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Success Stories
EIC Survive 2024 EIC Survive&&Thrive Thrive 2024
JulyJuly 2024 2024
Story type
Wärtsilä Sailing side by side with the maritime sector as it ventures towards net zero Matteo Natali VP Marine Strategy How is Wärtsilä thriving? Wärtsilä is proactively investing in decarbonisation technology and alternative fuel solutions to help maritime players meet the net zero emission targets by 2050 set out by the International Maritime Organisation (IMO). The company’s efforts to spearhead this journey have yielded significant results. Wärtsilä is now perceived as a thought and technology leader in decarbonisation. This has led to a significantly stronger market position both in equipment sales and vessel retrofits. The challenge - In July 2023, the IMO revised its greenhouse gas emissions (GHG) strategy, outlining several key targets. This included an enhanced common ambition to reach net zero GHG emissions from international shipping by 2050, a commitment to ensure an uptake of alternative and near-zero GHG fuels by 2030, as well as indicative checkpoints for international shipping to reach net zero GHG emissions for 2030 and 2040. While 2050 might appear to be distant, it’s crucial for the shipping industry to take immediate action, as vessels ordered today will still be in operation by 2050. This represents an incredibly rapid transformation, which will have significant implications for both the newbuild and retrofit markets. Indeed, the upcoming decade will be pivotal in maritime companies making a significant change, and here, Wärtsilä is working hard to innovate, develop and enhance key supportive maritime net zero solutions. Decarbonisation can be achieved through different pathways. While short term targets can be reached through asset and operational efficiency, net zero will require a fundamental shift towards sustainable fuels. Looking at the alternative fuel uptake so far, it is clear that the transition is underway already. Currently, about half of the vessel shipbuilding orderbook is designed to operate on alternative fuels, a proportion that is anticipated to steadily grow in the future. The solution - This focus began to ramp up in 2018 after the IMO released its first greenhouse gas strategy. Wärtsilä turned the majority of its attention to furthering its position as a key industry disruptor in the decarbonisation space. Here, the company laid out an ambitious Future Fuels Roadmap, looking at how alternative
fuels such as ammonia and methanol could be deployed in the maritime industry. Further, the organisation also pursued strategies in fuel efficiency, looking at everything from energy saving devices to hybrid systems, batteries and voyage optimisation. Moreover, Wärtsilä set itself as a pioneer in onboard carbon capture and storage solutions. The ambition is to drive decarbonisation in maritime, support all decarbonisation pathways and become the preferred business partner of ship owners and operators in their decarbonisation journey. This strategy has continued to evolve over time as priorities, future fuels and efficiency preferences have changed. That hasn’t been straightforward – leading the transition through costly investments and disruption is risky. Given the vast array of sustainable fuels to select from, and the anticipated costs in 2030 being significantly higher than today’s fossil-based fuels, shipping operators are understandably unsure about the timing and methods of decarbonisation. This is amplified by the fact that the supply chains for sustainable fuels and associated bunkering infrastructure are still in their infancy. Amid such uncertainty, the inclination might be to procrastinate and postpone action until a clearer path emerges, costs decrease, and technology progresses. However, decarbonisation can only be achieved through proactive measures. Getting this right has required a combination of efforts. The firm has had to retain a strong market understanding in different markets around the world and maintaining daily contact with its customers. It has also had to establish itself as a thought leader to change the hearts and minds of its clients more effectively, which means evolving from merely being an equipment provider to becoming a strategic partner in ship operators’ journey towards decarbonisation, standing alongside them as technology consultants. Further, it has had to be proactive, moving before others to retain its disruptive edge in the market. In support of this, Wärtsilä increased the R&D spending from annual 3% to an annual 4% of net sales, as well as building its internal competence. As part of this, it has launched the Decarb Academy, with 10 e-learning modules for staff members covering everything from technology and regulations to fuel. Here, thousands of its employees have already been trained.
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Benefits ▸ Wärtsilä’s diversification strategy is proving to be successful as it has nearly doubled its market share in future fuels versus conventional fuels. ▸ 90% renewal rate across maintenance agreements.
Wärtsilä at a glance: Key products and services: global leader in innovative technologies and lifecycle solutions for the marine and energy markets. Main industries served: ▸ Energy: 50% ▸ Marine: 50% Headquarters: Helsinki, Finland Year established: 1934 Number of employees: 18,000 Revenue: £5.13bn Revenue from exports: 95% Having taken significant strides forward on all fronts in its efforts to spearhead the maritime energy transition, Wärtsilä is readily reaping the rewards. In several areas, the company’s market share in future fuels is remarkably higher versus conventional fuels. For example, while its overall share in four-stroke medium speed main engines stands at 45% as of mid-2024, it is over 70% in alternative fuels. Equally, while its market share for auxiliary engines overall is 15%, it is 25% for alternative fuels. At the same time, the organisation also leads a newly established market involving the upgrading and retrofitting of engines for more efficient and future fuels. Here, the company has seen a over 30% increase in the number of vessels it has under long term maintenance agreements between 2019 and 2023, with 30% of its engines under maintenance agreement in 2023, and a 90% renewal rate across these maintenance agreements. Such statistics are testament to the bold, proactive steps that the company has continued to take. In proactively positioning itself as a market disruptor and thought leader in new energy solutions, Wärtsilä has established itself as a leading technology partner of its clients for the future and positioned itself to capitalise on market developments moving forward.