Greek Ferries Need to Go Green, Says XRTC Study

With 41 percent of passenger ferries currently operating along Greece’s coasts expected to be over 40 years old by 2035, their replacement will be one of the greatest challenges for coastal shipping companies, according to a new study by XRTC Business Consultants.

The study, titled “The Green Journey Has Begun”, concludes that these companies will need to build new ships, as there are no available used vessels that meet modern environmental protection standards.

Funding and fuel technology challenges for coastal shipping

The industry faces many challenges, with two of the most pressing being: a) how to finance the construction of new ferries, and b) which type(s) of fuel will be chosen.

Moreover, the new ships intended for Greek islands must be designed to align with the infrastructure of regional ports. However, sustainable alternatives to traditional fuels are still in the early stages and have yet to prove their long-term viability.

With the European Union setting deadlines for the reduction of carbon emissions, alternative fuels such as electricity, biofuels, ammonia, hydrogen, or methanol have yet to be widely and safely adopted.

Major players have plans in motion

Greece’s leading coastal shipping companies, such as Attica Group and Minoan Lines (a subsidiary of the Grimaldi Group), have significant plans underway. Attica has signed an agreement with Stena RoRo for the long-term charter of two 200-meter ships, which are to be built in China. Additionally, the company has signed a Memorandum of Cooperation with ONEX for the potential construction of new vessels and is planning to replace three high-speed Aero ships with two new ones.

Grimaldi Group is advancing its shipbuilding program, with Minoan Lines set to operate two of the newly constructed vessels.

However, smaller companies are encountering difficulties, as banks are hesitant to extend loans, and some of these companies are also struggling with management challenges.

Greek government steps in

The Greek Minister of Maritime Affairs and Insular Policy recently announced new measures to support the country’s coastal shipping companies:

– The renewal of their fleets with new, environmentally friendly ships through a public-private partnership, with a budget of 360 million euros.
– Coastal shipping companies will gain access to funding from the Recovery and Resilience Fund.
– In collaboration with the Greek Ministry of Environment, Greek ports will undergo “green” upgrades, including the adoption of new technologies, with a focus on supplying electricity to docking ships, a process known as “cold ironing”.

Sulfur regulations loom

Beginning May 1, 2025, the EU regulation limiting fuel sulfur content to a maximum of 1 percent will come into effect. This regulation is expected to force many coastal shipping companies that do not have scrubbers installed on their ferries to purchase fuel at prices 35 percent higher than current levels.

Rising costs of island hopping

The Greek Ministry of Maritime Affairs and Insular Policy recently said that ferry ticket prices in Greece are stable this summer compared to the previous year. In fact, passenger ferry prices are said to have decreased by 1.61 percent in the first half of 2024 compared to the same period in 2023. However, there have been some price increases for high-speed ferries and inter-island transportation, although not for routes from the mainland.

According to the XRTC study, this increase is largely due to the fact that most tourists now arrive directly on the Greek islands via international flights, rather than sailing from mainland ports. This higher demand for inter-island travel has led to increased ticket prices for island hopping.