The start of 2020 saw the introduction of a lowered permitted standard for sulphur emissions from shipping. For many, that has been an expensive adaptation. The industry will come under continued pressure to improve its performance on climate changing pollution.
That helps explain why the UK Chamber of Shipping marked the turn of the year by trumpeting its importance to the economy. In a year when trade will loom large, aided by rhetoric about “Global Britain”, it is ships that will have to do much of the heavy lifting. At present, they carry 95% of Britain’s trade in goods.
So we’re told we need to appreciate the industry more, recognising that it had turnover of £19bn in 2017, an increase of 41% since 2010 (a bad year for trade, mind). According to analysis by the Centre for Economic and Business Research (CEBR), it directly supports 181,000 jobs.
What about Scotland?
The same CEBR recently provided research specific to Scotland’s marine sector, commissioned by the Maritime UK trade group.
It reckoned, using figures from 2017, on £9.9bn in turnover, £3.7bn in added value and 41,000 jobs. That’s a big share of the UK total: 21% of turnover, 27% of value added and 19% of employment.
With such a long coastline, most of Britain’s fishing fleet, ferries to serve its islands, and world-class opportunities for seaborne leisure, it’s not hard to see why Scotland might be that way.
But the numbers are skewed heavily by the presence of offshore oil and gas. This, you’ll note, is not research just about shipping, but about the wider maritime sector.
Scotland had only 13% of shipping employment in the 2017 analysis, and 10% in ports. It had 27% of shipbuilding employment (the aircraft carriers alliance was busy at Rosyth that year) and 94% of offshore oil and gas jobs.
Those oil and gas jobs account for a generous share of value added, as you should expect from a valuable commodity. The average job equated to £109,000 in 2017.
More was generated, however, by the maritime business services – shipbroking and insurance, for instance – in which London dominates, accounting for £113,000 per person.
That’s a big question, for the economy, for constitutional politics, and for the environment.
The CEBR forecasts that the Scottish maritime sector will grow at about 2.6% per year up to 2023.
That’s twice the rate of the economy as a whole – but it also points out that seaborne global trade is growing at 3.8%. UK government projections are well below that although, over time, they add up to a 39% rise in the volume moving through British ports by 2050.
The study reflects Oil and Gas Authority projections for declining activity in UK waters. It suggests that as less oil comes through pipelines, more will have to reach Britain by tankers.
That’s unless the industry adapts to growing demands for action on climate change.
The common justification for keeping the drillers busy in UK waters is that the energy has to come from somewhere: better to make it local than bringing it long distances by tankers.
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