Feb 17, 2022
Although the superyacht industry is a niche market, superyacht sales in 2021 saw record level increases. This, added with the shortage of supplies, makes it extremely hard for shipyards to keep up with the demand. Could this increase in superyacht demand mess up the planet for good?
According to the Bloomberg Index, the world’s 500 richest people have seen $1 trillion in gains last year. This can be attributed to low-interest rates and bumper markets. Moreover, factors like cheap credit and the increased desire for solitary recreation allows them to buy social distance at a great environmental cost.
As environmental awareness and sustainability are on the rise, unexpectedly so are the number of people buying unsustainable massive superyachts. Recently, Jeff Bezos’ Y721 was in the centre of conversations as it was found out that, in order to arrive at the ocean, a historical bridge would have to be partly disassembled.
If we add that travelling by yacht is still one of the least ecological ways to travel, consuming around 530 gallons of marine diesel in only one hour (equivalent to six tons of carbon dioxide emissions/hour), this becomes an alarming concern.
However, we can partly blame the COVID-19 crisis for this, as more millionaires and billionaires prefer isolating from a floating fortress. The superyacht industry is booming, and the number of vessels that are under construction has hit a new record. According to Boat International’s Global Order Book, more than 1,200 superyachts are ordered and getting ready to be built. This is an increase of 25% last year.
Moreover, according to a report from the maritime data firm Vessels Value, 887 superyachts were sold in 2021, marking a 77% increase in sales from the previous year, and almost doubling it from the year before.
“The market’s never been busier, and I’ve been in the industry 20 years. A lot of people say they appreciate the safety of being on a yacht during the pandemic. But it’s also because whereas in previous eras the people with enough money were too busy in the office to justify the purchase, these days they can work from anywhere.” -Will Christie, superyacht broker
Superyachts provide freedom to work from anywhere in the world. So, what is stopping individuals who can afford it to buy them? Peter Newell, professor of International Relations at Sussex University believes this boom in superyachts vastly damages the environment:
“Whether it's private jets or trips to space, they’re just sticking two fingers up at the rest of society. It’s decadent. They’re not comfortable with the constraints that come with accepting collective responsibility for the fate of the planet.”
Richard Wilk, a professor at Indiana University claims superyachts together are only a small portion of the total greenhouse production. However, these emissions are symbolic, and adding up the total global impact of the 2,000 billionaires on the planet, it ends up being very significant.
This is because on average, billionaires have a carbon footprint that is thousands of times bigger than the average person. On average, the global footprint of CO2 is under five tons. It is estimated that Roman Abramovich, the top polluter, is responsible for about 33,859 tones of carbon emitted in 2018. Moreover, about two-thirds of this was produced by its yacht, the 162.5-metre Eclipse.
Alarmingly, it is possible these numbers would have been even higher if it wasn’t for the consequences of supply shortage. As the global supply chain crisis is disrupted and there is a worker shortage, shipyards are finding it harder to produce new vessels at the rate of the consumer demand.
New tariffs imposed by the United States government have pushed Chinese manufacturers to deviate their supply and increase exportation prices. Moreover, China has started to prioritise these materials for eolic systems in order to generate sustainable energy. This has meant that considering the cost of other raw materials, labour and shipping containers, what used to cost $2000 now costs $20,000.
If you are interested in finding out more, read this article: Why are we not building surfboards and ships?
Moreover, marinas have not adapted so fast to the increase of superyacht docking space. Australia’s richest woman, Gina Rinehart, complained from the deck of her vessel about the lack of docking space in Queensland. She believes these destinations will suffer because overseas superyacht owners will be less likely to visit.
Superyachts take years to be built, while buyers want these vessels straight away. This means there are not enough yachts available for purchase. This means that now these vessels can be considered investments.
The depreciation of superyachts is known for being steep, and in the past it tend to account for roughly 10% of the boat’s value. However, in 2021, as the demand increases and there is not enough supply, this led to values jumping from 5% to 8%.
“It’s a great time to be a yacht owner. Those who bought a year ago could potentially now sell for a profit having enjoyed a full season of free superyachting.” -Sam Tucker, Head of Superyachts at Vessels Value.
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On a positive note, although most superyachts are environmentally unsustainable, there is an increasing interest in eco-friendly renewable energy that substitutes marine diesel. Many of these new vessels will include solar panels, electric or hybrid propulsion.