Europe's largest port expects slight recovery in 2024

Europe's largest port is in discussions with companies, including some from the Middle East, to boost imports of hydrogen derivatives

An LNG tanker ship at the port of Rotterdam, the Netherlands. EPA

The Port of Rotterdam, Europe’s largest, expects a “small” recovery in cargo volumes this year, following a decline in 2023, as global inflation levels continue to ease, according to its chief executive.

“This year, you will see a small recovery because inflation has reduced to acceptable levels,” Boudewijn Siemons told The National on the sidelines of the World Energy Congress this week.

“Unless some black swan event happens … we expect a slight recovery this year but not a huge one, but an incremental one.”

Last year's total cargo throughput at Rotterdam ended at 438.8 million tonnes, a drop of 6.1 per cent compared to 2022.

In the first quarter of 2024, total throughput at the port dipped by 1.4 per cent to 110.1 million tonnes compared with the same period a year earlier.

Mr Siemons also said he was not concerned about the disruption in the Red Sea or a potential escalation in the Middle East impacting global trade.

“I'm concerned about it on a humanitarian basis, but logistically, with ships going around the Cape of Good Hope, we can manage those disturbances … [the] supply chain can digest it,” he said.

Several major energy companies and shipping lines have rerouted their vessels around South Africa’s Cape of Good Hope to avoid the threat of attacks by Yemen’s Houthi militant group in the Red Sea, a vital trade artery.

Mr Siemons’ remarks come as inflation, which had spiked at the start of the Russia-Ukraine war in February 2022, is forecast to drop this year due to lower energy prices and reduced inflation in consumer goods and food.

Global headline inflation is forecast to fall to 5.9 per cent this year after 2023's 6.8 per cent average, according to the International Monetary Fund.

“The global economy has been depressed for two years … we're simply a mirror to the global economy,” Mr Siemons said.

Hydrogen hub

The Rotterdam port, the 10th largest in the world, operates and develops the port and an industrial cluster.

The port is key to the Netherlands’ plan to be an importer and transit port for hydrogen within Europe.

Rotterdam aims to supply 4.6 million tonnes per year of hydrogen to Europe by 2030 from local production and imports.

“Rotterdam now provides 13 per cent of Europe's energy need … and that's our role in the fossil [fuel] world. We want to maintain that role in the renewable energy world,” Mr Siemons said.

“That means that we have to actually make sure that everything that happens here is aimed at making that transition and securing that position,” he added.

This year, Spain's Cepsa signed an agreement with three Dutch companies to supply green ammonia to a terminal in the port of Rotterdam.

Green ammonia, derived from hydrogen generated through renewable energy sources, can in turn contribute to the transport of green hydrogen, offering a solution for decarbonising various industries.

The Middle East and North Africa are also among the regions from which Rotterdam is looking to receive its hydrogen shipments.

The port is in discussions with several companies to facilitate imports of hydrogen derivatives, Mr Siemons said, without disclosing their names.

“First investments have already been announced to increase the ammonia imports and we are talking to more companies about that possibility, including companies that are active in the Middle East,” he added.

Despite hydrogen’s growing potential, critics within the energy industry have underlined its high cost of production and the absence of a well-established market.

Currently, almost most all hydrogen produced worldwide is “grey”, which means it is produced from natural gas.

Mr Siemons said there are several subsidies and schemes in the EU to support the switch from grey hydrogen to green hydrogen, adding that hydrogen produced from clean energy already has a significant market in north-west Europe.

He also emphasised the need to add more blue hydrogen into the mix, as the scaling up of green hydrogen production is expected to take time.

Blue hydrogen is produced from natural gas, but the carbon-dioxide produced during the process is captured and stored.

“If you really want to speed up the hydrogen economy, you're going to need more sources than only green because that's going to take some time,” Mr Siemons said.

“I believe that we need to be practical about it. The aim is to get carbon-dioxide out of the air and blue hydrogen does the job.”