Rotterdam port boss warns that high energy costs could drive business away

By Diederik Baazil (Bloomberg) —

Port of Rotterdam CEO Allard Castelein has expressed concern that high energy costs caused by Russia’s war in Ukraine could drive off energy-intensive companies operating at Europe’s largest maritime trade gateway.

“We are most concerned about energy supplies and prices,” Castelein said in an interview at his office at the World Port Center on Thursday. “In our port there are companies that run on gas and have not been able to compete on the world market. That is a big challenge for us.”

The port released figures showing it handled a total of 467 million tonnes of cargo in 2022, down 0.3% from the previous year.

Despite the overall stability of volumes, the underlying numbers show “huge changes in volume flows,” Castelein said.

Container throughput fell 5.5%, measured in 20-foot units, as shipments to Russia halted, while coal imports rose 18% as more German coal power was harnessed. LNG imports, mainly from the US, increased by 64%.

Last year thousands of containers with connections to Russia piled up in the port because international sanctions against Moscow. This problem is “non-existent,” Castelein said, as “just a couple of containers weren’t picked up.”

For 2023 he only expects a “small decline” in volumes. Still, the sweeping conflict in Eastern Europe combined with the green energy stimulus in the US Inflation Reduction Act could exacerbate disruptions in Rotterdam by forcing chemical companies out of ports, he warns.

“If we don’t have enough affordable energy, we have a problem,” he said, adding that energy costs in Europe are eight times higher than in the US.

“Companies could say that the investment climate in Rotterdam, the Netherlands and Northern Europe is not attractive enough and they could decide to leave the company,” Castelein said. That is one of the biggest challenges for the next few years.”

© 2023 Bloomberg LP

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