Innovation Diaries: Dealing with an Uncertain Future
In the midst of these crazy times, most industries still haven’t gotten their shit together. However, a few bright minds managed to understand the paradigm shift, act accordingly and reap the rewards. So, Bente Zerrahn and I talked to some of them! Join us on our learning journey over the next few weeks to see how completely unrelated industries deal very differently with the same challenges we all share – and let’s become better together!
Dr. Thomas Koniordos is the CEO of Yara Marine, “sailing his ship through rough seas” by enabling a turnaround of the company in the context of drastically changing market conditions: As 2022 draws to a close, shipping has just emerged from a pandemic while seeing increased geopolitical instability, labor and resource shortages, rising fuel prices, and a global financial downturn. Before joining Yara in 2015, he dedicated himself already to environmental solutions at Danfoss. His mission is to build a technology company, that enables a “greener” maritime industry.
The Norwegian company Yara Marine Technologies was founded in 2010 as a subsidiary of Yara International. Their goal is to reduce maritime emissions in collaboration with ship-owners, yards, and naval architects. They’ve built a portfolio of green technologies such as exhaust gas scrubbers, vessel optimization solutions, and wind-assisted propulsion systems.
Tom, what is innovation to you at Yara Marine? How do you define it and what role does it play in your daily business?
One of our core values at Yara Marine Technologies is curiosity, and it is the heart of our approach to innovation. Curiosity drives us to build knowledge, provide relevant solutions, and continuously improve by asking questions and challenging ourselves. This is key to innovating and developing our portfolio of green technologies as it requires us to think about where we are at this moment, and where we could be in the future – building a better world for us all.
And curiosity is always at the heart of change because you have to be curious to drive change and adapt rapidly.
This is what has allowed us to remain competitive in the promptly evolving maritime industry. It’s allowed us to keep pace as shipping and its regulatory bodies have shifted to prioritize more environmentally conscious operations and decarbonization.
However, innovation by itself is not enough – simply having a solution means nothing if it cannot be effectively implemented. This requires foresight, project planning, testing, and the flexibility to set goals for greener operations and evolve them over time.
In shipping, meeting market needs requires an understanding of how the industry works and what will be most cost and time effective. As good as a piece of technology may be, if it does not meet the operating needs of the industry, it will fail. Bringing in the knowledge of maritime operations, as well as industrialization, allows us to transform projects that might otherwise be gatekept by availability or lack of planning.
This process at Yara Marine has taken the form of acquisition (such as with Lean Marine in 2021) and via commercial collaboration (such as BAR Technologies in 2020). These affiliations exist alongside our own internal research and development processes where we continually improve our offerings and advance the market. We have also revisited technology like shore power, while additionally conceiving of and testing out possible future innovations.
So, innovation is just one part of the whole, and this is the ethos with which we approach our customers and stakeholders: a reassurance that we have not only the technology they need but also a plan and willingness to collaborate on seeking the most-effective means to achieve cleaner operations.
During recent years your business has been impacted significantly – pandemic, delivery bottlenecks, economic downturns… How did you react and how did the way you work change?
Flexibility has been vital to our approach as industry goals are evolving rapidly. During 2018 and early 2020, ship operators prioritized compliance with the IMO 2020 Sulphur cap, and we delivered and installed hundreds of systems during this extremely busy period. However, following the pandemic in 2020, the installations onboard were significantly impacted. This was reflected not only in the challenge of meeting our existing orders under lockdown but also in the industry choosing to take a step back from scrubbers to reassess financial and operational priorities.
While this may not have been ideal, it offered Yara Marine an opportunity to take stock of where we were and reflect on how we could evolve in line with our future goals. Once we established that our key ambition was to ensure we offered cost-effective green technologies to support more sustainable operations while remaining compliant with environmental regulations, it was easy to see how neatly this aligned with the evolving market and customer demands.
A key part of this assessment was the understanding that the road to greener operations is not a single step. There is no way to renew the entire global sailing fleet overnight in a sustainable manner, and drastically shortening the lifespan of our existing fleet would offer no benefits; in fact, I would argue that it would act against sustainability. The effects of the pandemic also meant that operators would need to carefully evaluate financial investments, particularly as we began to enter a global recession.
It was evident from the outset that we needed solutions that ranged from future fuels and technologies to reducing carbon emissions from our existing fleet.
As a result, we offer vessel solutions not only that meet regulatory requirements and efficiency, but also more advanced alternatives that we think will be key for a successful transition to a lower-carbon future in shipping. These include wind-assisted propulsion, vessel efficiency technologies, and shore power.
And more specifically: What role do digital tools and approaches play?
The requirements for reporting vessel information set a precedent for data gathering in the industry initially and have been accelerating digitalization to enable improved operational performance. Operators with data on vessel fuel consumption, weather, operational performance and more have baselines that can be used to define benchmarks and assess operational conditions, defining how to improve over time.
At Yara Marine, we are working towards further enhancing and enabling this process.
Our propulsion optimization system FuelOpt is the basis of our digital platform, which automatically reduces fuel consumption and gathers data from onboard systems or sensors at the same time. This collected data is visualized in Fleet Analytics, our performance management, and reporting software, where users can analyze the vessel performance, compare the performance of different vessels in the same fleet, and more. The two allow operators to immediately improve a vessel’s operational efficiency.
FuelOpt also makes clear our baseline approach – regardless of the fuel used, minimizing the consumption by optimizing the efficiency of the propulsion line. This ensures lowered emissions, great cost efficiency, and true long-term sustainability.
And a vessel’s operational efficiency can be improved year-on-year by learning from the actionable data visualized in Fleet Analytics and adapting more efficient operations. And our goal is to expand the use of Fleet Analytics to collect the data from the rest of our portfolio to create more exhaustive data sets and models.
Recently we have also launched Route Pilot AI, an AI-powered ship operation support system that uses data gathered from a specific vessel to create a digital twin model of the ship. With this digital twin, we can calculate the most energy-efficient behavior of a vessel during an upcoming voyage using the predicted sea conditions such as weather, waves, and current.
The ocean and its ecosystems often are at the core of our conversations around climate change – damaged coral reefs, garbage floating in the water, overfishing… Yara Marine Technologies has set out to enable a greener maritime industry. What exactly are you working on?
Climate change is an urgent crisis, and our immediate priority is to provide as many market-ready systems as possible to minimize further damage. This may take the form of FuelOpt’s maximized use of every drop of fuel, WindWings’ clear reduction in emissions, shore power’s reduction in emissions, particles, and noise at port affecting communities as well as marine life, or our role as one of the world’s largest suppliers of SOx scrubbers, ensuring that we continue to remove harmful sulfur emissions from vessel exhaust streams.
Each of these solutions is intended to offer viable means by which we advance environmental consciousness in our industry. And the results speak for themselves: for instance, FuelOpt has shown evidence of being able to reduce emissions related to burned fuel by up to 15%. Fleet Analytics can provide vessels with indirect fuel and emissions reductions of up to 10%. WindWings can save up to 1.5 Tonnes of fuel per day per wing.
Our diverse portfolio is an indicator of our commitment to a healthy planet for future generations.
Yara Marine effectively conveys a sense of urgency for the decarbonization of the maritime industry. How does this attitude influence internal innovation and external customers and partners?
Acknowledgment of the climate crisis can only be a starting point for shipping; what we need is immediate and concrete action. We’ve emphasized this with our wide variety of products and in our external messaging.
We began by launching a distress signal hashtagSaveOurPlanet– using the morse code ‘SOP’ to hearken to seafaring’s roots – to highlight our concerns about the climate crisis and urge the maritime industry to action in autumn of 2021. Although there are conscientious actors leading through bold action, the needle is unlikely to move significantly until the majority is a part of the process. This means that we need to work to assess the ongoing issues mid-size and smaller operators are experiencing as well. Ensuring that our range of solutions meets the needs of all consumers is therefore a particular priority for us.
We followed this up a year later with a campaign titled ‘The Time to Act is Now’ addressing the fact that much of the industry appears to be in abeyance, awaiting either a clear lead for a future fuel or a single technology to decarbonize. However, this process of awaiting solutions is flawed: our decarbonization needs cannot be resolved by a single act or upgrade. The conditions are worsening as we await longer. Therefore, we felt it was important to emphasize the process of change and the ongoing reasonable steps to make a real difference and advance urgently needed climate action.
Our campaigns reflect our company culture. We do want to build a better world for future generations, and saving the planet is key to this endeavor. We believe that addressing climate change is going to address the needs of everyone across the globe, including our workforce, therefore personal and professional goals are often aligned.
Regarding customers and collaborators, we have longstanding relationships with Ardmore, Algoma, Stolt Tankers, and many more to use FuelOpt to reduce their fleet emissions and enhance fuel efficiency. WindWings will be installed onboard the Mitsubishi Corporation’s Pyxis Ocean, 80,962 deadweight tons (DWT) and 299- meter-long bulk carrier, in collaboration with its charterer Cargill. A second commercial installation of WindWings will be onboard one of the world’s leading independent dry bulk owners, Berge Bulk’s 210,000 dwt bulk carrier Berge Olympus. This vessel will have 4 wings in total aboard its 300-meter length.
I can only hope that these relationships continue to strengthen and that we will keep supporting new customers with our green solutions.
Tl;dr for the lazy
- We need to think about resilience in a holistic manner. It’s not just about ensuring financial viability or the ability to keep operations afloat. A strong and positive company culture is very much needed while evaluating how to strengthen your business. After all, any industry is only as good as its workforce.
- Establishing trust is essential to build long-term relationships with partners, customers, and other stakeholders. This allows for in-depth insight into ongoing operations and allows you to empower your company with greater foresight and planning in the future.
- Flexibility, particularly in an industry that experiences a variety of highs and lows, is vital. It is impossible to predict what is awaiting us in the journey to 2030 and 2050, but you can meet it by progressing toward Net Zero.
- You cannot get stuck in perceptions of how you used to do things when you are called upon to evolve with the changing times. However, you need to balance this curiosity and bravery with pragmatism to ensure that what you’re working towards is something that offers real value to your industry.
- We all must embrace diversity and inclusivity. In order to truly save our planet, we cannot afford to leave anyone behind. Strategies for a sustainable future require that everyone undertakes immediate action to see diversity fostered amongst their workforce as well as in approaches and solutions to achieve a carbon-neutral future amongst their stakeholders.