There's No Such Thing As a Bad Industry. the Problem Is Bad Environ- Mental Management.«

February 2020 issue

CRUISE NEWSLETTER Insights into the cruise industry

Milos Grgic Environmental Officer on Mein Schiff 2 »There’s no such thing as a bad industry. The problem is bad environmental management.« More on page 6

CONTENT

Cruise ships: Innovation drivers on the high seas 2 TUI Cruises: New Environmental Advisory Board 3 Guest article: Dubrovnik’s mayor does some straight talking 4 Hotspots: No need for concern about cruise ship passengers! 5 Reportage: With the Environmental Officer on Mein Schiff 2 6 Glossary: Green cruising terms 8 Top 6 cruise topics 9 CRUISE SHIPS: INNOVATION DRIVERS ON THE HIGH SEAS

There are over 50,000 ships sailing our oceans. Share of LNG-powered ships on the order books Only 400 of those are operated by cruise companies. This relatively small segment is setting a big example when it comes to sustainable shipping. % Cruise ships 44 Environmental investment programme % Cruise companies around the world have already invested Merchant ships more than USD 22 billion in energy efficient and clean 3 technologies. The cruise ships that are launched today are often fitted with high-tech equipment that didn’t even LNG exist five years ago. That’s why younger fleets increasingly tend to offer a more eco-friendly cruising experience. Sources: CLIA, DVN GL TUI Cruises is a good example: six out of seven ships are duce LNG fuelling stations in the future. That isn’t the less than five years old compared to an average age of case today. 14 for all the cruise ships in service around the globe. Thanks to the comprehensive modernisation of the fleet l Hapag-Lloyd Cruises: The Hapag-Lloyd Cruises fleet and voluntary initiatives, TUI Cruises and Hapag-Lloyd has five small and exclusive ships, two of which were Cruises are both green cruising pioneers. only added a few months ago. In May 2021 they will be joined by the HANSEATIC Spirit, an expedition l TUI Cruises: The cruise company has put a new ship ship which is replacing the BREMEN. The ships are into operation every year since 2014 and it has the equipped with the very latest environmental technol- youngest fleet in the world. This has a very positive ogy, reflecting the cruise company’s commitment to impact on its environmental footprint and TUI Cruises low-emission cruising. From July 2020 onwards the is committed to energy efficiency, and to reducing fuel ships will use low-emission marine gas oil exclusively, consumption and emissions in its entire fleet. Volun- which has a sulphur content of less than 0.1 percent. tary exhaust gas cleaning with so-called scrubbers and The routes are also planned with average vessel speeds catalytic converters on six out of seven ships makes that reduce environmental impacts by allowing the a further contribution to emissions reduction. And captains to dispense with the last three knots – and the two ships that are scheduled for delivery to TUI make an additional fuel saving of 30 percent. Cruises in 2024 and 2026 have been ordered with low-emission LNG (liquefied natural gas) technology. We assume that a greater number of ports will intro- Incentives for a green infrastructure The cruise companies are paying upfront to improve their Number of ships in the global maritime fleet environmental footprint. Take the example of shore-side power. Use of shore-side power makes an important contribution to local air pollution control. Most of the ships in 0.8% the Hapag-Lloyd Cruises fleet are shore-power-ready, and 400 cruise ships the first TUI Cruises ships will be equipped for it this year. The problem is that the only two ports in Europe with the 50,000 necessary infrastructure are Hamburg and Kristiansand in Norway. Kiel and Warnemünde are now also planning to ships 99.2% Merchant ships install shore-side power systems, having received the support they urgently needed from policymakers. In mid- October Germany’s central and state governments agreed on an incentive scheme to encourage ports to develop Sources: German Federal Ministry for Economic Affairs and Energy, Cruise Business Review shore-side power infrastructures. Hopefully it will serve as an example. 2 CRUISE NEWSLETTER February 2020 issue TUI CRUISES: NEW ENVIRONMENTAL ADVISORY BOARD

TUI Cruises already operates the youngest and most environmentally friendly cruise fleet in the world. And it has an even more ambitious vision. The cruise company’s next objective is to provide emission- free and climate-neutral cruises. It aims to achieve this with the help of input from the experts and lateral thinkers who are part an independent Environmental Advisory Board. This board held its first meeting in mid-November 2019 and regular exchanges take place between the board members and TUI Cruises’ management.

Members of the Environmental Advisory Board

»As one of the most energy »The keys to a climate-neutral intensive forms of tourism the future in the cruise sector are cruise sector faces a massive the use of renewable fuels transformation challenge. and compliance with ambitious We hope that, together, we can exhaust gas pollutant achieve a healthy balance between emission limits. climate protection and economic efficiency.

Professor Stefan Gössling Professor Horst Harndorf University of Lund and Linnaeus University in Kalmar Former professor at the University of Rostock specialising in the reduction of pollutant emissions in shipping Professor Gössling has been conducting research into climate change and mobility since 1992. He was one of the authors Professor Harndorf has played an instrumental role in contributing to the IPCC’s fourth assessment report. advancing research into more environmentally friendly engines.

»Although ships generate far »I’m looking forward to the less emissions then road vehicles, challenge of harmonising demand they face a much higher level of for a more diverse and quality- criticism from environmentalists. oriented range of tourism products This is partly because of their with climate and environmental visibility, but also because shipping targets. is not included in the Paris Agree- ment and has to develop its own emission reduction roadmap.

Professor Lucia A. Reisch Ole von Beust Copenhagen Business School and visiting professor at Solicitor and First Mayor of Hamburg between 2001 and 2010 Zeppelin University Friedrichshafen After completing his term in office as mayor he founded The behavioural economist chaired the Federal Ministry of the Beust & Coll consultancy firm, which set up the “Maritime Justice and Consumer Protection’s Council of Expert Advisors LNG Plattform” initiative, and continues to manage it today. on Consumer Issues between 2014 and 2018 and she was a member of the Council for Sustainable Development between 2010 and 2019.

3 CRUISE NEWSLETTER February 2020 issue GUEST ARTICLE: DUBROVNIK’S MAYOR DOES SOME STRAIGHT TALKING

»In 2017 Dubrovnik decided enough was enough! On some days there were 12,000 guests in the Old City at the same time. The city was full of day excursionists, cars and coaches, and at times there were half a dozen »When the locals cruise ships in the port. No one was happy – neither the are happy, the locals nor the tourists. That was when I realised that the tourism business, and especially the cruise ship segment, tourists are even had to become more sustainable – particularly since happier. our economy relies so heavily on tourism. Four out of five residents live from tourism. For example, cruise ship guests spend 58 euros a day each in our restaurants, souvenir shops and museums.

Municipalities have the power to act

Better management of the arrivals schedule is the key Mato Franković, Mayor of Dubrovnik since June 2017 to organising cruise ship business more effectively. Our Old City is far too small to cope with guests from seven cruise ships at once. Research has shown that two cruise Important alliance with the cruise industry ships at the same time is the ideal scenario: two in the To a large extent, this positive development is the result morning and two in the afternoon. In 2018 we only had of mutual understanding. In 2017 we presented a video to two cruise ships in port at the same time in 70 percent of the cruise ship operators showing chock-a-block scenes in cases. That took a lot of the pressure off. In 2019 we kept our Old City with guests queueing for more than an hour up the two-ship restriction in 90 percent of cases and, in to get into museums. The situation was frustrating for us 2021, we won’t be seeing more than two ships on the and frustrating for the guests. So we sat down together quayside at any time. We have also taken various other and discussed our options. The outcome of those talks was actions to control the flow of land-based day-trippers, a comprehensive Memorandum of Understanding signed such as a parking app, an AI-based visitor forecast and a by Dubrovnik and the global Cruise Lines International ticket system for day visitors to the Old City that will be Association (CLIA) at the end of July 2019. Among introduced in 2020. other things it includes an educational campaign entitled “Respect the City”, the communication of the 2020 cruise ship berthing policy and the joint development of a destination management plan. I believe we can play a role model function for other destinations. The most important advice I can give other mayors in similar situations is to seek direct dialogue with the cruise ship companies. Sustainable solutions are best for everyone: the locals, the tourists and the cruise lines.«

4 CRUISE NEWSLETTER February 2020 issue HOTSPOTS: NO NEED FOR CONCERN ABOUT CRUISE SHIP PASSENGERS!

Tourism is one of the most important growth Developing new attractions sectors in Europe. It provides far more people In the majority of cases the effective scheduling of with work than, for instance, the car making in- cruise ship passenger arrivals is the most important thing. dustry, and it is a source of income and prosper- Individualised excursions are a good management tool and ity for non-industrial regions. In some cities and an increasing number of cruise companies are developing districts there are discussions underway about them or cooperating with local providers to offer their how to better channel that growth – including guests as many impressions as possible of the places they growth in the number of cruise ship passengers. visit during the cruise. However, the local authorities can People who see cruise ships sailing into port are often also promote land excursions to less well-known tourist surprised by their dimensions. However, cruise ship attractions. passengers are much easier for the cities to manage than In addition to the popular ports, Hapag-Lloyd Cruises day trippers arriving individually by car, coach or train. calls in at smaller towns where the bigger cruise liners are not able to berth. En route from Hamburg to Dublin, the Cruise tourism is easy to manage EUROPA 2 stops at the major port of Southampton, but Cruise companies plan their routes in good time. In fact, also at the lesser known ports of Fishguard in Wales and berths are normally requested from the ports around two Cobh in Ireland. One of the positive side-effects of this is years before the cruise actually takes place. This means that new destinations and districts develop a tourism in- that port operating companies – many of which are state- frastructure, with income opportunities for restaurants and owned – can effectively manage the number of cruise retailers in locations that are off the beaten tourist track. ships in their port at any one time. If the growth in cruises Cruise tourism is therefore easier to manage than often places a burden on the local communities, the politicians, assumed. And the destinations don’t need to build hotels, port operators, businesses, cruise companies and civil resorts or motorways for the cruise ship passengers. society can agree and effectively impose maximum limits. The fact that limited resources have to be deployed is the Dubrovnik is a positive example of a city that has done just reason why port towns and cities welcome cruise ships. that. However, it only makes sense to introduce these kinds of measures if cruise tourism really does account for a relevant percentage of the tourists – which rarely happens.

Share of visitors from cruise ships

How many tourists can a town or city ‘cope with’? One city where this is a talking point is Barcelona. The city has an intensive cruise infrastructure – yet cruise ship passengers only account for a small percentage of its visitors.

million room nights sold 29.7 9% million cruise ship guests BARCELONA 2.7

Sources: MedCruise, Barcelona Tourism Authority

5 CRUISE NEWSLETTER February 2020 issue Milos Grgic, Environmental Officer on Mein Schiff 2 »There’s no such thing as a REPORTAGE bad industry. The problem is bad environmental management.«

20 students were enrolled in the converters in the main and auxiliary »Our passengers are far material flow management master’s engines which reduce nitrogen oxide degree programme at Trier University emissions by up to 75 percent. He better informed about of Applied Science’s Environment also checks the “scrubbers”, which are environmental issues and Campus in 2008, including Milos Grgic. located in a silo-like container exten- All of the freshers were united by their ding up around 55 metres through more critical than they interest in environmental protection 14 decks and remove almost 99 per- were a few years ago. and sustainability and would go on to cent of sulphur from the ship’s find jobs all over the world – with air- exhaust emissions. “Scrubbers are like That’s a good thing. lines, waste disposal companies and high-pressure showers that wash out

local authorities. One of their lecturers sulphur, nitrogen oxide and other pol- the limits. The limit for sulphur is one said to them: “Fight for greener in- luting particles. The cleaned washwater example, and the IMO is enforcing a dustry. You can make a difference.” Ser- is then discharged into the ocean and new 0.5 percent global cap on sulphur bian-born Grgic opted for a career on the residue is collected and disposed content in fuel from 1 January 2020, the ocean and he has been Environ- of on land,” explained Grgic. “No other lowering the present 3.5 percent limit. mental Officer at TUI Cruises for ten ship at any cruise company is cleaner In certain regions, such as the North years now. At the moment he’s part than Mein Schiff 2.” Sea and the Baltic Sea, a stricter sul- of the Mein Schiff 2 crew. Strict limits point the way phur limit of 0.1 percent has been in The cruise ship was christened in force for some time. “I think it’s right February 2019 and is sailing the Carib- The Environmental Officer keeps a for the IMO to impose stricter environ- bean this winter. Grgic is responsible very detailed log. What are the ship’s mental standards,” said Grgic. “Giving for compliance with environmental exhaust emission values? What level of up is not an option.” He believes that standards on board Mein Schiff 2. water quality is the ship’s own biologi- TUI Cruises is setting an example. For example, he monitors the catalytic cal sewage treatment plant delivering? All of the cruise company’s new ships How is the waste managed on board have been surpassing environmental the ship? Grgic is accountable for all requirements and complying with the these processes and he has to report 0.1 percent limit since 2014 thanks to to the flag states’ controllers and also comprehensive exhaust gas cleaning – to the port authorities and harbour around the world and around the clock. police. They arrive unannounced and conduct meticulous audits. If any non- Reduce, reuse, compliance issues are identified the replace, recycle cruise company faces severe fines Grgic is also very thorough when it of up to EUR 150,000. “That’s never comes to waste management. Around happened to us because those limits 7 litres of waste is produced per guest are sacred to us,” said Grgic. each day. To maximise the recycling rates, Milos Grgic is in the Caribbean on Mein Schiff 2 this winter The UN’s International Maritime all waste is meticulously separated on Organization (IMO) regularly tightens board the cruise ship.

6 CRUISE NEWSLETTER February 2020 issue Waste separation is the same at sea as it is on land: cans are compressed on board and handed over to a waste disposal company for recycling when the ship calls into port.

Waste is sorted into more than 40 cate- about our carbon footprint and about gories, from glass and plastic to special the chemicals we use in our dish waste. Grgic has to liaise with the ports washers.” months in advance of the cruise to establish whether and how the sorted Policy issues waste can be recycled. In some of the less developed regions this isn’t some- Our guests’ environmental awareness thing the officer can take for granted, so is important because it increases the he often has to come up with his own social pressure exerted by the general solutions. He explained, “Waste disposal public on the policymakers to address is still complicated at some ports. We this important issue. And that is support them and advise them on local urgently necessary as far as Grgic is partners they can collaborate with. They concerned: “The nation states have appreciate that.” It’s a serious issue. It is to exert their influence via the IMO. The Environmental Officer continuously checks water quality. the cruise company’s duty of diligence Sooner or later we will have to find to review waste disposal at the ports alternatives to fossil fuels and that’s once a year. Grgic and his team do this only going to be possible with political by accompanying the waste disposal support.” State and local governments The ship is at Bridgetown port in trucks and inspecting the waste disposal could initiate specific key improve- Barbados, where the quay is right next companies’ equipment and processes. ments in addition to the IMO. The to one of the most beautiful beaches Environmental Officer is completely in the Caribbean. Grgic laughs: “You Dialogue with the guests baffled by the fact that only very few have to apply factor 50 sun lotion here ports offer shore-side power. “We’d if you don’t want to be lobster red by The Environmental Officer has been love to switch off our engines in port the time you arrive back on board.” working on board ships for ten years. and retrofit more ships to work with Many things have changed during that affordable and, whenever possible, decade, but not only relating to emis- green power – we just need a power sion limits and waste management. socket at the port.” The policymakers »Even though cruise ships The guests’ awareness has also should provide incentives to the ports account for less than changed. “In the past we would only to encourage them to make the neces- get a few guests asking us questions sary investments. 1 percent of the global fleet, on environmental topics. Now around Still following the Trier university we can still provide two dozen passengers are approaching lecturer’s advice, Grgic is a green cruise me every week,” said Grgic. Some of major impetus for crusader. After a long day at work them have really detailed questions. he’s looking forward to a few hours off. “I get asked how we recycle food waste, green shipping.

7 CRUISE NEWSLETTER February 2020 issue GLOSSARY: GREEN CRUISING TERMS

Ú Exhaust gas cleaning Emission reductions in TUI Cruises’ new builds versus comparable cruise ships Modern exhaust gas after-treatment systems such as hybrid scrubbers and SCR catalytic convertors reduce Sulphur Nitrogen Particulate sulphur emissions by up to 99 percent, nitrogen oxide emissions emissions emissions emissions by up to 75 percent and particulate emissions by up to 60 percent. In 2014 TUI Cruises was the first cruise company in the world to install such a system. minus minus minus % The newest ships all have additional catalytic convertors 99 75% 60% for their main engines to achieve further significant reductions in nitrogen oxide emissions.

Very few connections European ports with shore-side power connections for large cruise ships Ú Shore-side power Numerous cruise ships are equipped to use shore-side power as a source of energy for hotel operations while Bergen Oslo they are in port. This would reduce local emissions and the ships’ carbon footprint – if green power were available. However, there are only around a dozen ports with shore- Kristiansand side power connections at individual berths and, in Europe, there were only two at the end of 2019. TUI Group expects that the shore-side power infrastructure will expand in the Kiel future as a result of political incentive schemes. The Hapag- Rostock Lloyd Cruises new builds are equipped to use shore-side Hamburg power, and TUI Cruises will have retrofitted its entire fleet by 2023. Cities and port operators should give priority to investments into the development of shore-side infrastructures.

in operation planned

Marseille

Barcelona

Sources: International Council on Clean Transportation, CLIA, fvw

8 CRUISE NEWSLETTER February 2020 issue TOP 6 CRUISE TOPICS

Shore-side power There are only around a dozen ports in the world providing shore-side power connections at individual berths. The development of the necessary infrastructure and relevant incentive schemes should be a top Infrastructure priority. Hapag-Lloyd Cruises and TUI Cruises are investing upfront. urgently needed Liquefied Natural Gas (LNG) LNG is the cleanest burning marine fuel – but it is only available at a few ports. Here, too, the policymakers should be introducing incentives for the development of a green infrastructure. The TUI Cruises new builds, which are scheduled for delivery in 2024 and 2026, will be LNG-compatible. € % 65 Share of the Hotspots per short trip global fleet <1 It is far easier for local authorities to steer cruise ship The global merchant fleet consists of 50,000 vessels. passengers – who, for example, each spend 65 euros Cruise liners only account for well under 1 percent of buying souvenirs, food and beverages on every shore those ships – yet they are THE innovation drivers when trip in Europe – than day trippers who arrive individually it comes to sustainable shipping. by car, coach or train.

% Exhaust gas cleaning Modern exhaust gas after treatment systems can reduce sulphur emissions by up -99 to 99 percent, nitrogen oxide emissions by up to 75 percent and particulate emissions sulphur by up to 60 percent. TUI Cruises has one of the cleanest fleets in the world. Climate protection The TUI Group fleets are committed to the CLIA’s objective of a 40 percent carbon % footprint reduction (calculated on the basis of total carbon emissions, total ship berths and total distance travelled) measured against a 2008 fleet baseline. The shipping-40 industry, including commercial vessels, accounts for 2.2 percent of global carbon emissions. carbon intensity

Imprint Publisher: TUI Group, Karl-Wiechert-Allee 4, 30625 Hannover, www.tuigroup.com Editing: Group Corporate & External Affairs Editorial deadline: 20 January 2020 Agencies: Köster Kommunikation | GDE Kommunikation gestalten Photo credit cover: Malte Jäger 9 CRUISE NEWSLETTER February 2020 issue Three cruise lines – one group TUI Group is the world’s leading leisure travel group. It also has three cruise companies with a total of 18 cruise ships. TUI Cruises was founded in Hamburg in 2008 and is a joint venture with Royal Caribbean Cruises. Hapag-Lloyd Cruises, also based in Hamburg, is a leading provider of luxury and expedition cruises. Marella Cruises primarily focuses on the British market.

Contact

TUI Group TUI Group Bernd Hoffmann Alexander Panczuk

Head of Media Relations Head of Reputation Management Hotels & Resorts, Cruises, Destinations [email protected] [email protected] +49 (0)30 6090 2060-10 +49 (0)511 566-566 6080

TUI Group TUI Group Antonia Bouka Dr Ralf Pastleitner Head of Public Policy – Destinations Director EU/International Public Policy [email protected] [email protected] + 49 (0)30 6090 2060-61 +32 (0)2 302 9870

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