Shipping | The regulation of ship emissions tightened, and it filled the Finnish company’s order books

Here would be the green transition export technology announced in the parliamentary election debates. The kind where international regulation pushes the market to develop more emission-free solutions.

The Finnish rotor sail manufacturer Norsepower is now increasing its turnover after years.

“The price of oil was high last year and at the same time the regulation of maritime transport emission reduction progressed, so suddenly at the end of the year we started receiving orders”, CEO of Norsepower Tuomas Riski tells.

When the order backlog grew, the company decided to also increase its own operations and apply for financing to support international growth. Now Norsepower says that it has received a total of 28 million euros in funding.

At the same time, Norsepower has established a subsidiary in China, north of Shanghai, and is building production there to serve the Asian market. The company already has ten employees in China.

“Asia is the most important market for us. The majority of new ships for which our technology is suitable are made in Asia. The same goes for shipyards where our equipment can be retrofitted to ships,” says Riski.

International The goal of the maritime organization IMO is to reduce the carbon dioxide emissions of merchant shipping by at least 40 percent by 2030. The new regulation entered into force at the beginning of 2023.

Already this year, ships must therefore calculate and report information on their energy efficiency, and the organization collects data on annual carbon dioxide emissions.

Norsepower’s product is a rotor sail, i.e. a mechanical sail that harnesses the wind to help large ships and reduces fuel consumption.

In it, the device uses a small amount of the ship’s electrical energy to spin cylindrical rotors on the ship’s deck. The spinning motion combined with the wind creates thrust.

Norsepower’s innovation is based on a Finnish architect Sigur Savonius to the solution known as the Flettner rotor developed in the 1920s. At that time, technical challenges and the market situation prevented the invention from being widely used.

Now the product has been in use on ships for eight years, during which time data has been collected. According to measurements, the use of a rotor sail brings fuel savings of 5–25 percent, depending on the ship, how windy the route is and how many rotor sails are installed on its deck.

According to Norsepower, its customers include the world’s leading shipping companies and charterers such as Bore, Sea-Cargo, Scandlines and Vale.

Pandemic and big upheavals like war have drastically affected Norsepower in recent years as well. While the company already had a turnover of 5.2 million euros in 2020, the turnover in 2021 collapsed by almost half. Due to the corona pandemic, the maritime industry postponed its investments for a while.

Norsepower’s operating loss has varied between 1.3 million euros and 3.9 million euros in 2018–2021.

Now, the start of growth has also been rapid. According to Tuomas Riski, the company’s turnover last year rose back to the level of five million euros.

“Rotor sails have now been installed on seven ships and approximately the same number are waiting on the order backlog. We have good conditions to double our turnover this year,” says Riski.

Norsepower is a company founded in 2012, which now has around 40 employees.

Throughout its history, the company has collected capital from investors and support, product development loans and other public funding from the EU and Business Finland for a total of around 40 million euros.

Riski admits that the slow progress of the company and the entire industry has come as a surprise to him as well.

“I imagined that with emission reductions and fuel prices, the world would have been at this point already five years ago.”

The main investor in Norsepower’s financing round is the French asset management company Mirova, which is part of the Natixis Investment Management group that makes sustainable development investments. In addition to that, the investors were the Finnish Climate Fund, the state’s main investment company Tesi and VNT Investments, as well as a number of international players.