From Dante to Decarbonisation

Having left the world of science at school, I read medieval Italian poetry at university and thought to myself “finally – something I can study with real world application!” I slightly rued my artsy background when I took an MBA which involved some mathematics: the GMAT (“how is one not a prime?”), financial accounting (“how come income statements have expenses?”), Excel modelling (“how the IF does that work?”)… at least I was not being stretched beyond my academic limits in science.

And yet, this would shortly change – I am a glutton for punishment. I started at RIG knowing full well the deep dive into the scientific world this would require. I have tested the upper limits of the initial amnesty I have been afforded on stupid questions, where the clients with whom I am working push the boundaries of my formation in Physics and Chemistry. One company creates micro-grooves in film to use for energy storage & generation (“is a capacitor a kind of dinosaur?”), and another gasifies waste to create heat & electricity (“is syngas different from cosgas and tangas?”) – I’ve a feeling we’re not in Kansas any more.

That said – having arrived slightly nervous at my new place of work, after a week on the job I am immeasurably calmer. Firstly, the mission, values and vision of RIG are much clearer. Furthermore, my understanding of the science behind the numerous technologies with which we work has developed: I am now beginning to grasp the extent of how much I do not know. Finally, and most importantly, I have been benefitting from collaboration with my colleagues, from MD to intern.

As for my colleagues, I could write about the strength of their characters and their sparkling conversation; however, I will focus on their striking professionalism. The quality and quantity of work they provide to achieve the tangible delivery of value to clients, the depth and breadth of their knowledge within and without the technologies of their practice space – they are practically SMEs in a wide range of fields from CO2 reuse to cadmium removal.

Why am I not concerned about my non-science (nonsense? Ed.) background in this job? Partly meeting Scott Hartley (amongst other accolades, author of The Fuzzy and the Techie – worth a read!) at a poetry competition; Scott is a tech/science venture capitalist based in New York who studied Political Science at Stanford. He reflected on the value added to technical disciplines by ‘artists’ and compounded my belief that, when the machines take over and try to decide whether or not to keep the humans, our main differentiation (and chance of survival) will be our creative verve. But I digress…

The main source of my calm is my five-strong team working on sustainable technologies requiring considerable technical knowledge: all five of us studied humanities at university. RIG is a space where its teams’ members grow and learn exponentially. RIG’s competitive advantage is a proven commercialisation model combined with its people: a good balance of high-level EQ and IQ, and an insatiable hunger for knowledge. Based on the learning curve attested to by my teammates, I look forward to writing my next blog in a more technical than philosophical form.

E quindi uscimmo a riveder le stelle…

Getting ready for the waste revolution

Waste. Rubbish. Trash. Whatever you wish to name it, it litters the everyday landscape of our lives. Its ubiquitous presence flickers on the edges of our consciousness whether strolling down London streets, picnicking on beaches, or meandering through national parks. And this is simply the waste we can see. Even ‘pristine’ areas of wilderness have not been left untouched by the ramifications of anthropogenic activities, centuries of burning fossil fuels, and widespread overconsumption. For the sake of brevity, I won’t dive into the widespread destructive environmental and social consequences of waste, but I highly recommend this evocative article to give a flavour.

Waste is a universal issue that matters to every single person and rapid urbanization, population growth, and economic development will cause global waste to increase by 70% over the next 30 years – to a staggering 3.4 billion tonnes of waste generated annually. A huge proportion of this waste is (and is likely to continue to) not be managed in an environmentally safe manner. We live in a throw-away society where our daily actions and purchasing habits have a direct impact on the production, composition, and eventual disposal of waste. Perhaps you swing by Starbucks to buy a take-away coffee for the commute, then grab a quick sandwich from Pret, before discarding the packaging and cup in a bin. Once in the bin, then barely do we think about it again. Out of sight, out of mind.

So, what is waste? Where does it come from? What is the solution (or solutions) to this pressing global problem?

The UN describes waste as “materials that are not prime products for which the generator has no further use in terms”. Put simply, waste is unwanted or unusable materials. However, the change in mindset from ‘waste’ to ‘valuable resource’ is gaining momentum. The key is to treat waste as a resource that’s just out of place and as an untapped store of energy. I have to confess that before working in this space – whilst I knew that waste was an issue and that cutting down on consumption was vital- I had no idea the potential that ‘waste’ has.

The demand for energy will continue to rise in the future and waste is a readily available fuel that can contribute to this urgent need. Various national and international legislation, such as the EU Waste Framework Directive (WFD – 2008/98/EC) are seeking to incentivise the diversion of waste from disposal in landfill. Across Europe, there is growing recognition of the climate change benefits to be realised from increased recycling, reuse, and reduction of waste.  Furthermore, the UK is committed to reducing its greenhouse gas emissions by 80% by 2050 and supplying 15% of its energy demands from renewable sources by 2020. These requirements are driving the need for technology solutions, which enable residual wastes to be used as cost-effective, low carbon, and indigenous energy resources.

Action and investment are needed to promote and support this transformation, and to stimulate technological innovations in this space. One example of how the waste revolution may be achieved is through integrated energy from waste facilities which are scaled to local communities. These facilities will maximise the resource efficiency of waste conversion to heat and power enabling significant economic and environmental benefits. I am working with a company which is an exciting example of this, addressing the twinned challenges mentioned above – those of waste disposal and energy supply – at the same time.

The conversion of plastics to fuels is another vector which can contribute to this and is gaining traction. Rising public consciousness and awareness of the prolific environmental damage caused by single-use plastics and insufficient recycling have led to alternative disposal methods. Through my work at RIG, I have come to realise that the largest problems we face can also be the greatest market opportunities. Waste can be reclaimed and then converted back into virgin plastics (100% circular) or market-competitive end-of-life fuels. Some reports posit that plastic-to-fuel facilities in the US alone would create nearly 39,000 jobs and almost $9 billion in economic output, making the global market potential of such an industry huge. ReNew is commencing construction of a chemical recycling plant in Teesside, UK. Nexus Fuels, Handerek Technology, and multiple other companies around the world are doing similar things.

It is also important to bring the waste hierarchy to the forefront of any discussion concerning waste. The aim of the waste hierarchy is to extract the maximum practical benefits from products and to generate the minimum amount of waste. The 3R – reduce, re-use, recycle – movement is progressing steadily across the world and goes hand in hand with the waste hierarchy.

In this regard, pollution prevention innovations such as Marinatex have the potential to radically reduce the sources of waste throughout supply chains in multiple industries. In the last few years, movements towards zero waste by large corporates with clout and influence are a positive sign and a step in the right direction.

It may be unexpected to some that it is not multi-national companies with humongous R&D budgets that are coming up with solutions. Don’t get me wrong – I am not saying that they will not- but that start-ups are well positioned to do this. I have come across many early stage companies that are dedicated and committed to tackling the waste problem. They are flexible, they have blue-sky thinking, they spot the gaps in the market, they take risks, and they dream of a better future. The problem with such early stage companies is that they may not get there. There could be a game changing technology that can enable this shift, but if a start-up pursues the wrong market, if they run out of funding just before the leap from commercial demonstration to commercialisation – then this too is a waste. This is where RIG have cultivated expertise. From my own personal experience, I have spent months validating and analysing the appropriate markets for a given technology where the value propositions will resonate the most, and where there is the best chance of a company ‘crossing the chasm’.

It is vital that individuals, companies, and governments tackle the pressing waste management issue. This could be small personal changes like swapping to a reusable coffee cup (prevention), a company minimising the overall creation of waste resulting from an inefficient design, or a local municipality expanding their recycling facilities. We all have responsibility to reduce our ecological footprint.

Control your digital presence and harness the vitality of web-based communication

A big part of my job is to bridge the gap between our portfolio companies and the markets they serve. I speak with potential customers on a daily basis about a particular novel technology and the possible value it can unlock; I have found that a large part of successful commercialisation and deal making is in the effective presentation and communication of the product, solution, or service. If it is worth putting in days of preparation around the narrative and framing for a particular meeting that could lead to a million-pound deal, does the same principle not apply to the preparation and maintenance of a company’s communication platforms? Communication platforms are a way of ‘pitching’ to potential customers, partners, or investors as the public image of the company before a face-to-face meeting. I have found, judging by feedback from market validation of some of RIG’s portfolio of clients, that many early stage companies do not pay enough attention to their digital communication which is the most easily accessible expression of their value proposition. This ultimately leads to missing out on deals because the potential value of their technology is not conveyed through clear communication.

Early stage companies are often so focused on lead generation and outbound communication that they forget the importance of the website. A company’s website is a simple, yet extremely effective, tool to build the right narrative – about the technology and about the company itself.

Another considerable part of my remit is to research and find early stage companies with novel, innovative technologies in emerging areas with whom we can engage. There are some extremely exciting technologies that promise to solve critical sustainability challenges; however, this is not always effectively communicated via their websites. Far too often I come across a website that is either a labyrinth of pages with text that requires a code-breaker, or a basic website with outdated information and ‘news’ items.

A website is perhaps the most frequented platform and means of sourcing information: it should be a platform that a company uses to communicate who they are; it should be the keystone of its digital identity. Two of the main causes of page visits are online searches and direct stakeholder engagement. Either it is because an online search has led them to your website, or it is because you have approached a stakeholder, who will revisit the website. I am certain that, every time you have effectively engaged with a potential lead, they will have visited your website at some point. Thus, every aspect of it – the colour scheme, graphics, language, even layout – conveys a message about the company and builds an image. Your company image is only as strong as you communicate it on the website; it does not matter if you have the better, faster, stronger technology. If you are unable to convey why your technology’s advancements or innovation will result in added value for your partner or customer, or the end consumer, then it is unlikely that the technology will be adopted in the first place. Ultimately, this image will form the foundation of your brand.

That said, not all early stage companies will have the resources available to design a swanky, slick website – and given the nature of early stage companies, they will doubtless want to change the content as they constantly iterate, fail fast, and pivot. Therefore, when I have led and overseen website redesigns, I have tried to stick to 4 key guidelines: clarity, conciseness, consistency, and currency.

  1. Be clear. Typically, innovation companies have a unique product, solution, or service that is differentiated by IP. If the technology is not easily grasped, it becomes infinitely more difficult to commercialise. Diagrams, animation, or videos are often more effective than written word.
  2. Be concise. Every word on a website is important and should be used for a reason and avoid over-complication. A website should not publish every detail of a company’s history: there should be enough detail to communicate the core values, mission and vision of the company.
  3. Be consistent. Strive for uniformity in colour, words, and style. This not only consolidates the information and conveys professionalism, but it shows an awareness of strategic brand management; once the product/service is adopted and imitated, the effective use of its brand is one of a company’s main sources of differentiation and defensibility.
  4. Be current. Content is critical. In the first place, up-to-date content shows progression by acting as a log of the development of the company. Your company is only as up-to-date as you publish. Secondly, it highlights the achievements and milestones of the company. Target audiences will not be informed of any developments (e.g. your latest product offering, award, successful test etc.) unless you tell them. Emerging technology companies are judged based on the traction they achieve, and that can only be recognised by generating awareness – keep your news ‘new’.

Whether you are trying to generate leads, fundraise, hire, or simply raise awareness, I can guarantee that people will frequent your company’s website. It is the main platform where your company is presented over which you have control, and it is critical in the development path for early stage companies. Present your company as you want – no one else will do this for you.

A final week at RIG

Six weeks working at RIG have flown by, which I imagine is unusual for a first experience of professional life. My introduction to the work environment has given me a new range of knowledge, from making use of excel keyboard shortcuts, through to understanding how to use the office buzzer. I also learned how to write as fast as humanly possible while making call notes verbatim. LinkedIn and CrunchBase have become loves of mine. I was eventually prompted to take the plunge and create my own LinkedIn account. The things I have learned have not just been work-related; working at RIG has also given me the opportunity to get to know Holborn better. I have now perfected the art of efficient commuting. I am well-versed on knowing exactly which tube carriage to choose, making my commute as fast as possible.

I was struck during my work by the diversity of early-stage UK-based technology companies and it has been really exciting to see companies that have the potential to transform certain industries in the future. Even now, I have turned on notifications on my home computer for news about the 3D printing industry. A highlight for me has been taking part in company calls, where I have had the chance to hear experts in their field describe what their company does. Near the end of my internship, I introduced a call with a client whom I had initially contacted – this was extremely rewarding.

The market validation work I have been doing has certainly given a new-found relevance to my Natural Sciences degree. Reading about agricultural technology companies that are transforming crop yields or solving human health problems has given me a different outlook to my plant sciences lectures at university last year. This commercial insight will stay with me.

On top of widening my awareness of the scientific world, I have learned a lot throughout my internship about how venture capital works. I now know much more about the arena of CVCs and family offices and I have gone from never having read an annual report in my life to using figures such as net, operating and gross profit. I can proudly say that I now know what acronyms like EBITDA and GAAP mean. I have been struck by how international venture capital investment is, with venture capital firms rarely being restricted to investments in one country.

In the context of the climate strike which took place in London last week, hearing the team describe some of their circular economy and decarbonisation-focused clients has given me a lot of hope for a future. I learned about a lot of very cutting-edge companies, who are driven by renewable energy technology and motivated to find new ways to reuse waste.

Companies with novel and exciting scientific technologies have a truly global reach and there are lots of people in the team with the ability to speak foreign languages. This has prompted me to finally sign up to take German language lessons next year; a skill which I am sure will be valuable in the future.

I am really grateful to the RIG team for being so kind to me – it has been a great six weeks!

Egg-laying and milk-giving wool-pig

Idioms don’t always translate well across different languages and cultures, but I thought this particular German phrase was a visceral and compelling image as a warning to early-stage companies not to be “all things to all people.”

Eierlegendes und milchgebendes Wollschwein, literally egg-laying and milk-giving wool-pig (sometimes shortened to eierlegende Wollmilchsau), was a phrase I first heard on a phone call with a German company a couple of years back; it was repeated recently, prompting me to write this short blog.

While it sounds great to have a multi-functional animal which provides you with all your nutritional and clothing needs, it will not be a surprise that this is used pejoratively. It describes the familiar cynicism around things that sound too good to be true and claim to be capable of dramatic improvements across a whole host of different parameters.

So how does this apply to the commercialisation of emerging technologies? Generally speaking, for early-stage companies – and especially for platform technologies with broad applicability – it is critical to develop and prove a focused value proposition with a clearly defined benefit to the end user or partner with whom you are engaging. There is often a temptation to develop a long list of all the things your technology does and is a solution for; this is in the hope that it makes your proposition seem more attractive or widens your potential audience. However, what often happens is the message becomes muddied and the proposition less compelling.

As soon as you profess a fantastical ability to do many things effectively, you risk losing credibility and diluting your message, even though there may be validity to those declarations. Remember that extraordinary claims require extraordinary evidence.

Don’t be an egg-laying and milk-giving wool-pig.

Getting fit for fundraising

A recent blog by Fred Wilson resonated with me and motivated me to write my next blog. In his blog, Fred reflects on the decision by WeWork to postpone their listing and uses the term “hair on a deal” to describe when a deal has too many issues which ultimately kill the investment. The critical lesson for entrepreneurs he highlights is the importance of having your house in order before starting to raise capital.

At Rapid Innovation Group, we believe that companies need to be “investor ready” and fit to raise. The analogy that I used recently with a company was that if an inactive and overweight 40 something year old (guilty) declared that they were heading straight to the track to run a 5-minute mile this would be viewed incredulously. Why? Well, obviously, they are totally unprepared both physically and mentally to be successful. How could they achieve this goal? However, if the person said that they were starting on an 12 month programme with this as the end goal and that they were hiring a personal trainer with a background in track and field, a nutritionist, physiotherapist and a sports psychologist to help them achieve this goal, then you might view their declaration as viable. If this was further backed up by a plan divided into clear blocks with defined milestones which involved shedding excess weight, building the body strength required for the distance, and fine tuning their technique,  then you would start to believe further and might even contribute to their GoFundMepage.

 

Similarly, companies need to get fit before attempting to engage investors. We have developed an audit tool to help companies understand their investor readiness and to identify the gaps that need closing before beginning a fundraising process. This invariably requires the investment of time to bottom out the gaps. The amount of time required is a function of how much fitness work needs to be undertaken.

But as we all know, early stage companies tend not to have time on their side particularly when it comes to fundraising. So, you need to begin this process well in advance of starting your next fundraising.  You need to assess how far away from readiness you are and what you need to do to close the distance. You need to make sure that you have enough runaway to enable you to execute these tasks (remember running out of money is not a reason to support a raise). You also need to know what investors will expect at your stage and how much hair they can stomach. The key here is to begin your investor training/preparedness in sufficient time before you need to raise. This will make the period from investor engagement to deal closure run as efficiently and effectively as possible. Although this is no guarantee of success, it puts you in the optimum shape. As Abe Lincoln once said “give me six hours to chop down a tree and I will take four to sharpen the axe”.

First week at my RIG internship

After reading these intern blogs singing RIG’s praises on the website myself, my first week at RIG has luckily completely lived up to expectations. It’s been full-on in the best way possible, in a blur of learning about everything from how 3D printing is used for gas turbine parts, to how to take meeting notes and research potential clients,  to how to set up a laptop and even (importantly) being taught how to use a cafetière for the first time.

The team at RIG are all immensely hardworking and have a breadth of knowledge about their clients, despite being ‘generalists’ who become specialised in a certain field very quickly. They are also funny, welcoming and friendly, and happy to offer advice and show how they do things, with James and Ellie inviting me to see them make a client call an hour into my first day. And they treat their interns well; even though it’s my first week, I’ve apparently been given the nicest laptop in the office!

On the first day I was also given information about two companies I would be working with, both very different and exciting. The first is an alloy-making company that makes parts for a variety of companies, and the second is a company with water-purifying technology that seems to have a huge potential for transforming a variety of markets, from agriculture to the swimming pool industry. I spent time reading about what these companies do, which was really interesting but meant that I needed to learn a lot of definitions! By the second day, I was reading a business plan, learning still more jargon, and was taken by Simon into a client meeting with the water-purifying company, where I learnt still more technical words and figures.

Since then I have been doing market validation, researching potential clients for the first company and looking at the size of the market in different countries for the other. Although this week has had the potential to be overwhelming, the warmth and helpfulness of everyone in the office has meant that it’s been really exciting, and I can’t wait for more time at RIG!

Competition: a missed opportunity to be embraced

Who is your competition and how are you differentiated? This is a critical component of both commercialisation and fundraising, around which technology developers have significant scope to improve their current approach. Too often, companies are unwilling to tackle this topic in the depth it deserves. Whether this is due to fear, naivety, arrogance, ‘blissful ignorance’, or inexperience is not always evident. Competition is often seen as a negative. Consequently, people fail to see the learning potential that analysing the competition presents and opportunity that it provides to shape the narrative when speaking to investors and early adopters.

The result is that innovators often fall into one of two traps. The first is saying that there is no direct competition (e.g. we are the only ones), in which case they are admitting that they are addressing a non-existent problem as per pitfall 4 in Dr. Malcolm Fabiyi’s blog on why investments fail. The implication is that if no one else is solving the problem, it probably does not exist, the consequence then being that there is unlikely to be a market for your technology. This represents a failure to recognise that the presence of competition is a form of market and opportunity validation in and of itself.  The second is, they create a table of attributes (or matrix) which shows how they are the only one to tick every box (with the nearest competitor rarely being allowed to tick 75% of the criteria). See an example below:

 

I believe, however, that there is an opportunity for the technologist to choose how the competitor narrative is framed. But in doing so, it is not credible to select clearly irrelevant or bottom-of-the-barrel examples. In his investor pitch academy presentation, Andrew Chung of 1955 Capital (and formerly of Khosla Ventures) outlines a good framework for shaping the competitor narrative and I think his point on thoughtful understanding of competition is an area for improvement for most innovators.

In analysing the competitive landscape, it is important not to ignore adjacent technologies/ companies who may, over time, represent an alternative solution to the challenge or consider entering the market. Think: what else does or could do the same job? This of course will take some research.  I often sense technologists see this as a low value activity and are therefore not motivated sufficiently to put the time into researching all the direct, alternative and adjacent solutions. Which leads to more time investment in analysing their performance against key end-user defined performance criteria. Followed by, further time synthesising why their technology is not just better but has a significant moat that it will cost direct and putative competitors excessive amounts of money and time to overcome.

While doing this will be time-consuming, there are several benefits:

  • The first is that, with both investors and early adopters, it will demonstrate that you truly know your market and those who purport to address the challenge (the people that you are speaking to are also likely speaking to your competition).
  • Second, it will add credence to your claims of differentiation, as demonstrating this knowledge will have a self-fulfilling impact when you then say that you outperform all others for A, B, or C reasons.
  • Finally, a by-product of this exercise is that it will help to define the initial applications where you have the greatest advantage or where the competition has either ignored or been unable (to-date) to service the application successfully for a given reason. This is where your opportunity to define the competitive narrative comes into play. Combining this with some market sizing and growth analysis should identify those segments of sufficient size and momentum that can act as catapults into larger segments. Competition in these may be stronger but can be tackled once you have gained enough scale and success in the initial segments.

For companies with new technologies in the AgriFood sector, it is important to recognise that, if your technology is an improvement or an alternative to an existing practice, or use of a fixed asset (such as an irrigation system or heavy equipment), these existing assets are also likely to be a competitor to adoption. It is often underestimated how hard it is to displace the status quo or change behaviour. The same will apply for Watertech.

Lastly, one lens that is often neglected when assessing the competitive landscape is the competition for a share of the customer’s wallet. Whether your solution is going to be used on a farm, in the logistics chain, processing, production or packaging settings, the users of your technology have a limited amount of capital to re-invest in their business and will undoubtedly have more than one challenge (hopefully including the one that you are addressing) that they need to resolve. You therefore need to think about how you position yourself against the multitude of other investments they could make and why they should invest in you. You need to understand who/what you are in competition with, in order to highlight and frame your competitive advantage and differentiation in the right way.

This then becomes a factor of competing financial performances of the various investment opportunities for a customer, along with the influence of additional factors such as regulatory pressure and corporate prioritisation. But again, understanding how investing in your solution compares versus other investments the end-user could undertake provides an opportunity to shape the messaging to both adopters and investors as to why your proposition is compelling and in what scenarios.

Borrowing economics to save the world?

It is hard to ignore the noise currently being made about climate change. Be it Extinction Rebellion, Greta Thurnberg, or Michael Bloomberg, it is certainly a topic that has made its way into the public consciousness this year and let’s hope that it stays there.

The way I often engage with climate change is through the work that I do with sustainable technologies. Our decarbonisation practice is focused on helping to make potential solutions to climate change into a commercial reality.

And therein lies the rub. We can shout, we can close bridges, and we can fill our TV screens with heart-wrenching images of stranded polar bears. But, at least in my experience, there are few large-scale industrial carbon emitters who are willing to pay for the technologies that will halt the ticking CO2 timebomb that we’ve all been talking about.

I often hear people saying that there aren’t currently any viable solutions to our predicament, or that our technological saviour is yet to be invented. But, actually, there are a lot of technologies already out there, it’s just that people don’t want to pay for them.

While we are starting to see the introduction of serious financial incentives to capture CO2 in places such as California and Ontario, I am a big believer that enduring solutions must be able to stand on their own economic feet. This is not dissimilar to the way I felt about renewable generation technologies being propped up by feed-in-tariffs. While financial incentives can form a critical part of getting a new type of solution or technology off the ground, it should not be the crutch that enables long-term economic viability.

What I have come to realise recently is that you don’t necessarily have to get CO2 capture or utilisation to pay for itself directly. It is this line of thinking which helped me to develop the notion of “borrowed economics”.

I am currently acting as the Strategy Director for a company which uses waste CO2 to carbonate industrial thermal residues (incineration ashes, steel slags, cement dusts) and generate a mineralised product for use as a building material. Although the implementation of the European Emissions Trading System (ETS) can enable a small cost saving through the diversion and utilization of CO2 in this process, CO2 capture is not in itself a profitable activity in this instance. Instead, a significant economic benefit is achieved by diverting thermal residues from landfill, often eradicating disposal costs of up to £120/tonne. Every pound saved on the avoidance of landfill can be attributed to a quantity of CO2 used, allowing us to express permanent CO2 capture as a profitable activity. This is how we borrow economics.

The question for me is can we do this by design? Can innovators identify economically attractive problems to solve that also result in the reduction of carbon emissions? Ideally, governments, regulators, investors, and industrial corporates will soon start to place a monetary value on CO2 capture or emissions reduction. Until they do, we might need to get a little creative with our economics.

Setting sail to decarbonisation

Shipping touches pervasively but unobtrusively on every aspect of our daily lives; from the clothes we wear, to the food we eat, to the goods we order online. But rarely do we think about the negative environmental ramifications caused by it. These environmental impacts include air pollution, water pollution, noise, and oil pollution. Greenhouse gas emissions from shipping currently represent 2.6% of total global emissions, equivalent to those generated by South Korea. The International Maritime Organisation (IMO) estimates that carbon dioxide emissions from shipping are expected to rise by between 50-250% by 2050 if no action is taken.

There are several drivers contributing to increased efforts to decarbonise. The maritime industry is facing a twinned challenge of a global rise in fuel prices combined with tighter environmental regulations. The IMO announced in 2018 the objective to “reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008, while, at the same time, pursuing efforts towards phasing them out entirely”. Additionally, the IMO’s global sulphur cap comes into play from 2020, substantially lowering the current 3.5% limit to 0.5% and enforcing cleaner shipping. Consumer demands, reputation concerns, and pressures from NGOs and investors are also increasing the demand for greener shipping.

Decarbonisation is the key challenge for this industry; however, the design, operation, and maintenance of shipping is built to suit the fossil fuel ‘paradigm’. Deployment of all currently known technologies could make it possible to completely decarbonise by 2035. But how are we going to get there? There is no silver bullet technology that can make the transition easy and effortless. Instead, a wide variety of technologies are needed. Innovation is necessary and vital.

Whilst shipping is the least carbon intensive way to move freight, the industry is highly reliant on outdated technology. This presents a huge energy efficiency opportunity for ships, start-ups and investors. Zero-Emission vessels (ZEVs) are needed in order to meet the IMO’s targets and contribute to meeting the goal of the Paris agreement. There are 3 broad solution areas through which decarbonisation can be achieved; technological, operational, and alternative fuels/ energy. The largest emission reductions are likely to come from alternative fuels/ energy.

Technological solutions involve improving the weight and design of ships, reducing friction, and energy recovery e.g. via propeller upgrades or heat recovery. Potential fuel savings arising from air lubrication and hull surface technologies alone could be 2-9%. For example, in this space, graphene is being innovatively used to reduce biofouling, increase the longevity of boat hulls, and decrease friction. Furthermore, many of these solutions are already available on the market and can be retrofitted.

Operational measures involve speed, ship-port interfaces, ship size, and onshore power. Multiple start-ups are specialising in this area; creating digital twins (such as We4Sea), data driven cloud platforms and using AI for predictive analytics to optimize operational performance (such as nauticAi).

Alternative ZEV technologies include ammonia fuel cells, ammonia + internal combustion engine (ICE), biofuel, electric batteries, hybrid hydrogen, hydrogen fuel cells, and hydrogen + ICE. It is crucial to ensure that these fuels are not simply moving the GHG problem upstream, as there may be emissions that arise through their production. However, future CO₂ emission reductions from certain alternative fuels could be 100% if produced by renewable energy sources. Not all of the alternative fuels have reached market maturity, and most are still in a research and development phase. There are also issues regarding safety, cost, availability, and sustainability. It is likely, however, that the costs could all reduce significantly in the future. Two of the most likely routes to shipping decarbonisation come from the use of biodiesel and the use of ammonia, based on zero-carbon hydrogen. In the near term, novel wing sail systems, such as those developed by Bound4Blue, are already making a splash with serious potential to reduce fuel consumption.

The maritime industry is not without its risks for start-ups. There are high barriers to entry, and significant levels of skills, experience, knowledge and capital are essential. Information asymmetry, split incentives, and the fragmented nature of the industry are not easy obstacles to overcome. Climate change is opening up the Arctic, international trade will continue to grow and the demand for shipping will increase. The scale and value of this opportunity must not be ignored or hidden by ‘sea blindness’. This is an exciting time for innovative technologies companies who can play a critical and key role in decarbonisation.