Climate Fund invests €10 million in Norsepower for accelerating emissions reductions in the shipping industry
Shipping emissions are a major climate challenge. Approximately 2.5% of global annual greenhouse gas emissions are generated by shipping, and shipping accounts for 13.5% of the EU’s total GHG emissions. Shipping emissions are projected to grow without further action, therefore, the development and scale-up of emissions-reducing solutions for the shipping sector is crucial.
Norsepower reduces emissions by providing ships with wind-powered propulsion using the company’s proprietary rotor sail. Depending on the wind conditions, Norsepower's product can reduce the vessel's fuel consumption by 5–25%, which generates a significant reduction in shipping emissions.
”The future of shipping is emission free, and Norsepower's technology for cutting fuel costs and greenhouse gas emissions is a part of that future”, says Norsepower's CEO, Tuomas Riski. ”Norsepower is an ambitious growth company and the Climate Fund’s investment accelerates the scale-up of our production considerably from what we could have achieved with organic growth alone. The involvement of a state entity also lends us credibility abroad.”
”The reduction of shipping emissions is an important step on the way to carbon-neutral logistics and transport. Like many others, this climate challenges requires several parallel solutions. Norsepower’s rotor sails are an immediately available solution, especially for emissions-intensive ocean tankers. The Climate Fund’s investment accelerates the product’s scale-up on the market and thus also its emissions reductions”, says Paula Laine, CEO of the Finnish Climate Fund.
Norsepower’s solution and funding:
Norsepower was established in 2012. The company’s rotor sail generates wind-powered propulsion for ships, reducing fuel consumption regardless of the engine’s energy source. User experiences have shown that the propulsion generated by the rotor sail also increases the vessel's speed and, in some cases, can stabilise the ship significantly in rough seas.
The Norsepower Rotor Sail™ is a modernised version of the Flettner rotor developed in Germany in the 1920s. The company’s rotor sail technology utilises the pressure difference phenomenon, or Magnus effect, to generate propulsion. The rotating surface of the sail creates negative pressure on one side and positive pressure on the other, creating lift that can be used to propel the ship forward. Norsepower has made significant improvements to the concept in automation, data collection, simulation and components, among other things. Other key improvements include a novel, patented production method and composite material that enable the production of lighter sails.
Shipping emissions can be reduced in three ways: with ship's fuel solutions, ship design or operative solutions, that is, choices related to ship type, route and speed. No single existing technology will suffice to reduce the carbon dioxide emissions of marine shipping enough to meet the IMO's 2050 goals, so these solutions must be employed together.
The emissions-reduction potential of Norsepower's solution is based on the fuel saved by the rotor sails. Actual emissions reductions also depend on factors like the ship’s route and conditions at sea. Customer experiences have shown that the technology can achieve fuel savings of 5–25% depending on the wind conditions. A single sail is estimated to reduce annual emissions by 256–991 t CO2-eq depending on its size. The ten-year cumulative emissions-reduction potential of Norsepower’s solution is approximately 6.4 Mt CO2-eq.
Norsepower is gathering over €25 million in funding for production facility investments to expand its rotor sail assembly line, as well as for operations and working capital. In addition to the Climate Fund's investment, Norsepower has obtained a convertible bond loan of €5.6 million from its owners and Nefco.
The Climate Fund has granted Norsepower a capital loan of at most €10 million with a market-based interest rate determined according to the risks of the project and in line with the EU's minimum interest rate requirements. The capital loan also includes a conversion right. Allocating funding to new production lines boosts production and deliveries and thereby accelerates the company’s scale-up capabilities.
Norsepower Oy Ltd is a Finnish technology company whose rotor sail technology is the best-selling and most widely used mechanical sail for large cargo and passenger ships in the world. The effectiveness of the Norsepower Rotor Sail™ has been objectively verified in several customer reference studies, and the solution enables significant fuel savings and emissions reductions in marine shipping.
Saara MatteroCommunications and Sustainability DirectorTel:+358 400 114 777Saara.Mattero@ilmastorahasto.fi
Tuomas RiskiCEONorsepowerTel:+358 50 email@example.com
About Ilmastorahasto Oy
The Finnish Climate Fund is a Finnish state-owned special-assignment company. Its operations focus on combating climate change, boosting low-carbon industry and promoting digitalisation. The Climate Fund invests in large-scale projects in which the fund’s investment is crucial to enable the project’s realisation in the first place, on a larger scale or earlier than it would with funding from elsewhere.
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