Interview: René Kohlman, Secretary General, IADC

To start, please give a ‘state of the dredging industry’ using the metrics of your choice.

There is only one common metric and that's turnover. In that regard, the global dredging industry is stable at around €5 billion per year. [Note: IADC publishes annual global turnover figures on the open market. It excludes the two large closed markets, China and the U.S.]. That’s €5 billion for ‘blue water’ dredging, not including inland waterway dredging.

What are the drivers for the dredging business today?

The major drivers are world commerce and trade. You have capital dredging and maintenance dredging, with maintenance dredging fairly stable at around €1 billion per year. Other drivers include energy, an industry which is of course suffering at the moment. While offshore oil and gas is down, it’s certainly not out. I think we all know that we still need fossil fuels, so I expect that the market will pick up again. In addition, you have drivers such as coastal protection, tourism, and urban development.

Can you quantify the growth you’ve seen in the dredging market during your tenure at IADC?

Yes. IADC members have invested heavily in new equipment. When I started in 2008, the equipment of the ‘Big Four’ was around €4 billion insured hull value. Today it’s more than €11 billion, so it’s nearly tripled in 12 years. That’s just the equipment of the four big companies, but smaller IADC member companies are important too, and they also invest in modern equipment.

Unfortunately you can't have a business discussion today without discussing COVID-19. Can you discuss the pandemic’s impact on the dredging industry over the last 12 months?

When COVID-19 started a year ago, many projects were put on hold. In the course of 2020 however, it has not been as bad as expected. The operator’s major problem was, and still is, crew changes. On a vessel, you live in a bubble, so there is no problem once you are onboard and working. But there are many logistical hurdles to getting onboard, from testing before a crew member flies, to testing once they arrive in a country, to varying quarantine regulations by country. Then, once they get to the vessel and before they board, they are tested again.

COVID-19 aside, when you look at the world, where do you see opportunities either by geographic region or market niche?

Africa is interesting because the population is booming so trade will grow and as I said previously, trade is one of the major drivers of the dredging industry. We’re also starting to see a diversification of the dredging companies themselves, particularly the larger ones, diversifying to the offshore wind farm industry for the shallow water offshore work, including cable laying and rock laying. There is also strong potential in the Far East – Manilla and Indonesia for example – where you see large and complex projects being realized.

What do you see as the challenge in these, and other growth markets outside of Europe?

In a word, ‘sustainability’. I doubt if sustainability issues are treated the same in developing countries as they are in Western Europe. And even in Western Europe sustainability doesn’t get the position and attention it warrants. For example, in a recent tender a Chinese company submitted the lowest price, however elements of sustainability did not meet the tender criteria. They were simply forgotten and yet the contract was awarded. We are working to make sustainability a necessary condition within tenders. So, for example, if you want to have a project financed via the World Bank, there should be sustainability stipulations to organize the financing. That way, together with the creativity of reputable dredging contractors, you realize a project that’s beneficial for society.

What is the IADC's role in helping to level that playing field?

We published the book Dredging for Sustainable Infrastructure. For real sustainable projects, you have to include externalities. You have to consider all the impacts of a project, both positive and negative, to properly gauge a project and its value. If you make a port extension but you ruin fishing grounds, that has a negative impact. On the other hand, if within a project you create additional recreational areas, or build a new waterfront, you create positive externalities with value for society. If you want to really be ‘sustainable,’ then you have to include all these externalities.

Together with CEDA, we’re working on a report of sustainable marine infrastructure projects financed with green funds. With this report, due to be published in Q2, we want to reach out to the financial world. Swiss Re, the world's largest reinsurer, is a participant in the report and is extremely active with regard to research concerning sustainability.

Ultimately, the aim is to reach out to the financial world and make them aware that there are many sustainable marine infrastructure projects that can be financed with green funds. It’s about awareness. It’s about delivering sustainability before, during and after a project. In a nutshell, it’s about factoring in all the positive and the negative impacts of a particular project.

When talk turns to sustainability, invariably it turns to ship technology, too. What do you see as the challenges ahead for your membership in this regard?

We’re starting to see operators ordering new vessels with emission reduction technologies and fuels, and that’s extremely important. But you also have to look at your own way of working so that when you intervene in the environment, you do so sustainably. In the Netherlands, there’s an organization called EcoShape, founded as an initiative of the dredging companies as the result of project cancellations due to environmental restrictions. In several cases, the environmental restrictions were based more on ‘gut feeling’ rather than data and knowledge. EcoShape was therefore created to collect knowledge, to learn and to share that knowledge.

Let me give you an example. Twelve years ago, dredging around coral reefs was deemed problematic because everybody thought if you dredge around the coral reef, you cover it with sand and the coral reefs die. Today however, we know that by using technology and new techniques, you can limit turbidity and while the coral reef might partially be covered, it will not die, it will recover. So based on knowledge, you are able to develop new technologies and new ways of working.

Something that’s really interesting is the use of nature-based solutions, making use of the forces of mother nature to realize projects. A good example of this is the Sand Engine, a beach replenishment project along the Delfland coast, here in the Netherlands.”

We’ve covered quite a bit of ground. To sum it up, can you point to an interesting project that displays creativity in dredging with a nod to sustainability?

Something that’s really interesting is the use of nature-based solutions, making use of the forces of mother nature to realize projects. A good example of this is the Sand Engine, a beach replenishment project along the Delfland coast, here in the Netherlands. Normally, we have to replenish the beaches every five years with 2-5 million m3 of sand. The project was created with the aim to make use of the forces of nature, and it’s expected that the sand engine will make replenishment unnecessary for the next 20 years. To accomplish this, 20 million cubic meters of sand was deposited, creating a hook-shaped peninsula, allowing nature’s forces, such as the wind, waves and tides, to carry the sand and spread it along the coast over a period of years. This example, along with a number of projects featured on the EcoShape website, illustrates how building with nature dramatically extends the period between beach replenishment and why finding nature-based solutions is so important.