Why superyacht investors should put their money on green
A green tide is rising. For evidence, look no further than next week’s Cannes Yachting Festival, where the new Green Route initiative will showcase environmental innovation.
Whilst the superyacht industry is far from a leading polluter, pressure to cut the sector’s carbon footprint is growing – not least in a bid to forestall legislation from governments to reduce carbon emissions. So, many believe it’s important that yachting invests in green technologies.
But, how much more is this green premium compared with traditional superyacht construction? “If we look at a diesel mechanical vessel versus a hybrid diesel and electric battery propulsion system, we could be looking at a price increase of 10%,” Matteo Magherini of Lateral Naval Architects tells Superyacht Investor (SYI).
Hydrogen or methanol-powered vessels are even more expensive. Magherini says there could be a 30-35% increase in price, compared with diesel-powered yachts.
Operating costs are, however, lower. “By far the biggest financial benefits are related to maintenance and refuelling costs,” Michael Kohler, CEO of solar-powered shipbuilder Silent Yachts (pictured) tells SYI. “An electric drivetrain has very few moving parts. This leads to minimal maintenance, significantly reducing the cost of ownership.
“Secondly, a solar-powered yacht can recharge itself for free, which leads to massive cost savings by almost eliminating the need to refuel.”
Magherini argues that the current ideals of what adds to the market value of a yacht should change. Until now, factors like interior design, size and top speed have been defining elements of the value of a yacht. “Top speed is an unnecessary value for superyachts. On average, yachts only spend 1% of their lives at top speed.
“Values based on things like top speed need to be changed. Instead of saying ‘my yacht is faster than yours’, we should be saying ‘my yacht is smarter than yours. It is more efficient; it uses less fuel and goes further without making a sound,’” says Magherini.
Even switching interior designs can help. Some superyacht interiors must be kept at 20 deg C to prevent decay, consuming a considerable amount of energy. Using more sustainable materials, instead of antique teak, would not only be more cost-effective but also better for the environment.
Not all buyers are prepared to pay more. Many clients enquire about sustainable elements to the yacht but revert to standard practices when faced with the price difference, said Magherini.
But investing in green technologies may be the smart solution to future-proof your investment.
Magherini points out that legislation – such as the International Convention for the Prevention of Pollution from Ships (MARPOL) – is already driving change in the form of lower carbon-emitting rules. With governments becoming more environmentally conscious and industry leaders pushing for lower carbon emissions, this could lead to changes from superyacht marinas.
“It’s a huge discussion at an EU level. If yachting hubs like Monaco say that you are only allowed to access the marina if the vessel is carbon neutral, then this will affect the values of diesel-powered yachts immensely,” says Magherini.
At the end of 2021, superyacht refit company MB92 released its sustainability report, analysing the carbon emissions and construction practices of the industry. It concurred that change must happen now before it is too late.
“Our business is pure leisure, it’s not essential, and it’s therefore expected to be as sustainable as possible,” said Pepe Garcia-Aubert, president, MB92. “Either we manage to do it or this won’t exist in 50 years time.”
The industry is by no means the biggest polluter in the maritime sector. But as the tide changes and governments implement tighter constraints on carbon emissions, it is arguably in the industry’s best interests to future-proof itself against these regulations in the long run.
“Fundamentally, we don’t have to change the core reason for having a superyacht,” says Magherini. “It is an experience, life at sea with friends, guests and lovers. It is important to keep that.” Being sustainable, quiet and leaving no trace on the world’s oceans can be part of that experience too.
Kohler agrees. “All of us want to enjoy crystal clear waters for generations to come. Therefore, it is our joint responsibility to turn this [sustainability] goal into a reality.