The Climate Fund invests EUR 10 million in Norsepower to accelerate the reduction of emissions in the shipping industry
The Finnish Climate Fund has decided on a capital loan of up to 10 million euros for Norsepower, which manufactures rotor sails, in order to increase production capacity. Norsepower’s products save considerable amounts of fuel and can enable emission reductions measured in millions of carbon dioxide tons over the next decade.
Shipping emissions are a major climate challenge. About 2.5% of global annual greenhouse gas emissions come from shipping, and shipping accounts for 13.5% of the EU’s total greenhouse gas emissions.
Emissions from shipping are predicted to increase without additional measures, so the development and scale of solutions that reduce emissions in the shipping industry is crucial.
Norsepower reduces emissions by providing ships with wind power with the company’s own rotor sail. Depending on the wind conditions, Norsepower’s product can reduce the ship’s fuel consumption by 5-25%, which significantly reduces shipping emissions.
“The future of shipping is emission-free, and Norsepower’s technology to cut fuel costs and greenhouse gas emissions is part of that future,” says Norsepower’s CEO. Tuomas Riski. “Norsepower is an ambitious growth company, and the Climate Fund’s investment significantly accelerates the scaling of our production from what we could have achieved with organic growth alone. The participation of the state gives us credibility abroad as well.”
“Reducing emissions from ships is an important step towards carbon-neutral logistics and transport. Like many others, this climate challenge requires several parallel solutions. Norsepower’s rotor sails are an immediately available solution, especially for emission-intensive marine tankers. The Climate Fund’s investment accelerates the scaling of the product on the market and thus also its emission reductions,” says Paula LaineCEO of the Finnish Climate Fund.
Norsepower’s solution and financing:
Norsepower was founded in 2012. The company’s rotor sail produces wind power for ships, which reduces fuel consumption regardless of the engine’s energy source. User experience has shown that the propulsion generated by the rotor sail also increases the ship’s speed and can in some cases significantly stabilize the ship even in rough seas.
The Norsepower Rotor Sail™ is a modernized version of the Flettner rotor developed in Germany in the 1920s. The company’s rotor sail technology utilizes the pressure difference phenomenon, i.e. the Magnus effect, to produce 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 areas such as automation, data collection, simulation and components. Other important improvements include a new, patented production method and a composite material that enables the manufacture of lighter sails.
Shipping emissions can be reduced in three ways: ship fuel solutions, ship design or operational solutions, i.e. choices related to ship type, route and speed. No single existing technology is sufficient to reduce maritime carbon dioxide emissions sufficiently to meet the IMO 2050 targets, so these solutions must be utilized together.
The emission reduction potential of Norsepower’s solution is based on the fuel saved by rotor sails. Actual emission reductions also depend on factors such as the ship’s route and sea conditions. Customer experiences have shown that 5–25% fuel savings can be achieved with the technology, depending on the wind conditions. A single sail is estimated to reduce annual emissions by 256–991 t CO2 equivalent, depending on its size. The ten-year cumulative emissions reduction potential of Norsepower’s solution is approximately 6.4 Mt CO2-eq.
Norsepower is raising more than 25 million euros in financing for production plant investments to expand the assembly line of rotor sails, as well as for operations and working capital. In addition to the Climate Fund investment, Norsepower has received a 5.6 million euro convertible bond from its owners and Nefco.
The Climate Fund has granted Norsepower a capital loan of up to 10 million euros at a market-based interest rate, which is determined in accordance with the project’s risks and the EU’s minimum interest rate requirements. The capital loan also includes a conversion right. Allocating funding to new production lines makes production and deliveries more efficient and thus accelerates the company’s ability to scale.
Source: Climate Fund