LeaderSHIP 2020 Review EESC, Brussels, 24 October 2017

Background of LeaderSHIP LS 2015 (2003) LS 2020 (2013) Asia financial crisis Elimination of operating aid in the EU Entry into long-term policy Strong engagement of COM college + Council Strong institutional follow-up Dramatic global market collapse loss of entire market segments Linked to DG Industry alone No institutional follow-up

Global New Orders and Deliveries LeaderSHIP 2015 LeaderSHIP 2020 New orders deliveries Datasource: IHS Fairplay Chart by VSM

Datenquelle: IHS Fairplay Darstellung: VSM

In 1H 2017, the global new orders intake slightly increased compared to the same period in 2016 (when it shrunk by 73% compared to 2015), mainly driven by strong recovery in crude tanker ordering, but it remains at a low level. At the end of June, South Korea ranked (in CGT terms) as first contractor with 73 vessels accounting 2, 69m CGT followed by Europe (1.7m CGT, 93 units), China (1.3 m CGT) and Japan (0.58 m CGT). Tankers accounted for 2.8 M CGT (38.8%), Bulk Carriers 0.58 M CGT (8.1%), containers 0.07 (1%), tankers 0.52 MCGT while Passenger ships and ONCCV accounted together for 1.77 MCGT (37%). In 2016, the decrease in new orders for cargo carriers accounted for more than 80%, while demand for passenger ships and mainly cruise ships almost doubled y-o-y.

Rest of the World Europe European Marketshare Datasource: Clarkson Chart by VSM Datenquelle: Clarkson Darstellung: VSM

Data source: IHS Fairplay

* Extrapolation based on Jan-July 2017 Datasource: Clarkson Chart by VSM

2016 was the worst in 20 years in global order intake 2016 was the worst in 20 years in global order intake. In the first half of 2017 newbuilding order intake was estimated to reach 7.2 M CGT (496 units), a slight increase compared to the same period in 2016 (7.09 M CGT, 420 units). In 1H 2017 shipyards delivered 1,250 vessels of a combined 20.4 m CGT, an 8.5% increase y-o-y. At the end of June 2017, global newbuilding orderbook amounted to 80.2 M CGT (4,743 units), which is a 10% decrease since the start of the year. Data Source: IHS Fairplay

Summary Shipbuilding Market Situation Worst damand collapse for standard shiptypes in decades Yard crisis in Asia with billions of losses and bail-out „Active“ newbuilding yards globbaly down from 931 (2008) to 372 (2016) Market interventions, bail-outs, subsidies and protectionism see dramatic increase European yards enjoy strong orderbook after cuting out-put by 50% European supply chain deeply impacted by global crisis Chinese entry into high-tech shipbuilding

LeaderSHIP Pillar Fair Market Korea - Agree Minutes, WTO case, FTA => failure China - EU-China Shipbuilding Dialogue => on-going USA – TTIP: „Jones Act is the most sacrate among all holy cows of US Trade policy“ WTO – no renewed dispute settlement attempt OCED – renewed discussion on legally binding instrument are under consideration ILO – no action Public procurement – success on EIB transport lending policy => should serve as best practise in all areas of public support Intellectual Property Rights – success on SCF, otherwise no change

In standard shiptypes, China has succeeded: low transport cost (the official Chinese Government Strategy) On 21 September 1949, Mao Zedong proclaimed the establishment of the People's Republic of China = 75th anniversary! In standard shiptypes, China has succeeded: low transport cost In high tech shipbuilding they aim at presitige + high-end technology + positive impact on naval

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