Coming in the Autumn issue: Executive Roundtable
By Jack Burke01 August 2021
Editor’s note: In our Autumn issue, we will feature insights from industry leaders about market trends and developments. In this excerpt, Håkan Agnevall, who took over as CEO of Wärtsilä, discusses his thoughts on emerging trends.
Question: What do you consider to be the key market indicators/emerging trends and how are you mobilizing your business to address them?
Agnevall: It is simply one word: Decarbonization. It is clear by now that countries/regions and private companies who want to adhere to the Paris agreement are looking at decarbonizing faster than the International Maritime Organization’s timetable. Cargo owners are putting pressure on charterers to reduce emissions. Financing institutions are seeking mechanisms to pour financial resources into emission reduction. At Wärtsilä we are leading this process by developing technologies and services to enable operations with green fuels, improve efficiency, optimize voyage, and abate emissions. You could say we are fully mobilizing our organization, our resources and our research and development towards this goal: to decarbonize the maritime industry.
Also in the energy markets, the biggest driver is decarbonization. Countries and corporations all over the world are launching and revising their long-term strategies with increasing speed. The key aspect to monitor is how these long-term targets are shaped to milestones and concrete action plans. Future energy systems will be based on high amounts of renewable energy and wide cross-sector use of hydrogen or hydrogen-based fuels. We already see renewables being added to power systems across the world along with energy storage systems. To further stabilize the power system, alongside renewable energy sources, a huge amount of balancing power plants will be required for system flexibility, which also needs to be increasingly clean. Wärtsilä already today offers flexibility for power systems in terms of balancing engines and battery energy storage systems and is also researching and developing future fuels capabilities.
In a world focused on securing a carbon-free future, where there are uncertainties around every prospective fuel, including when and where they will be available and at what price, our approach to sustainability & decarbonization is to remain fuel agnostic. Instead of predicting what fuels will be available, we are adopting an approach of openness to all technologies and investing in fuel flexibility. The engines we design reflect this by being able to use different fuel types.
In many ways our approach to decarbonization is about creating an entirely new way of working. As the industry attempts to navigate the best pathway to decarbonization we want to reassure our customers that we are with them throughout their journey and they can be confident in partnering with us. With our outcome-based agreements we are prepared to share the risks with our customers and give them a guaranteed outcome. In this way we reduce complexity, deliver peace of mind and allow our customers to focus on their core business. How we do this? We expand customers’ revenue by reducing unscheduled maintenance and downtime, minimize OPEX by guaranteeing fuel consumption and emissions reductions. The result is a win-win for both our customers and the environment.