How we shift the conversation on the sustainability challenge

Over 6,000 superyachts over 30m make up the current global fleet and with a healthy new build book currently in the pipeline, the challenge to bring them into line to match current projections on sustainability is considerable.

On the 17th of May 2022 at the Yacht Club de Monaco, we discussed some of the key points at the heart of the sustainability issue with our panel of experts.

• Captain Malcolm Jacotine, Founder of Three Sixty Marine and superyacht2030.com
• Matteo Magherini, Business Development Coordinator at Lateral Naval Architects
• Will Bishop, Partner at Superyacht Partners
• Moderated by Rob Papworth, Operations Director at MB92 La Ciotat

Redefine the message

On a recent refit project recalls Will Bishop, the owner decided to apply silicone antifouling. While the cost to apply is higher than traditional antifouling, the fact that it did not require re-application again for three years appealed to the owner, given the amount the intended to use the yacht per year. “If you can show a material benefit, it becomes an easier thing to sell to the owner” says Bishop. Cost will always prove to be a principal factor whether you are a superyacht owner or at the petrol pump on the local garage forecourt. Yet if you can demonstrate the pay offs of these investments not just in terms of self-satisfaction for “doing your bit” but in economic terms or other non-tangible benefits, you are more likely to get owners onboard.  

The provision of data, according to Malcolm Jacotine, is essential to supporting this shift. “Often, many of the solutions fall at the hurdle of the additional capital expense without fully analysing the future operational expense of solutions. There may be that 3-5% initial uplift on cost and, aside from the comfort benefits, this could be paid back over the years in reduced energy consumption and lower maintenance costs but could also affect finance costs and resale value. However, it is not yet presented to owners in that way.” 

However, are owners open to these conversations? According to Matteo Magherini, “when you want to innovate or invest in new technologies, there is always a commercial risk involved. There are a few who are prepared to take it, but not many. What we see on new build projects is that over 10 clients who come with this amazing brief, 8 will buy a vanilla boat, 1 will be somewhere in the middle and then you will find your real innovator every 5 years or so.” 

Bishop believes that environmental considerations “will continue to rise up the list of criteria in a client’s brief” and hopes this becomes the direction for future yacht owners. He draws optimism from trends in sail yacht design where “the benefits of a low fuel burn rate, increased range coupled with the ability to operate without producing any emissions for a limited period is becoming the norm.  I hope the same approach becomes common place in the motor yacht sector.” 

The right tone

There is little argument that owners must be made more aware of the impact this luxury asset makes but “We need to balance it pretty carefully, so we don’t drive people away from wanting to charter or wanting to buy a yacht” warns Bishop. Demonising owners or presenting charterers who have saved for a once-in-a-lifetime holiday with a carbon dioxide impact certificate at the end of their trip, could push people away and towards other, equally high impact pursuits or holiday options. 

The rules of the game

As an industry we can do more to engage with owners on the sustainability issue, but we must back this up with a framework that effectively channels this change. The role of regulation is going to be central. Magherini highlights its importance given that “all the latest improvements to our footprint when it comes to water pollution or CO2 emissions with filters, have been pushed by regulations.” 

However, there is a huge gap when it comes to regulations for superyachts. “At the moment there is no regulation requiring you to build an energy efficient superyacht” says Jacotine. In the absence of an IMO mandated carbon tax on shipping, the EU (European Union) are set to introduce a carbon tax as early as 2023 which, at today’s carbon price, would effectively add around €300 to the price of a tonne of fuel. The exact details are still being worked on, including reducing minimum size from 5000GT to 400GT which could potentially impact many superyachts. In the absence of other regulation, a carbon tax also helps reduce the ‘green premium’ and accelerate change. Regulation has the power to take options off the table for owners and the industry so, according to Bishop, “it then becomes the norm and is not part of a discussion anymore”  

 The existing fleet challenge

These days, “when you talk about new build, one of the fundamental topics is future proofing” says Magherini. However, “a lot of older vessels were designed and built using different principles and philosophies compared to now.” 

The average age of the existing superyacht fleet is around 20 years old and so the challenge facing refit is how to integrate modern technologies with space requirements beyond what was envisaged at the time of construction. Given the intrusive work and associated cost involved to implement major overhauls such as propulsion systems, for many owners the cost benefit simply does not add up. “On the smaller boats between 40 and 50 metres, I don’t think the big refits of the magnitude we are talking about will make a real difference and are certainly not going to reflect on re-sale value” questions Bishop.  

Such extensive work may not be required to make an impact and Magherini suggests that “by just changing equipment on board, you can save a lot of energy. For example, upgrading the HVAC system would reduce hotel load emissions”. Greater efficiency and control permitted by modern systems could form part of a tiered refit package proposed to owners according to Magherini. “You could see bronze, silver and gold options on a sustainability ladder” where equipment upgrades and other quick wins could be the easy sell and more extensive gold packages could represent wholesale changes to areas such as propulsion, energy management, ballast water treatment, etc. 

Some of the low hanging fruit options available could be the implementation of biofuels. Jacotine believes that biofuel is a practical option for the legacy fleet. “Even today HVO (Hydrogenated Vegetable Oil) is compatible with most engines without any modification although some changes would be required to optimise use.” However, the cost is uncompetitive at the moment and while supply infrastructure is improving, it would still prove a hurdle for owners wanting to sail to remote areas where supply cannot be so easily found. 

Operational Use

One of the main contributors to the impact of a superyacht is how it is used. As a former Captain himself, Jacotine stresses the importance that crew can have as “when you look at how yachts are used, about 20% of the time is spent with guests on board. The rest of the time gives massive opportunities to the Captain and crew to have a more conscious approach to how that vessel is run and how they use energy”.  Given that around 80-85% of the time the yacht is moored or stationary, being connected to shore power, when possible, can also have a significant impact on the overall footprint.  

The conversations that the Captain has with either the owner or charter guests can go a long way to determining impact. As a Captain “you don’t put the hammer down and go flat out everywhere unless the owner specifically tells you to do that” says Bishop and maybe the way these conversations are presented can result in more buy-in from owners or guests. He continues “there needs to be some balance between how you operate and deliver that luxury experience”. This does not necessarily mean a compromise as operational changes can often enhance the owner experience with noise reduction and comfort. 

Change the narrative

The pressure is growing, and current global events have placed increased focus on superyachts and their owners. This is not just in the economic factors such as fuel and material costs but also in the reputational impact that owners are facing now more than ever. Increased intrigue on who owns what means there is nowhere to hide for owners who choose to ignore issues such as sustainability. And for those few that do, they may need to answer to calls closer to home. Magherini highlights that some owners’ attitude is being influenced by the next generations. “Their children and grandchildren are pushing for it.”  

Ultimately, according to him, we must “change the narrative on superyacht owners towards being investors in technology and supporters of the wider maritime industry”. We need to promote the positives around sustainability and present owners with a different discussion to strictly being based around cost.  It is their engagement and appetite to want to change, supported by a regulatory mechanism and cohesive industry, that will drive this essential movement. 

Planning your next refit and would like to discuss the most appropriate options according to your needs?  

Contact our team 

Discover more on the current state of sustainability in the industry and the viability of proposed solutions, download our sustainability reports here (link).  

Keep up to date on our own sustainability journey at https://mb92.com/sustainability