATT) FOR PRODUCING ELECTRICITY FROM WIND ENERGY – DANUBE COUNTRIES

	Installed MegaWatt in year…			Growth factor
Country/Year	2000	2010	2019	2019 vs 2010	2010 vs 2000
Austria	50	1,015	3,224	3.2	20.3
Romania	0.0	389	3,037	7.8	n.d.
Bulgaria	0.0	488	703	1.4	n.d.
Croatia	0.0	79	646	8.1	n.d.
Hungary	0.0	293	323	1.1	n.d.
Slovakia	0.0	3	4	1.3	20.3
Total	50	2,267	7,937	3.5	45.3


Source : Eurostat [NRG_INF_EPCRW]
* Both onshore and offshore capacities
N.d. = not defined due to value of zero in 2000
 
• According to the DNV Energy Transition Outlook 2021 report, by 2050, wind is expected to account for 33% of the world’s electricity output, compared to 5% in 2019.⁷⁴ In Rhine countries, the share of electricity produced from wind energy lies above the world’s average. By 2019, it reached 20% in Germany, 15% in Luxembourg, 10% in Belgium and in the Netherlands, and 6% in France (see figure 3).

 

FIGURE 3: SHARE OF WIND ENERGY IN TOTAL ELECTRICITY PRODUCTION (GWH) IN RHINE COUNTRIES (%)


Source : Eurostat [nrg_bal_peh]
 
• In looking at the Danube countries of Austria, Croatia and Romania, similar growth trends can be observed. The three mentioned countries exceeded a 10% share in electricity production from wind energy in 2019 (see figure 4).

 

FIGURE 4: SHARE OF WIND ENERGY IN TOTAL ELECTRICITY PRODUCTION (GWH) IN DANUBE COUNTRIES (%)


Source: Eurostat [nrg_bal_peh]
 
• In 2020, a total volume of 3,860 MW new onshore wind energy capacity was put out to tender by the state in Germany. However, around 32% of the tendered volume was not awarded. In the previous year, only half of the tendered volume was awarded. According to the German Ministry of Economic Affairs, only those companies with the lowest electricity generation costs would be successful in the tendering process.⁷⁶
• As a result, the investment in new capacities decreased sharply in Germany in the years 2018-2020, as table 3 shows.⁷⁷ Another of the slowing-down factors are long approval procedures, which result primarily from lawsuits filed by parts of the population against companies that want to install new wind turbines. This opposition against wind turbines among parts of society could be a major hindrance for further growth in this sector in the future in Germany. Also, in some cases, the decommissioning of the ageing fleet of wind turbines is not accompanied by repowering (installation of new turbines at the same place), which altogether reduces capacities.
• In order to unblock the situation, the German government recently introduced an ‘Investment Acceleration Act’. It was set in place in order to allow the construction of wind turbines to continue also during any litigation process.⁷⁸ Furthermore, in order to speed up and achieve the targets set, in 2021, a revised version of the EEG was published to generate incentives for local communities to eliminate any restrictions on newly built wind turbines in northern Germany.⁷⁹
• France is a recent market in wind energy, where there is room for accelerated increase of wind capacity. Both onshore and offshore capacity is expected to increase in France. The French Ministry of Ecological Transition’s Multiannual Energy Programme (MEP) also foresees an ongoing commitment to the development of this sector. The monitoring indicators of the MEP were updated in 2021. For wind energy, the objective is to increase onshore wind capacity by 38-44% between 2020 and 2028. For offshore wind, the objective is to almost triple the capacities by 2028.⁸⁰
• Growth is forecast both for onshore wind, led by France, Germany and Spain, as well as offshore wind, led by the UK, the Netherlands, France and Germany.⁸¹ Nevertheless, environmental and ‘NIMBY’ (‘Not In My Backyard’) concerns seem to grow in several parts of Europe (including France) and could hinder wind power development.
• It is important to state that the transport of wind turbines or their components addresses two different markets. One is the repowering of existing wind turbines and the second the construction of new wind turbines at new locations. Both cases represent a possible market for inland navigation. It is worth noting that in the case of repowering, replaced wind turbines can be dismantled and recycled as well as moved to another geographic area. In both cases, transportation of wind turbine components takes place. Depending upon regulations in the wind energy market, each of the three cases will develop its own pace and trend, and IWW transport will be affected accordingly.

 

TABLE 3: YEARLY ADDITIONS OF NEW WIND ENERGY CAPACITY (IN MEGAWATT) IN GERMANY, REDUCTION THROUGH DISMANTLING OF EXISTING PLANTS, AND CUMULATED STOCKS (ONSHORE, OFFSHORE AND ALL WIND TURBINES)

Onshore, in MW per year	2012	2013	2014	2015	2016	2017	2018	2019	2020
Gross additions	2,415	2,998	4,75	3,731	4,625	5,333	2,402	1,078	1,431
Thereof repowering	432	766	1,148	484	679	952	363	155	339
Dismantling	178	258	364	195	366	467	249	97	222
Net additions #	2,237	2,74	4,386	3,536	4,259	4,866	2,154	981	1,208
Cumulated stock *	31,028	33,73	38,116	41,651	45,911	50,777	52,931	53,912	54,938


# = Gross additions minus dismantling
* Cumulated stock at 31 December of each year
 


Offshore, in MW per year	2012	2013	2014	2015	2016	2017	2018	2019	2020
Net additions	80	240	529	2,282	818	1,25	969	1,11	219
Cumulated stock *	280	520	1,049	3,295	4,108	5,387	6,382	7,516	7,77


* Cumulated stock at 31 December of each year
 


Onshore and offshore, in MW per year	2012	2013	2014	2015	2016	2017	2018	2019	2020
Net additions	2,317	2,98	4,915	5,818	5,077	6,116	3,123	2,091	1,427
Cumulated stock *	31,308	34,25	39,165	44,946	50,019	56,164	59,313	61,428	62,708


* Cumulated stock at 31 December of each year
Source: Bundesverband Windenergie / Deutsche Windguard / VDMA Power Systems – Factsheets Windenergieausbau an Land; Windenergieausbau auf See; https://www.wind-energie.de/themen/zahlen-und-fakten/deutschland/ (last consulted on 27.8.2021)
 
• In Austria, a similar decreasing trend in investment in new wind energy capacities has been observed since 2014, with some fluctuations, as shown in the following table. However, while the year 2020 saw a net reduction in terms of wind energy capacity, forecasts for 2021 are optimistic. Overall, the deployment of both wind and solar PV has accelerated, driven by feed-in tariffs and falling deployment costs.⁸²

 

TABLE 4: YEARLY ADDITIONS OF NEW WIND ENERGY CAPACITY AND REDUCTION THROUGH DISMANTLING OF EXISTING PLANTS IN AUSTRIA (IN MEGAWATT)*

MW per year	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
New capacity	279	316	409	325	228	196	232	157	25	315
Cumulated capacity	1,38	1,695	2,102	2,426	2,654	2,849	2,039	3,159	3,12	3,396
Capacity reduction from dismantling	2	2	2	1	0	1	41	37	64	40
Net additions#	277	314	407	324	228	195	191	120	-39	275


Source: IG Windkraft 2021
* For 2021, forecast
# New capacity minus dismantling
 
• In light of the above, it is clear that whether transport of wind turbines will develop or not strongly depends on the decision by public authorities to, for instance, build new wind turbine parks and their acceptance by citizens. Another aspect is the availability of space for building such parks. Indeed, once such space is saturated, it is no longer possible to build new wind turbines.

 
 

THE WIND ENERGY INDUSTRY – LOGISTICAL ASPECTS AND THE POSITION OF INLAND WATERWAY TRANSPORT

• Due to the competition with other energy sources (renewable and non-renewable ones) and the public subsidies dedicated to energy transition, the economic and political pressure to reduce the production costs of renewable energies and to increase their energetic productivity over time is high.
• Hence, over the years, wind turbines have grown in size and height. Regarding size, the length of rotor blades is an important factor. Turbines with longer blades have enabled more electricity to be produced with one unit, because the efficiency of the propeller increases with longer rotor blades. The wind area that is covered corresponds with longer blades.
• Secondly, the height of the tower also increases productivity, as wind speed increases in higher areas. Between wind speed and energy generation, an exponential relation exists: if wind speed is doubled (growth by factor 2), energy production increases by factor 8, due to physical laws.⁸³
• From a logistical point of view, an increase in size for wind turbines makes inland vessels an appropriate mode of transport, at least in principle.
• A publication of the Bundesverband Windenergie, the German Federation of Wind Energy⁸⁴ confirms this, by stating that “railway transport of wind turbines plays only a minor role, due to restrictions of the maximum rotor length that can be transported by rail, to 56 metres. Hence, transporting rotor blades by rail is not possible anymore, due to the increase in their size.”⁸⁵
• Railways are only capable of transporting parts of the tower of a wind turbine, or components of the engine house when these are divisible. Despite its suitability for the transport of wind turbines, inland navigation accounts only for a rather small share of all logistical activities of the wind industry. The German Federation of Wind Energy writes that it “should be objectively examined whether and when inland navigation can be more strongly integrated into transport of wind energy turbines.”⁸⁶
• With regard to road transport, authorisations by administrative authorities are generally required to transport wind turbines. In Germany for instance, each road transport of a wind turbine must be approved by the administration, and for the approval, the use of road transport must be justified with unreasonable additional costs, if the wind turbine is to be transported via inland waterways or railways. The fact that road transport is mostly approved, shows that there is still a strong tendency against the use of inland waterways, for which there are several reasons, including a certain ‘road culture’ in logistics and in the mindset of stakeholders. A further reason for citing why road might be the preferred option are the low heights of bridges limiting transport of windmills on inland vessels, in certain cases. However, should the administrative requirements to obtain an authorisation to transport wind turbines by road become stricter, additional opportunities for inland waterway transport would arise.



• While wind turbine components have long been produced in Europe, many are now produced in Asia. They are transported to Europe via seagoing vessels, IWT therefore appearing as the logical follow-up to transport them to the hinterland.⁸⁷
• The Bundesverband Windenergie identifies the following points which should be fulfilled in order to achieve a higher modal split share of IWT within the logistics of wind energy components:
  – availability of a sufficiently high number of large inland vessels for the transport of wind turbines;
  – quality requirements for waterways, locks and ports regarding size and technical conditions;
  – possibility for loading and unloading of wind turbines and their components in ports;
  – possibility for intermediate storage;
  – minimisation of weather-related transport interruptions (high or low water);
  – development of models and solutions together with the transport companies.
• Such findings were also confirmed during interviews carried out with relevant actors.

 
 

INLAND WATERWAY TRANSPORT OF WIND TURBINES: INTERVIEWS WITH EXPERTS

Viewpoint of a multimodal logistics company
 
• Interview with Rhenus Logistics




Source: Photo © Klaus Rockenbauer
 
Rhenus Donauhafen Krems is a company based in Austria and part of the Rhenus-Group, which develops tailor-made solutions for logistical needs worldwide.
In Austria, 74 newly built windmills are foreseen in 2021 compared to seven in 2020.⁸⁹ The total number of existing windmills amounted to 1,307 in the year 2020 producing seven billion kWh on an annual basis. This accounts for the electricity of two million households and saves three million tonnes of CO₂.⁹⁰
 
The wind turbines address different specific markets. One is the repowering of wind turbines and the second the construction of new wind turbines. The first market embraces dismantled wind turbines due to the installment of new, more powerful ones, with a higher energetic productivity. Dismantled wind turbines are then exported to other countries, via the Port of Constanţa, in particular, to North Africa or to Central Asian countries such as Kazakhstan. The geographical focus for the first market lies in traditional wind energy countries (France, Germany, the Netherlands, Romania, Slovenia).
 
Given the size of wind turbines, inland vessels are considered to be a convenient transport mode. In addition, since trucks need an administrative permission to transport wind turbines, road transport bears the risk of a denied authorisation or potential higher administrative costs. Similarly, the lack of planning and information regarding possible works on highways, is a favourable factor for inland waterway transport. Given the size of wind turbines, there is no competition from rail transport which does not have the capacity to transport such cargo. Location of the port is another important aspect. Transport via inland vessels is for instance facilitated when the port is located next to the production site of wind turbines. This is for instance the case of the wind turbine manufacturer Enercon, which fixed its production site next to the Port of Krems, equipped with a special wind turbine handling system. This proximity allows the limiting of transshipment costs, given that no other mode of transport is required to transport the components between the port and the production sites.
 
Other factors influencing the potential of wind turbine transport by inland vessel are notably the availability of specialised wind turbines handling facilities in ports as well as intermediate storage facilities. This is true for both the repowering and the newbuilding market.
 
Regulatory aspects also play an important role. In particular, one bottleneck is the lengthy administrative process required for the building of new wind turbine parks. Another obstacle is rather a ‘cultural’ one. Indeed, the mindset of shippers prefers road transport, and this is often detrimental towards IWT. This is generally due to a lack of knowledge about inland waterway transport. In addition, while this issue is not specific to the transport of wind turbines, IWT is also often perceived as a mode which is vulnerable to high and low water periods.
 
The evolving size of wind turbines’ components is a double-edged sword. It could be a further opportunity for IWT but also a bottleneck in case inland vessels are unable to adapt for instance, to the constantly growing size of wind blades (from 45 to 65 metres while the next generation could reach 80 metres) which is previously mentioned.
 
Last but not least, the high value of the wind blades (amounting up to USD 170,000) requires a great deal of caution during transport, which can be offered by inland waterway transport.⁹¹ According to Mr. Gerhard Gussmag, similar considerations are also true for the transport of hydropower plant components.
 

Source: Photo © Rhenus
 
 
Viewpoint of two logistics companies
 
• Interview with Bolk specialised in project cargo

Bolk is a transport company based in the Netherlands with branches in several European countries (Germany, Austria, Romania and France). The company also manages exceptional project logistics, including inland shipping where required. In the context of wind turbine transport, several factors influence the choice of mode of transport. One of the main decisive economic criteria considered by the clients is that of costs. The mode of transport that provides the service at the lowest costs is usually chosen. However, aspects such as proximity to production sites for wind turbines favour the inland waterway transport due to well-equipped inland ports.
 
Nevertheless, when choosing IWT, additional costs such as transshipment charges need to be considered. These costs arise if the construction sites or final destinations are not located near the port and therefore require a further mode of transport. Given the construction site not being directly located at the port, a truck would need to first bring the components to the vessel. This includes handling costs that might, when comparing the whole logistics chain of different transport modes, favour road transport. In addition, the risk of low water and the associated service irregularities discourage the adoption of IWT as the first choice.
 
Road transport appears to be the more flexible and faster choice compared to IWT. Flexibility means that the company that is producing the wind turbine does not have to complete all the components at once, as trucks can pick up one component each week. However, this higher flexibility comes with higher transport costs compared to IWT. Indeed, the high loading capacities of IWT allows carrying all the components within one single journey. A factor in favour of road transport that is often relevant for logistical choices is the shorter transport time of trucks, compared to river vessels.
 
Because of its high loading capacities, when transporting heavy cargo, IWT is also the preferred (or even the only) choice from an environmental point of view, unless – when departing from the same point – the number of kilometres to be covered by waterway is significantly higher than the number of kilometres to be covered by road to reach the same destination. The growth in size of wind turbines is – in principle – another argument for a waterborne transport of these components. The interview partner, Mr Gerhard Wagner, confirms this trend, but adds that ports and shipowners sometimes lack the equipment to handle this growing size. On the other hand, this trend will complicate road transport probably far more (need for ultralong trucks, new axles) thereby increasing journey times, which could be comparable to those of inland vessels.
 
According to his assessment, there is a difficulty to innovate in inland waterway transport, in contrast with road transport which strives to remain competitive and adaptive. Stricter regulations may lead to the choice of inland waterways. In some countries, it is difficult to obtain permits for road transport, and this can produce sufficient pressure to favour inland waterway transport. However, there is resistance to this modal shift within the transport sector. This resistance seems to come from several sides which were mentioned by the interview partner:
1) Additional costs due to transshipment if the place of loading is far from an inland port
2) Less flexibility of IWT compared to road transport, due to large batch sizes in IWT
3) Embedded ‘road culture’ among logistical companies and lack of knowledge about IWT
 
According to the interview partner, road transport dominates the market of wind turbine transport.
 

• Interview with Gutmann France, a logistics company specialised in heavy cargo logistics

Gutmann Sarl is a medium sized family enterprise created in 1963 in Karlsruhe. It is specialised in national and international transport of heavy cargo (100 – 200 tonnes). Around 50% of its transport activity in Germany and France is dedicated to transport of wind turbines.
 
Within the wind turbines transport activity of this company, 90% of transport is related to newly built turbines and 10% to repowering activities. Regarding the modal share of IWT in the total wind turbines transport market, the director of Gutmann France Sarl, Mr Paul Schmitt, emphasised that only 10% of the total transport of wind turbines are transported by inland vessels and the remaining 90% by trucks via road transport.
 
This results from several factors:
– The cost factor: it is often lower for road transport as it does not involve transshipment costs and storage costs. The cost of transport is always assessed on a case-by-case basis, and such costs can play in favour of inland vessels when space on board is optimised, but it cannot always be the case.
– Bridges on inland waterways can have a strong impact on the transport capacities of inland vessels.
– Flexibility and adaptability: road transport is considered more flexible compared to inland waterway transport.
– Availability of road infrastructure to exit the port: when transported by inland vessel to a port close to the windmill park, the last mile needs to be done by road transport. As blades are becoming longer and longer by up to 85 metres, ports lack the necessary infrastructure for heavy duty vehicles to be capable of driving out of the port area. The availability of road infrastructure from and to the port is an important obstacle. Such infrastructure should be developed to increase the modal share of IWT in this segment.
– Technical aspects: it is not always technically possible to accommodate for the transport of wind turbine on an inland vessel. However, this is also true for road transport.
 
There are also several opportunities for transport of wind turbines on inland vessels:
– Economies of scale exist when the space on board is optimised. Such optimisation exists in particular when wind turbines are transshipped from a maritime vessel to an inland vessel. Indeed, all the components necessary to build entire wind turbines can generally be carried by maritime vessels and then transshipped on board of inland vessels, thereby avoiding storage costs and creating economies of scale.
– The fact that windmills are produced less and less in Europe and more often imported from countries such as Brazil, China, Vietnam or Poland, is an opportunity for inland waterway transport since the initial leg of the transport chain takes place on a maritime vessel.
 
According to the interviewer, there is untapped potential for transport of wind turbines by inland vessels. At the level of Gutmann, he sees the modal share of wind turbine transport on waterways possibly increasing to 20%compared to the 10%at present. He also sees potential for IWT in the development of new logistics concepts.
 
Nevertheless, according to Paul Schmitt, the market for transport of wind turbines is also very evolutive. Despite the observed decrease in investments in the last three years in particular, this market is expected to follow a positive evolution in the coming years, both in France and Germany, particularly driven by the ambitious public policy objectives with regard to the development of renewable energies and their role in the energy mix. In Germany, the 2021 Renewable Energy Act notably plans to increase solar, biomass, onshore and offshore wind capacity, to reach higher expansion goals and to raise public acceptance of their expansion. In France, the development of wind energy is more recent than in Germany and important capacities are still available, leaving further room for the development of wind energy. According to Paul Schmitt, France lags 15 years behind compared to Germany. However, there is hope for a brighter increase in this sector.
 
Viewpoint of an inland vessel owner-operator
 

• Interview with owner of MS CATHARINA




Source: Photo © MS CATHARINA
 
The transport of wind turbine components represents a considerable part of the company activity. In order to be acknowledged by shippers in this market segment, respect for deadlines and punctuality is very important. Mr. Hohenbild confirms that trucks are the main competitors for inland vessels for the transportation of wind turbines, while railways play a minor role. The average length of the rotor blades is around 65 metres, and the weight 20 tonnes, so that by transporting two rotor blades, the total loaded weight is only 40 tonnes. The length and loading capacity of inland vessels are largely sufficient for transporting rotor blades.
 
When transporting engine houses, several units (each weighing 90-100 tonnes) are often transported in one batch (up to five engine houses), resulting in a total loaded weight of 500 tonnes. Given these limited loaded weights, low waters are not problematic for the transport of wind energy components. It can therefore be a profitable market segment for rivers such as the Elbe or Danube, where low waters are relatively frequent. The limited height of bridges, on the other hand, can represent obstacles in some cases, although alternative routes are mostly feasible.
 
Mr. Hohenbild identifies the decrease in newbuilding activity of wind turbines in Germany as the main barrier for growth in the near future, mentioning as a main cause the paradigm shift from guaranteed State prices for wind electricity towards tender and auction procedures. This has resulted in a strong reduction of newbuilding activity (which is confirmed by figures, see table 3) and even in a transfer of production capacities from Germany to other European countries such as Portugal or Turkey. According to his market experience and observations, several companies within the wind industry have gone bankrupt in the last three years or have shifted their production sites to other countries.
 
The growing opposition against the installation of wind turbines amongst parts of the German population is also a major drawback regarding the further growth in this sector. Each newbuilding project is endangered by long approval procedures.

TRANSPORT OF BIOMASS AND BIOFUELS ON INLAND VESSELS

STRUCTURE AND DEVELOPMENT

• Biomass used as feedstock in the energy sector can be split into biomass with high ILUC⁹³ risk (food and feed crops) and biomass used for advanced biofuel or electricity production with low ILUC risk . The high ILUC risk⁹⁴ biomass includes mainly oil plants such as rapeseed or soybean, which need to be planted in the same way as any other agricultural product. Within this report, high ILUC risk biomass/ biofuel will also be called first generation biomass and biofuel (1G), while low ILUC risk biomass and biofuel will be called advanced biomass/biofuel.
• From biomass, all forms of energy can be generated – electricity, heat, fuel for transport (biodiesel, bioethanol, etc.). Rapeseed currently accounts for 80% of the raw materials from which biodiesel is produced.⁹⁵ Biodiesel is blended with conventional fossil diesel, according to national blending regulations. Trucks can also use pure biodiesel. For the production of bioethanol, wheat, rye, corn and sugar beet are the primary raw materials. Bioethanol substitutes fossil gasoline and is also blended with conventional gasoline. For these blends, technical upper limits exist (‘blend wall’), due to technical vehicle standards.
• In terms of the mass, rapeseed shred used as animal fodder accounts for 60% of the total output of a biomass-biofuel transition, while biodiesel and glycerin account for 40%.⁹⁶ Glycerin is a by-product of biodiesel, which is used for producing detergents, tooth paste and products for the pharmaceutical industry.
• As the study of the International Renewable Energy Agency (IRENA) from November 2019 points out, “practical experience in transporting and storing ethanol and biodiesel is already abundant, as these commodities are traded globally, and in the main markets (Europe, the US, Latin America) storage and handling facilities are located near major ports.”⁹⁷ This statement is confirmed by two case studies presented in this chapter of the present report, regarding biomass and biofuel logistics in the ports of Mannheim and Straubing.
• According to the IRENA study, the production costs for 1G biofuels are largely determined by the costs of feedstock (e.g. rapeseed), which represent 70-90% of total production costs.⁹⁸ This high share makes 1G biofuel production vulnerable towards an increase in feedstock prices.
• Advanced biofuels avoid any competition with food production: they are produced from lignocellulosic feedstocks such as corn stover, straw, agricultural residues, woody residues from forestry and wood processing industries (e.g. sawdust), oilseeds produced on marginal land that is unsuited for crop production, municipal solid waste and a variety of other industrial and commercial waste types.
• Apart from the sustainability concerns about 1G biofuels, another advantage of advanced biofuels is that they rely on far less expensive feedstocks such as agricultural residues, and different types of waste. Waste products are low-value products by nature. However, the quality of advanced feedstocks may be more variable than for 1G feedstocks, due to their waste-type nature.⁹⁹ As it is the case for 1G biofuel production, advanced biofuel production also generates coproducts with a commercial value – for example cellulose, which is used as feedstock in the paper industry.
• Up until now, the commercial development of 1G and advanced biomass follows very different pathways. The production of biodiesel, based on 1G biomass, has followed a positive trend in the EU-27 during the last 15 years. The three countries with the highest production level in Europe are Germany, France and the Netherlands, which together had a share of 52% of all biodiesel production of the EU-27 in 2020 (see figure 5).

 

FIGURE 5: INDIGENOUS PRODUCTION OF LIQUID BIOFUELS IN THE EU-27 (MILLION TONNES)


Source: Eurostat [NRG_CB_RW]
 
• According to the International Energy Agency (IEA), a decrease of biodiesel production of 13.6% is estimated for 2020, due to the reduction of fuel demand during the Covid-19 pandemic. The rebound in diesel demand in 2021 should lead the volumes back to the 2019 level. For the time span 2023-2025, the IEA projects a production level for biodiesel and hydrotreated vegetable oil (HVO¹⁰⁰) in the European Union that is 5% higher than the level in 2019, and 21% higher than the level in the Covid-19 crisis year 2020.
• The European Union represents the region with the highest production level of biodiesel on a worldwide scale, in front of the US, Indonesia, Brazil and Argentina.¹⁰¹ Data from IEA are in line with Eurostat data, by stating that France, Germany, the Netherlands and Spain are the most important biodiesel producing countries, accounting for two-thirds of EU production.
• The growth process for biodiesel should not hide the fact that there have been several regulatory changes since 2005. In Germany, for example, biodiesel was exempted from taxation until 2006, in contrast to conventional fuels. This exemption was gradually removed until 2012, but at the same time, the obligation to blend a minimum proportion of biofuel with conventional petrol and diesel fuels was introduced. This policy change caused a shift from rural entrepreneur-based biodiesel production to a biodiesel market dominated by large oil distribution and agribusiness companies.¹⁰²
• Soon afterwards, the EU Energy & Climate Package (ECP) of 2009 established a framework for EU member countries to set national renewable energy targets, leading to the enactment of the Renewable Energy Directive (RED, 2009/29/EC). The focus then turned to sustainability concerns and to the question, ‘which renewable fuels are really sustainable?’ Food versus fuel concerns became the main reason why 1G biofuels were considered only as a second-best solution and brought advanced biofuels onto the agenda.¹⁰³
• It is therefore important to note that the potential of biomass/biofuel transport on inland vessels is heavily dependent upon the public policy decisions at national and European level, which either encourage or limit their development. For instance, the European Renewable Energy Directive II fixes the target according to which renewable energies should reach a share of 32% within total energy consumption by 2030. A sub-target exists for the transport sector, requiring fuel suppliers to supply a minimum of 14% of the energy consumed in road and rail transport by 2030 as renewable energy. To achieve this goal, the Directive defines a series of sustainability and GHG emission criteria that bioliquids used in transport must comply with to be counted towards the overall 14% target.
• For 1G biofuels, a cap was introduced, limiting their share to 7% of the final consumption of energy in the road and rail transport sectors in each member state, and allowing therefore only for a slight increase in their production levels. The share of first-generation biofuels cannot exceed 7% by 2030 while the share of advanced biofuels shall be at least 3.5% in 2030. In the proposal to revise this directive, which was presented in July 2021 by the European Commission within the ‘Fit for 55 Package’, the use of such 1G biofuels is being discouraged. While this proposal still has to undergo the EU legislative process, non-negligeable impacts on the biofuel sector are expected. This will consequently affect the potential for 1G biomass/biofuel production and transport by inland vessels. This is only one example of how public policy affects the development of biofuels, but other examples of this kind exist.
• Given the fact that further growth of 1G biofuel is discouraged, it could be the aim to develop advanced biofuels as soon as possible, and to unchain the growth process for these fuels. However, any kind of rapid growth of advanced biofuels and related production capacities have not materialised so far.
• Cellulosic ethanol production has developed very slowly and was accompanied by many failures, both technically and commercially, in the US as well as in Europe. By 2018, on a worldwide scale, only 12 refineries produced cellulosic ethanol at commercial level, and with very modest production volumes. Five of them were found in Europe, two in Brazil, three in China, and two in the US. Most of them can be categorised as demonstration projects.
• The main reasons for this situation can be summarised as follows:¹⁰⁴
  – Regulatory and political uncertainties and related high risks: Biofuel markets are heavily influenced by politics, regulations, interest groups, and public opinions. Long-term investments, however, require rather stable framework conditions. It should be noted that a biorefinery takes five to ten years to develop. In addition to that, pre-project stages also have to be taken into account (business planning, feasibility analysis, engineering design, permissions regarding the contracting of feedstock, setting up supply chains, financing). Regulatory uncertainty can be very problematic for long-term projects and their financing, in particular for small start-up firms.
  – High competition with conventional petro-fuels: With the technologies for advanced biofuels being immature, high learning costs and therefore high production costs must be taken into account by start-up firms. This does not make it easy to reach break-even points, and to outperform conventional petro-fuels, in particular in times when the oil price followed a downward trend, as was the case between 2011 and 2020.
  – Lack of technological readiness/too high costs: In many cases, technical problems during the early production process of advanced biofuels can occur, in the start-up phase. Solutions can mostly be found, but they are so expensive that the production costs are becoming too high, resulting in a price level for the end product that the relevant market is not able to tolerate.
• A prudent approach to be considered is that in the long run, advanced biofuels will be one element within the decarbonisation process of the transport sector, in parallel with electrification, but as an element which is more appropriate for heavy freight vehicles, ships and aviation which require high amounts of energy.
• At the same time, regarding 1G fuels, their reliance upon food or feed crops represents a serious barrier for their further growth in the future.
• Given the lack of large-scale deployment of advanced biofuels, relevant real-world examples for biomass logistics are mostly found among 1G biofuel cases. The case studies presented in this report show ports where IWT is integrated in biomass production and logistical chains. In two of three cases, the solid biomass or natural feedstock is rapeseed, which is transformed into rapeseed oil and rapeseed shred. In a further step, biodiesel is produced from rapeseed oil. In the third case, the feedstock used is wood waste, so that this third example could be considered as one that avoids any food-fuel competition (advanced biomass).

 
 

BIOMASS AND BIOFUEL WATERSIDE HANDLING IN THE RHINE REGION (PORT OF MANNHEIM)¹⁰⁵

• The Port of Mannheim is the third largest Rhine port in Germany. In the port area, an oil mill (Ölmühle Bunge) receives rapeseed mainly by ship from different regions in western Europe, stores it, and produces rapeseed oil and shredded rapeseed, the by-product used in the foodstuff segment. Most of the rapeseed oil is transported to the port’s company Mannheim BioFuel GmbH by pipeline to manufacture biodiesel which is then delivered by ship and trucks to customers (mineral oil companies, petrol stations, haulage companies). The nominal capacity of the production site of Mannheim is 120,000 tonnes of biofuel per year.¹⁰⁶



Source: Port of Mannheim

 

• According to the Port of Mannheim, inland navigation offers several advantages within the biomass and biofuel logistics:¹⁰⁷
  – large capacities;
  – high efficiency and reliability, no restrictions at the weekend;
  – few accidents.
• Data have been available since the year 2005 (biomass) and 2007 (biodiesel) respectively. For all forms of biomass, higher values were recorded in 2020 compared to 2005/2007 and also when comparing the data with 2010. However, rapeseed and rapeseed shred showed high fluctuations, although this was partly caused by an accident in 2010 (fire in the oil press) (see table 5).
• For rapeseed oil, a more constant growth trend can be seen from the long-term time series. The biodiesel volumes developed again differently. Although they were much higher in 2020 than in the first year of data recording for biodiesel (2007), the trend has been less positive in the last years, and the value in 2020 was indeed lower than in 2010.

 

TABLE 5: WATERBORNE HANDLING OF BIOMASS AND BIODIESEL IN THE PORT OF MANNHEIM (IN 1,000 TONNES)

		Volumes			Growth factor
Product	2005	2010	2015	2020	2020/2010	2020/2005
Rapeseed	767	365	769	847	2.3	1.1
Rapeseed shred	269	190	360	458	2.4	1.7
Rapeseed oil	119	120	181	264	2.1	2.2
Total	1,156	675	1,31	1,568	2.3	1.4




		Volumes			Growth factor
Product	2007	2010	2015	2020	2020/2010	2020/2007
Biodiesel	7	111	123	77	0.7	10.9


Source: Port of Mannheim
 
• Figure 6 shows the data since 2013. The fire in the oil press in 2010 accounts for the strong drop in 2011. The share of rapeseed shred within the sum of rapeseed oil and rapeseed shred was 65% on average in the period from 2005 until 2020. This confirms approximately the share that is given in the literature about rapeseed and rapeseed oil manufacturing. The trend for rapeseed oil is upward orientated, while biodiesel follows a constant trend.

 

FIGURE 6: WATERBORNE HANDLING OF BIOMASS AND BIODIESEL IN THE PORT OF MANNHEIM (IN 1,000 TONNES)


 


Source: Port of Mannheim

 

• The following table shows key figures for the Port of Mannheim, including a comparison with the regional , national and EU level with respect to inland waterway transport. The agri-food segment, of which rapeseed is a major part in Mannheim, has developed better than the average inland waterway transport between 2010 and 2020.
• Waterside transport of rapeseed, rapeseed shred and rapeseed oil amounted to 1.57 million tonnes in Mannheim in 2020. These materials are counted as food products (NST 2007 group 04) and have a share of 78.4% in total waterside handling of agribulk and food products (NST 2007 groups 01 and 04 taken together) in the Port of Mannheim. Biodiesel is counted under chemical products (NST group 08).
• NST 2007 product groups 01 and 04 registered a strong increase in the Port of Mannheim between 2010 and 2020, thanks to the positive evolution of rapeseed, its dominating core component.

 

TABLE 6: DEVELOPMENT OF TOTAL IWT AND OF TRANSPORT OF AGRICULTURAL AND FOOD PRODUCTS IN THE EU, IN GERMANY, IN BADEN-WÜRTTEMBERG, AND IN THE PORT OF MANNHEIM BETWEEN 2010 AND 2020 *

	Port of Mannheim	IWT in Baden-Württemberg	IWT in Germany	IWT in the EU
Comparison IWT volume 2020 vs 2010	-9.8%	-9.5%	-18.1%	-4.8%
Comparison transport volume of agricultural products, foodstuff and food products by IWT 2020 vs 2010	+78.0%	+44.1%	-14.3%	+10.4%
Share of agricultural products, foodstuff and food products within IWT volume in 2020	29.0%	10.9%	12.4%	12.0%
Modal split share IWT (actual)	n.d.	n.d.	8.0%	6.1%


Sources: Port of Mannheim, Landesamt für Statistik Baden-Württemberg, Eurostat [iww_go_atygo] and [tran_hv_frmod], CCNR analysis
* The figures in the table are based on transport volumes (tonnes).
n.d. = no data available
 

BIOMASS AND BIOFUEL WATERSIDE HANDLING IN THE DANUBE REGION (PORT OF STRAUBING)¹⁰⁹

• Another example is the Danube Port of Straubing in Bavaria, the second largest Bavarian inland port after Regensburg. In Straubing, several companies active in the bioeconomy make use of inland waterways, in this particular case of the Danube.
• Since its creation in 1996 the port has focused on agricultural products and biomass. Related raw materials and products represented 91% of all waterside handling in 2020. Companies active in different fields of agribusiness (trade and storage of grain), oilseeds crushing and animal feedstuff production have manufacturing and logistical capacities in the port area. The most important company is ADM, a US food processing and commodities trading company, operating internationally.



Source: Port of Straubing-Sand

 

• Within incoming logistics, raw materials – especially rapeseed and soybeans¹¹⁰ – are transported on the Danube, coming mainly from Hungary, Austria and Serbia. In the Port of Straubing they are processed to rapeseed oil, soybean oil and meal.
• With regard to outgoing logistics, the rapeseed oil is transported mainly by rail (tank wagons) to Mainz (where another manufacturing unit of ADM is located) and to other customers, in order to be processed to biofuel. The rapeseed meal is transported to different destinations in Germany, mainly to feed manufacturers. This transport is carried out partly by ship (50%) and partly by trucks (50%).
• Soybean oil, as well as soybean shred, is exported from Straubing via the Danube, the Main-Danube canal and the Rhine to Basel/Switzerland. The background of this export is that Switzerland allows only soybean products without any genetical modification to be used in its country. As biomass products handled in the Port of Straubing fulfill this sustainability requirement, they can be exported to Switzerland.
• According to Mr Rene van der Poel, General Manager of the ADM company, low water levels on the Danube can cause significant additional transport costs for the agribusiness company. As a rule of thumb, each 10 cm reduction of the water level on the Danube near Straubing causes freight rates and freight costs to increase by 10%.
• However, according to the port director, Mr Andreas Löffert, the infrastructure works that have started on the local Danube stretch in 2021, after several years of preparatory studies, and which aim to deepen the fairway depth, navigating conditions are expected to be much better in the future. From 2023 onwards, vessels coming from the Rhine-Main region will be able to reach the Port of Straubing with a draught of 2.50 metres on 300 days per year. This represents a major breakthrough in terms of available draught and a more efficient connection of the port with the Rhine-Main and the ARA region.¹¹¹

 

FIGURE 7: WATERBORNE HANDLING OF BIOMASS IN THE PORT OF STRAUBING *


Source: Port of Straubing
* Other biomass = mainly grain
 
• According to the port director, Mr Andreas Löffert, the transshipment of dry biomass is carried out with the usual cranes and gripper arms that are present in most ports for dry cargo operations, so that additional infrastructure is not necessary.
• Thanks to its orientation towards the bioeconomy, the port’s overall figures of waterside handling have developed more positively than at regional (Bavaria), national (Germany) and international (EU) level. Overall IWT in Straubing increased by 9.2% between 2010 and 2020, compared to a decrease on the regional, national and international level. The example of the Port of Straubing shows that a rather high modal split share and an overall positive development of IWT figures can be created for IWT when it is integrated into biomass supply chains.

 

TABLE 7: DEVELOPMENT OF TOTAL IWT AND OF TRANSPORT OF AGRICULTURAL AND FOOD PRODUCTS IN THE EU, IN GERMANY, IN BAVARIA, AND IN THE PORT OF STRAUBING BETWEEN 2010 AND 2020 *

	Port of Straubing	IWT in Bavaria	IWT in Germany	IWT in the EU
Comparison IWT volume 2020 vs 2010	+9.2%	-14.2%	-18.1%	-4.8%
Comparison transport volume of agricultural products, foodstuff and food products by IWT 2020 vs. 2010	+28.0%	-3.9%	-14.3%	+10.4%
Share of agricultural products, foodstuff and food products within IWT volume in 2020	91.2%	33.8%	12.4%	12.0%
Modal split share IWT (actual)	15.7%	n.d.	8.0%	6.1%


Source: Port of Straubing, Bayerisches Landesamt für Statistik, Eurostat [iww_go_atygo] and [tran_hv_frmod], CCNR analysis
* The figures in the table are based on transport volumes (tonnes)
 
 

BIOMASS USED FOR ELECTRICITY GENERATION

• Biomass is not only used for the transformation into liquid biofuels, but also for generating heat and electricity from solid biomass. This is often done in the form of combined heat and power generation. Raw materials often used for combustion are wood pellets/wood chips.
• In Rhine countries in 2019, biomass (including solid biomass, liquid biofuel and biogas) accounted for 12% of electricity production in France, 8% in Germany, 5% in Belgium, 3% in the Netherlands and 1% in Luxembourg. Regarding Danube countries, we observe a constant growth of biomass in electricity production in Croatia, reaching a share of 7% in 2019. Hungary and Austria have both a share of 6%, Bulgaria 4% and Romania 1%. The share of biomass in Bulgaria is not impressive, but it is interesting that this share was below 1% until 2017, and it has since seen a sudden growth.
• Installed capacity for producing electricity from biomass grew by one and a half times between 2010 and 2019. In general, all Rhine countries have increased their capacity, with the exception of Belgium, that has seen a decrease from 2010 to 2019. As the figures in table 8 also show, the growth rates of installed capacity have been reduced in the decade from 2010 to 2019, compared to the decade from 2000 to 2010.

 

TABLE 8: INSTALLED NET CAPACITY (MEGAWATT) FOR PRODUCING ELECTRICITY FROM BIOMASS * – RHINE COUNTRIES

	Installed MegaWatt in year			Growth factor
	2000	2010	2019	2019 vs 2010	2010 vs 2000
Germany	474	5460	8904	1.6	11.5
France	216	524	1374	2.6	2.4
Belgium	67	889	781	0.9	13.3
Netherlands	93	375	431	2.0	5.0
Luxembourg	0	9	47	5.1	n.d.
Total	850	7257	11537	1.6	8.5


Source: Eurostat [NRG_INF_EPCRW]
* Biomass includes solid biofuels, pure biogasoline, pure biodiesels, other liquid biofuels, and biogases.
 
• Data for Danube countries tell a different story. From 2010 to 2019, there was an overall decrease in installed net capacity for producing electricity from biomass. In particular, Austria halved its capacity in that time period. The exception is Croatia, which increased it by more than ten times in this timespan. Overall, it can be concluded that the potential of biomass is still not made use of in Danube countries.

 

TABLE 9: INSTALLED NET CAPACITY(MEGAWATT) FOR PRODUCING ELECTRICITY FROM BIOMASS*– DANUBE COUNTRIES

	Installed MegaWatt in year			Growth factor
	2000	2010	2019	2019 vs 2010	2010 vs 2000
Austria	804	1933	978	0.5	2.4
Hungary	6	493	453	0.9	82.2
Slovakia	0	178	220	1.2	n.d.
Romania	251	20	139	6.9	0.1
Croatia	0	9	127	13.4	n.d.
Bulgaria	52	10	57	5.7	0.2
Serbia	0	0	24	n.d.	n.d.
Total	1206	3018	2428	0.8	2.5


Source : Eurostat [NRG_INF_EPCRW]
* Biomass includes solid biofuels, pure biogasoline, pure biodiesels, other liquid biofuels, and biogases
 
 
Gentse Warmte Centrale (Ghent, Belgium)¹¹²
• A good example of a project where biomass is used for producing electricity is the ‘Gentse Warmte Central’ (a combined heat and electricity biomass power plant) of the Belgian Eco Energy (BEE) company. The project started its construction phase in January 2020 and aims to produce green energy (heat and electricity) using wood waste that cannot otherwise be recycled. The wood waste comes from the demolition of old houses and from businesses.
• The volumes of feedstock (wood residues) transformed on an annual basis amount to 160,000 tonnes. The plant is located in the North Sea Port area in Ghent. This location will allow the predominant use of inland vessels to transport the materials to the power plant. The use of inland vessels for at least 75% of the 160,000 tonnes of wood waste is foreseen according to company information. The plant will produce 156 GWh of green electricity annually (the annual consumption of about 50,000 households) and supply green heating energy to industrial customers in the area around Ghent. The biomass power plant is equipped with advanced air purification technologies and meets strict emission standards.

TRANSPORT OF HYDROGEN ON INLAND VESSELS

INTRODUCTION

• Today hydrogen use is dominated by industry, namely oil refining, ammonia production, methanol production and steel production. It can also be used in the transport sector, as a fuel, or for power generation. Hydrogen can be extracted from fossil fuels, but also from renewables or nuclear power. The overwhelming majority of hydrogen is still produced from fossil fuels, so that there is significant potential for emission reduction.¹¹³
• Due to its limited availability in its natural state, hydrogen must be produced on an industrial scale to be used, for instance, as an alternative fuel. Currently, there is much research on how the electrolysis process, which is needed to split hydrogen from oxygen, can be made as energy-efficient and climate-neutral as possible. Pure hydrogen can be transported as compressed gas or in liquid form. Specific requirements for the transport of hydrogen need to be respected as it is considered to be a dangerous good according to ADN regulation.
• When transported as compressed gas, standards such as the pressure of up to 350 bars or 700 bars need to be respected. The hydrogen tanks inside the vessel need to withstand this pressure. The high volume and space that is needed for this kind of transport is a significant hurdle for its commercialisation.
• When in liquid form, temperatures as low as – 253°C need to be created. The higher weight of liquefied hydrogen due to a higher density per cubic metre is another aspect that needs to be taken into account.
• Finally, when transported in liquid form under the liquid organic hydrogen carrier (LOHC)¹¹⁴ technology, hydrogen is loaded on a fluid which can be transported in double hulled tanker vessels. LOHC absorbs hydrogen and releases it through chemical reactions. Advantages of this kind of transport lie in the safety, use of existing vessels and above all the high energy density in the liquid case. Furthermore, the amount carried amounts to 17 million kg H2 in a tanker vessel. To indicate a better understanding of this vast amount: a 35-wagon railway could carry up to 50 thousand kg H2 whereas a truck would carry 1.5 thousand kg H2.
• The most advanced processes for the production of hydrogen are reforming from fossil sources and water electrolysis. The second option (so-called ‘green hydrogen’) is more favourable from a climate neutrality perspective, in particular when the electricity that is used for the electrolysis is of renewable origin.
• There are two main possibilities of using hydrogen for the propulsion of vehicles: the use of a fuel cell and the direct combustion of hydrogen in an internal combustion engine. In a future hydrogen economy, vessels propelled by hydrogen could transport hydrogen using the LOHC technology.
• With regard to the development of hydrogen, it can be seen that recent public policy pushes for the development of hydrogen, such as the ‘Hydrogen strategy’ presented by the European Commission in 2020.¹¹⁵ Within the framework of the European Green Deal, hydrogen has also been singled out as central for addressing the reduction of greenhouse gas emission, preparing a climate-neutral economy and for evolving energy systems in Europe. At national level, hydrogen plans are also being deployed, and the number of countries with policies that directly support investment in hydrogen technologies is increasing, along with the number of sectors they target. Named examples are the French ‘plan de déploiement de l’hydrogène’, foreseeing funding opportunities for the deployment of green hydrogen¹¹⁶ or the German ‘Nationale Wasserstoffstrategie’.¹¹⁷ Green hydrogen programmes are also expected to raise renewable capacity, although investors could also use existing wind, solar PV and hydropower plants for hydrogen production.
• As regards demand, it is interesting to note that demand for hydrogen has been increasing since 1975 and continues to rise. Today, clean, widespread use of hydrogen in global energy transitions faces several challenges, in particular, its cost of production from low-carbon energy, which remains very high. The fact that it is currently mainly produced from natural gas and coal, means that its production is responsible – under current conditions – for important GHG emissions. The slow development of hydrogen infrastructure is an important challenge.¹¹⁸ Regarding the production costs, the International Energy Agency (IEA) estimated that the cost of producing hydrogen from renewable electricity could fall by 30% by 2030 as a result of declining costs of renewables and the scaling up of hydrogen production. Among the recommendations from the IEA to support the deployment of hydrogen, one of these relates to the expansion of hydrogen in transport through fleets.
• Nevertheless, the momentum towards the development of clean hydrogen is high and production of clean hydrogen, as well as the demand for clean hydrogen, is expected to rise. Transport solutions for clean hydrogen will be needed, hence representing possibly a new transport opportunity for inland vessels. The transition towards clean hydrogen will take several years, thereby leaving sufficient time for the inland waterway sector to develop suitable transport solutions.

 

TRANSPORT OF HYDROGEN ON INLAND VESSELS

• Hydrogen as a cargo could be transported by pipelines in gaseous form or by ships in liquid form.
• Green hydrogen – as mentioned earlier – is emission-free because it is generated by using renewable or low-carbon energies to split water via electrolysis and it is storable in the long term. This makes it a useful resource to decarbonise the industries and reach the emission targets at European level. The production of green hydrogen requires a high amount of green electricity that can be generated from several sources (wind, photovoltaics, hydropower).
• In order to create a positive case for the transport of hydrogen on inland vessel, good access to maritime and inland waterways and ports from the green hydrogen production site is an important element. Large areas for producing green electricity (wind onshore, photovoltaics and biomass), should also be available.
• Given the strong political aim in the European Union to develop green hydrogen technologies, there is momentum to support pilot projects promoting strategic value chains, such as creating a pan-European supply chain along main European corridors. Such projects are currently ongoing and important insights can be gained from them.
• For instance, the most suitable form for storing and transporting hydrogen on inland vessels has to be identified, with the use of LOHC (liquid organic hydrogen carrier) technology, ammonia, liquid hydrogen or compressed gaseous hydrogen all providing different advantages and drawbacks. In order for transport of hydrogen on inland vessels to develop, the solution should be cost-efficient and easy to implement.
• In light of the anticipated future needs in terms of transport of hydrogen, some inland shipping companies are already investing in a fleet adapted for the transport of green hydrogen, this is for instance the case of Chemgas Shipping BV.¹¹⁷