Exploring the key sectors of the Blue Economy

The Blue Economy take place in the ocean and seas, lakes and rivers and use outputs for
consumption and as a source of economic growth in a sustainable way. The different definitions
formed a consensus about the economic sectors of the Blue Economy. Whether it makes sense to
distinguish between established and developing sectors of the Blue Economy, as the European
Union (2018: The annual economic report on EU Blue Economy 2018, Brussels.) does in its annual
report, cannot be conclusively answered yet.

The common understanding of the Blue Economy will include the following sectors:

 Fishery and Aquaculture

 Maritime Transportation, Shipping/Ports
 Coastal Tourism and Cruise Ship Industry
 Marine Biotechnology
 Seawater desalination
 Deep Sea Mining, Offshore oil/gas
  Renewable Energy
 Ship and Boatbuilding
 Maritime Construction
 Defense and Security
 Research and Education

Fishery
The fishing industry has not changed a lot in recent years. The importance of fishing for feeding
the world’s population has undoubtedly remained the same. Hundreds of millions of people depend
on fishing every day, despite the growing importance of aquaculture. For many people, it is even
the only available source of protein. In 2016 the total catch was 90.9 million tons (2011: 92.2
million tons). 79.3 million tons in the marine environment and 11.6 million tons inland.
Unfortunately, the negative effects of the fishing industry have hardly changed. The figures for
overfished or overexploited fish populations are still depressingly high. And fishing quotas have
not truly contributed to the improvement. The development of the last decade has confirmed their
largely ineffective impact on sustainable fishing. 58 percent of the fish population is fully fished,
and a third is overfished. To sum it up: 90 percent of the fish population is over- or out fished.
Sustainable fishing has a huge potential.

The lessons which we learned in recent years is as simple as easy. Give the fish time to recover.
The experience of decades of discussions showed that Marine Protected Areas (MPA) are more
efficient than fishing quotas. The future of this sector lies in a combination of larger stock and
sustainable fishing. More and more of the overfished population goes the way to be out fished.
There is the possibility that there is not enough food in the ocean for the growing world population.
Loss of economic benefits per year by roughly 83 bn USD/per year. That is a significant threat to
food security, nutrition, and health. The goals should be to achieve more sustainable catches with
low energy consumption and lower costs; to improve food security and livelihoods by restoring
over-exploited or collapsed fish stocks, applying the precautionary principle and scientifically
based fisheries management.

Aquaculture
Aquaculture is on the march. The importance of aquaculture for feeding the world’s population is
increasing, and this trend will continue. The expectation is high, and hundreds of millions of people
depend on aquaculture. For many people, it is even the only available source of protein. In 2016
the total production of aquaculture was 110.2 million tons (2009: 55.7 million tons): 80.0 million
tons of food fish and 30.1 million tons of aquatic plants. We won’t be able to feed of more than 9
billion people in 2050 without a permanent increase of production in the sector of aquaculture.
Sustainable aquaculture or mariculture has huge economical potential. Aquaculture is more
attractive and less expansive on the lower end of the food chain. Unfortunately, the negative effects
of the aquaculture have hardly changed. Medication in the form of antibiotics is often necessary
to keep the fish without infection caused by attacks in overcrowded cages during breeding in small
space. Overcrowded population getting aggressive in that condition. Pellets falling through the net
and harming the marine ecosystem in the sensitive region. The major threat to food security,
nutrition and health are the overdosing of antibiotics and the environmental pollution of the sea in
the nearer cage area. Fish can also escape, and when he does, he will not find himself in the normal
environment (like Atlantic salmon in Pacific waters). Or is without any enemy and can kill the
whole population of other fish, which happened several times in Chile. Nevertheless, Aquaculture
has a high potential for sustainable development, provided that sustainable production patterns are
respected and overfeeding and medication is avoided.

Maritime Tourism
Maritime tourism is and will be a booming sector of the Blue Economy. Maritime tourism will
grow faster and further. There are approximately 3.2 million jobs are in the maritime tourism sector
only in Europe. Coastal and maritime tourism highly depends on good environmental conditions
and on good water quality in particular. Coastal tourism covers tourism in the coastal area and
associated industries. When we talk about maritime tourism we can make an in beach-based
recreation and tourism (e.g. sunbathing), and non-beach related land-based tourism in the coastal
area. And there is also the classic water-based tourism (e.g. swimming, surfing, diving, nautical
sports, etc.). Cruising can be also considered part of coastal and maritime tourism. Cruise ship
industry grows extremely fast. In 2017, an estimated 25.8 million passengers cruised, representing
4.5% growth in 2016. Cruise travel is on the rise, with 27.2 million passengers expected to set sail
in 2018. In 2016, cruise tourism’s total economic impact on the global economy was measured at
$126 billion, an increase of 7.6% over 2015. For the first time, employment in the cruise industry
exceeded 1 million people and generated over $41 billion in income. Overall growth in the cruise
industry (64%) has exceeded that of the general global tourism sector (45%) over the past 10 years.
The expected growth in maritime tourism has implications for economic development. But there
isn’t sunshine everywhere. Many jobs in the tourism sector are only part-time jobs or seasonal.
Over-tourism is also an imminent threat. If too many people travel to the same place it is only a
question of time before the attraction will be harmed or destroyed by the people.
Maritime Transportation
Marine Transportation/Shipping industry and ports are central sectors of the Blue Economy
concept. Countries without sufficient marine construction, shipbuilding or repair, transport
capacity, and ports will have difficulties in full participation in the global economy. Up to 90
percent of global trade by volume and more than 70 percent of its value is carried by ships and
handled by ports. The industry grows slowly. In 2016 an increase of 2.6 percent (1.5 % in 2015),
with a total volume of 10.3 billion tons. This is below the average of 3 percent of the last four
decades. The forecasts for the sector are only slightly better. A lot of transport space isn’t used
because the industry is still suffering from the impact of the economic crisis in 2008/2009. Ports
are facing a growth problem. The growth rates in 2015, 2016 and 2017 were among the lowest
recorded by the industry over the 2000–2016 period. On the other hand, the expectations of the
shipping line are high. Ports are facing increasing competitive pressure. Optimization of
operations, cost reduction, time efficiency, and trade promotion objectives could help to improve
performance levels. “For the fifth year in a row, world fleet growth has been decelerating.
Nevertheless, the supply of ship-carrying capacity increased faster than demand, leading to a
continued situation of global overcapacity and downward pressure on freight rates and
earnings…The collective operating loss reported by the container-shipping market in 2016
amounted to $3.5 billion.”(UNCTAC 2017).

Another pressing issue is the massive pollution of the air and sea. The sector is a big producer of
C02. There was and is a tendency that growth will win over environmental protection. “Shipping
may seem like a clean form of transport. Carrying more than 90% of the world’s trade, ocean-
going vessels produce just 3% of its greenhouse-gas emissions. But the industry is dirtier than that
makes it sound. By burning heavy fuel oil, just 15 of the biggest ships emit more of the noxious
oxides of nitrogen and sulfur than all the world’s cars put together.” (The Economist 2017). The
main type of “bunker” oil for ships is heavy fuel oil, derived as a residue from crude oil distillation.
Crude oil contains sulfur which ends up in ship emissions. Sulfur oxides (SOx) are known to be
harmful to human health. From 1 January 2020, the limit for sulfur in fuel oil used on board ships
operating outside designated emission control areas will be reduced to 0.50% m/m (mass by mass).
The maritime transportation sector will grow and the forecast of UNCTAD is 3.2 percent for the
period 2017 – 2022. Increasing crossing border e-commerce will support greater demand for
container ships. New technology will reduce CO2 production and negative environmental impact.
The dependence from heavy oil as fuel will be reduced by using more liquid natural gas (LNG).
Other refined oil and wind (sail) will support the change of the industry. Artificial Intelligence
(AI) will play a bigger part on the bridges of the future and Blockchain technology will have a
huge impact on the whole logistics sector.

Although we saw between 2000 and 2016 68.8 billion of private investment in different ports,
there is still a place for better cooperation between the public and private sector. The UNCTAD
recommends forming alliances to reduce the overcapacity and the building of fewer ships. But the
alliances have a risk that they may lead to too much concentration in fewer hands and the danger
of the forming of oligopolistic structures. Low transport connectivity continues to make access to
smaller economies to global markets more difficult. Many Small Island Developing States (SIDS)
are among those most affected, given their access to fewer, less frequent, less reliable and more
costly transport connections.

Blue/Marine Biotechnology
The Blue Biotechnology and non-traditional living resources is a sector that continues to grow
within Europe's Blue Economy sector. They include the non-traditionally commercially exploited
groups of marine organisms and their biomass application. Macro and micro-algae, bacteria, fungi
and invertebrates are among the main marine resources used as raw materials/feedstock in the Blue
Bioeconomy. It's associated with the use of renewable aquatic biological biomass, e.g. food
additives, animal feedstuffs, pharmaceuticals, cosmetics and energy. More information on macro
and micro-algae producing facilities across Europe, can be found by navigating the interactive
maps on the European Atlas of the Seas. While the EU4Algae platform provides a space for
collaboration among European algae stakeholders.

Bio-based alternatives to traditional fossil technologies have many environmental benefits, not
least helping to decarbonize chemical processes. For example, the Circular Economy Action Plan
(CEAP) highlights the possibilities of renewable bio-based materials, such as bio-based plastics.
Algae production is a significant industry in Europe, with algae and spirulina being produced for
commercial purposes in 23 Member States. Annual sales exceeded EUR 10 million in EU countries
with the most production facilities (France, Spain and Portugal). A variety of EU policy areas
benefit from a better understanding of biomass supply, demand, prices, and impacts. In 2015, the
JRC initiated its biomass study in response to a directive from 12 European Commission services.
This study of all biomass sources (including fisheries and algae) provides data, models and
analyses of the EU and global supply, demand of biomass and its environmental, social and
economic sustainability. In 2017, the JRC launched the European Commission's Knowledge
Centre for Bioeconomy (KCB), which brings together the knowledge and expertise needed to
analyze the effect of the bioeconomy, both from inside the JRC and from outside sources. Built in
response to the increasing complexity of the policy challenges and expanding volume of data and
information on the bioeconomy, the KCB helps map, examine, analyze, and condense the best
available knowledge to inform of EU policies.

Cellular mariculture - an emerging technology defined as the production of marine products from
cell cultures rather than from whole plants or animals - is attracting growing interest due to its
potential to address public health, environmental and animal welfare challenges. Producing
seafood from fish cells and tissue cultures represents an emerging approach whereby industrial
aquaculture and marine capture systems can be used to address resource supply challenges.

Desalination
Desalination is a rapidly growing sector of the Blue Economy, with over 2 300 seawater
desalination units in the EU, out of over 18 000 worldwide. The Mediterranean is home to most of
them. As a result, the EU generates around 9.2 million cubic meters of desalinated water every day
(10% of global capacity).

Despite this, a quarter of the world's population lives in countries with chronic water scarcity and
it's predicted that many regions in the EU will face severe water scarcity by 2050 when water
demand is expected to increase by up to 30%. As a result, 3.5 billion people will be at risk of water
scarcity by 2025, and the global water deficit is estimated to reach 40% by 2030. However, more
freshwater can be made available for domestic, industrial, and agricultural use through the
desalination of seawater. Desalination technology is currently being used to alleviate water
shortages in regions with limited freshwater resources, such as large coastal cities, islands, and
offshore industrial sites where seawater cannot be used due to its high salinity.

Desalination capacity in Europe has grown significantly in recent decades. However, between
2000 and 2009, Europe's desalination capacity increased to 4.58 million m3/day, with a total
investment of EUR 4 billion in engineering, procurement, and construction. Between 2010 and
2019, just 0.84 million m3/day of new capacity was added, at an investment of EUR 630 million.
Most additional capacity constructed since 2010 has been in small and medium-sized plants.
Around 65% of the EU's operational plants are located on or near the coast. Inland plants are also
used to produce drinking water and industrial water through a saline/brackish water purification
process. In the long run, desalination and other water management options (such as water reuse)
are predicted to lessen the impact of climate change on freshwater supply.

The COVID-19 pandemic has hampered the sector’s growth, and manufacturing delays have led
to temporary interruptions in a number of construction sites. Production activity has partly resumed
in 2021, but the industry is expected to experience a sluggish growth in the near future. With
desalination plants having a lifespan of 20 to 25 years, it is projected that further expenditures
would be required in the coming years to modernize or replace obsolete facilities. However, the
limited capacity commissioned in Europe over the last decade (2010-2019) demonstrates that this
sector of the EU Blue Economy has grown at a slower rate within the EU than it has outside the
EU. Meanwhile, the Middle East, North Africa, East Asia, the Pacific, and North America have
combined global desalination capacity of 78% global capacity.

According to DesalData, Spain has 65% of the EU's desalination capacity and 5.7% of global
desalination capacity, with the rest concentrated in Italy (7.5%), France (3.5%), Cyprus (3.4%),
Malta (2.9%), and Greece (2.9%). Desalination plants in Northern European nations such as
Germany (4%), the Netherlands (3.8%), Belgium (1.9%), and Ireland (1.1%) are primarily used
for the production of drinking water and industrial water. Most of the large plants established
between 2000 and 2010 served coastal cities in Spain. Most of the EU's desalination capacity (63%,
5.7 million m3/day) is devoted to the generation of water for municipal public water supplies. Only
3% of the desalination capacity is used to produce drinking water for tourism facilities. The
remaining desalination capacity (23%) is used for industrial purposes and irrigation (12%).
Deep-sea Mining
Deep-sea mining is the process of extracting and often excavating mineral deposits from the deep
seabed. The deep seabed is the seabed at ocean depths greater than 200m, and covers about two-
thirds of the total seafloor. Research suggests deep-sea mining could severely harm marine
biodiversity and ecosystems, but we still lack the knowledge and means to implement protections.
Despite this, there is growing interest in the mineral deposits of the seabed. This is said to be due
to depleting terrestrial deposits of metals such as copper, nickel, aluminum, manganese, zinc,
lithium and cobalt. Demand for these metals is also increasing to produce technologies like
smartphones, wind turbines, solar panels and batteries.
As the deep sea remains understudied and poorly understood, there are many gaps in our
understanding of its biodiversity and ecosystems. This makes it difficult to assess the potential
impacts of deep-sea mining or to put in place adequate safeguards to protect the marine
environment, and the three billion people whose livelihoods depend on marine and coastal
biodiversity. The seafloor contains an extensive array of geological features. These include abyssal
plains 3,500–6,500m below the sea surface, volcanic underwater mountains known as seamounts,
hydrothermal vents with bursting water heated by volcanic activity, and deep trenches such as the
Mariana Trench. These remote places support species that are uniquely adapted to harsh
conditions, such as lack of sunlight and high pressure. Experts predict that many of these species
are unknown to science.

Renewable Energy
Marine Renewable Energy (MRE) - is a major source of green energy that may be generated from
offshore wind farms and other ocean energy technologies. It significantly contributes to the EU’s
2050 Energy Strategy. By 2030, the EU Offshore Renewable Energy Strategy aims to have at least
60 GW of offshore wind and 1 GW of ocean energy built. In addition, as part of the European
Green Deal, plans are underway to deploy 300 GW of offshore wind energy by 2050, accounting
for around 30% of future EU electricity, with an intermediate objective of reaching 60 GW by
2030. The aim is to ensure that offshore wind energy plays a crucial role in achieving Europe's
carbon-neutral goals. So, there is great potential for the Marine Renewable Energy sector to
sustainably generate economic growth and jobs, enhance energy security and boost industry
competitiveness through technological innovation.
Starting as a first mover in the offshore sector, with the first offshore wind farm installed in
Denmark in 1991, the EU is a global leader in offshore wind manufacturing. As a result, the EU
offshore wind energy sector has grown to a cumulative installed capacity of 17.5 GW by the end
of 2022, with an increase of 1.2 GW in the last year. The main EU producers of offshore wind
energy are Germany, the Netherlands, Belgium, and Denmark. Many innovative ocean energy
technologies are currently being developed and tested to exploit the vast source of clean, renewable
energy that the seas and oceans offer. Although still in the research and development stage and not
yet widely commercially available, promising ocean technologies includes: wave energy, tidal
energy, salinity gradient energy and ocean thermal energy conversion (OTEC). Wave and tidal
energy are currently the more mature of these innovative technologies. The wind energy sector has
seen a significant increase in offshore wind technologies over the past decade, owing to higher
capacity factors, much larger site availability, and cost reductions, all of which have benefited
from significant technological advancements, such as wind turbine reliability.

Within the EU, the largest additions for 2022 were in France (0.5GW), the Netherlands (0.4GW)
and Germany (0.3 GW). Globally, China is leading the sector in terms of deployments and has
expanded its position as the world’s largest offshore wind market with 27 GW of cumulative
installed capacity, more than the UK (14GW), Germany (8 GW) and the Netherlands (4 GW)
combined. The European manufacturing supply chain is built mainly on companies from EU
Member States. The EU's current manufacturing capabilities cover the demand for major wind
energy components. Several European developers are developing floating offshore wind turbines,
with the first pilot projects on the way and deployment likely to pick up by the end of the decade.
The strategy tackles both the definition of energy production components and broader challenges.

Marine living resources

The industry encompasses the harvesting of renewable biological resources (primary sector), their
conversion into food, feed, bio‐based products and bio-energy (processing) and their distribution
along the supply chain. The Marine living resources sector comprises three sub-sectors:

Primary sector: capture fisheries (small-scale coastal, large-scale and industrial fleets) and
aquaculture (marine, freshwater and shellfish);

Processing of fish products: processing and preservation of fish, crustaceans and mollusks; meal
preparation, manufacture of oils and fats and other food products;

Distribution of fish products: retail sale of fish, crustaceans and mollusks in specialized stores and
wholesale outlets.

Marine non-living resources

The sector of Marine non-living resources is crucial to the Blue Economy. For many years, the
industry has played a critical role in ensuring that the European economy has access to energy and
raw materials. However fora decade, the mature offshore oil and gas sector has been in decline, in
line with the net-zero emission targets and decarburization objectives of the EU. Nonetheless, it is
expected that oceanographic research, the exploration of ocean resources, the exploitation of
sources of energy and the extraction of raw materials from Europe’s seas and oceans will play a
crucial role in the transition to a sustainable Blue Economy, particularly in terms of enabling the
development and large-scale deployment of low-carbon technologies.
The extraction of oil and gas and other minerals (including gravel, sandpits, clays, kaolin, and salt),
and their support activities, are all part of the Marine non-living resources industry. Offshore
production in the North Sea is mainly driven by Denmark, the Netherlands, Germany and Ireland.
Due to declining production levels, rising production costs, and the European Green Deal's drive
toward renewable energy, the mature offshore gas and oil sector has suffered a downturn in recent
years.

At the same time, the prices of other minerals are rising. The transition to a sustainable Blue
Economy depends on the supply of the raw materials needed to develop the low-carbon
technologies, which in turn will help reduce the impact on the marine environment, and mitigate
climate change. Rather than mining, Europe's activity is mainly focused on exploiting marine
aggregates. More than 50 million m3 of marine aggregates, chiefly sand and gravel, are collected
from the European marine seabed each year, primarily for use in the building sector, beach filling,
and sea defense work (i.e., to safeguard dunes, beaches, coastal areas and islands). The
Netherlands, Denmark, France, and Belgium were the top EU aggregate extractor countries in
2018.
Infrastructure and Robotics

The Maritime sector has been transformed by digitalization and technological innovation in
practically every area, from underwater drones to airborne equipment. As a result, several ocean-
related infrastructure and robotics projects in the works could potentially have a significant
influence in the future.
Technological progress is accelerating in four areas:

Ocean sensing and imaging instruments (using artificial intelligence and machine-to-machine
communication);
Expansion of spatial coverage of float arrays and fixed observation platforms;
Increasing autonomy in mobile platforms;
New complex systems integration schemes.

Another area that is becoming increasingly active in the Blue Economy is the use of maritime
robots. For example, underwater robots are used for different maritime environments, such as
scientific research, exploration of oil and gas, and border surveillance.
Underwater systems are among the most valuable sectors within the robotics market, particularly
in defense and military surveillance operations. They also enable ocean or underwater exploration
in challenging environmental situations. Technological advancement in the field of sensors and in
state-of-the-art robotic technology will contribute to the growth of the Autonomous Underwater
Vehicle (AUV) market. However, marine robotics has been slow to gain traction due to the
expense of R&D, the intricacy of underwater activities (such as communication), and navigation,
and technological limitations.

However, commercial exploration has the highest use. Many countries are currently looking for
alternate oil and gas supplies to meet their needs. This has prompted them to investigate the water
bodies in their area. As a result, the market for underwater robotics is being driven by the desire
to explore. Submarine cable networks are essential infrastructure that ensures data,
telecommunications, and power transmission which brings together government agencies and
business companies involved in the submarine cable industry, is a platform where various parties
can exchange technical, environmental, and legal information to improve submarine cable
security.

Shipbuilding and repair

EU shipbuilding is a dynamic and essential competitive industry, both commercially and socially.
It counts approximately 300 shipyards where civilian and naval ships as well as platforms and
other hardware for maritime applications, are crafted. In 2021, around 2.7% of global ships were
built in the EU, up from 2.3% in 2020. Other sectors, such as transportation, security, energy,
research, and the environment, are all involved in shipbuilding. Shipbuilding is a major and critical
business in many EU countries, and is vital to regional industrial infrastructure and national
security.

The EU is the top producer of cruise ships in the world and one of the leading players in high-tech,
complex vessel types. Overall, the EU industry received fewer shipbuilding orders than China,
South Korea and Japan in 2021. Due to continuous investments in research and innovation, the EU
is also the largest supplier of marine equipment, such as diesel engines, turbines, propellers, and
blades, followed by Korea, China, and Japan. Only in the marine diesel engine market, did the EU
reach EUR 11.7 billion net exports between 2019 and 2020.
The shipbuilding and repair sector includes the following sub-sectors and activities:

Shipbuilding: building of floating structures; building of pleasure and sporting boats; repair and
maintenance of ships and boats;

Equipment and machinery: manufacture of cordage, rope, twine and netting; manufacture of
textiles other than apparel; manufacture of sport goods; manufacture of engines and turbines, and
manufacture of instruments for measuring, testing, and navigation.

Research and innovation

Research and Innovation (R&I) is regarded as a central driver for fostering a sustainable Blue
Economy, fulfilling the goals laid out in the European Green Deal, and recovering after the
COVID-19 crisis. R&I is ideally placed to steer the direction, address synergies and trade-offs,
and leverage the full range of EU instruments, consequently enabling the twin green and digital
transitions. A research and innovation agenda that is forward-looking, mission-oriented, and
impact-focused leads to long-term Blue Economic development. Science and evidence-based
policymaking are encouraged by R&I, which leads to successful measures. Furthermore, quality-
controlled and harmonized marine data and observation from diverse disciplines and human
activities are crucial for the Blue Economy's long-term development. It enhances the understanding
of marine ecosystems and their (cumulative) consequences.