In an exclusive interview with the Norwegian finance media InvestorNytt, TECO 2030 gives InvestorNytt an insight into their groundbreaking work on green solutions for the maritime industry. From their early days focusing on environmentally friendly cleaning methods to their current pioneering work with hydrogen-based fuel cells, TECO 2030 is leading the way to a more sustainable future in the maritime industry.
In the interview with TECO 2030 CEO Tore Enger, we gained deeper insight into the company’s history, their green focus, and how they aim to be pioneers for eco-friendly solutions in the maritime industry.
TECO 2030 started in 2019 as a spinoff from TECO Maritime Group, which celebrates its 30th anniversary next January. Since its foundation in 1994, the company has always had a strong focus on the green segment of the maritime industry.
“We were among the first companies globally to switch from sandblasting to high-pressure water for tank cleaning. This was a revolutionary change that significantly reduced environmental impact,” Enger explained.
In addition, the TECO Maritime Group owned a factory in Singapore specializing in the production of high-pressure cleaners. They were also pioneers in the use of water-based detergents for cleaning cargo tanks.
Enger continues to explain how the company has contributed to extending the life of electronic and automation components, as well as their general ship repair operations in Gibraltar.
“We have always been committed to environmental standards. For example, we were the major owner in Scanship, which is now part of VOW ASA, from 2008-2017. Scanship is a world leader in water treatment on board cruise ships,” says Enger.
He also mentions the global “sulfur cap” in 2020, which reduced the sulfur content in heavy fuel oil from 3% to 0.5%. This led to an increase in demand for exhaust cleaners, also known as “scrubbers.”
“We have installed over 130 of these towers on various ships, including many cruise ships. But many wonder why we don’t produce our own scrubbers. The answer is simple: We want to focus on solutions that address a wider range of environmental challenges, not just SOX emissions,” Enger concludes.
TECO 2030's Future Vision: From Scrubbers to Groundbreaking Fuel Cells
Tore Enger spoke further about TECO 2030's innovative projects and their vision for the future.
After developing the “TECO future funnel,” which Enger describes as “tomorrow's scrubber,” in record time with help from AVL in Austria, TECO 2030 began exploring new technological opportunities. “We did this development in record time, we did it in 6 months. Thanks to AVL, which probably has the most sophisticated simulation tools in the world. So, we ran the scrubber to pieces inside the simulator many times, tore it apart, and replaced components, and by the middle of February 2020, we were ready to go into production, setting two of the scrubbers in production in Germany. And then came Corona, and there were some changes, the market collapsed, and everyone got sick. The world shut down, so we were about to make scrubbers in the worst period of Covid. Then we get through the summer. We wanted to go beyond traditional scrubbers and find technology that the world really needs,” says Enger.
This led them to the development of fuel cells specifically designed for the maritime industry and heavy applications. “Nobody in the world had this. Most fuel cells were developed with passenger vehicles in mind, not ships,” Enger explains.
With support from AVL, which is the world’s largest independent developer of powertrain systems, TECO 2030 developed a fuel cell stack that is both powerful and compact. “Our 400KW module has half the footprint compared to competitors. On ships, space is critical, so this is a major advantage,” said Enger.
He also shared the news that their module is currently being tested at AVL’s facilities in Graz, Austria. “We are excited to see the results, and we plan to make a film about this milestone,” he adds.
Enger emphasized the importance of having a strong team. “We attract the best talents in the industry. For example, Hans Petter Klein, one of the world’s leading experts on fuel cells, came to us from AVL,” he said.
TECO 2030 has also entered into a partnership with thyssenkrupp to deliver manufacturing equipment to their factory in Narvik. “We have a dedicated team in Narvik who previously worked with REC Scancell. They have experience scaling up production quickly,” Enger explained.
He concluded by expressing optimism for the future. “We have the right tools, and we see the market beginning to open up. Doors are opening for us,” Enger said.
ESG Fluctuations and TECO 2030’s Strategy for a Greener Maritime Industry
Enger responds to how fluctuations in the ESG sector affect TECO 2030 and their strategic initiatives to promote environmentally friendly practices in the maritime industry.
“Although we are aware of market fluctuations, they are beyond our control. We are a small player, but we see global giants like IKEA, Apple, and Amazon taking steps towards zero emissions throughout the product value chain. Every step in the right direction contributes to a better world,” says Enger.
Regarding strategic initiatives, Enger explains that TECO 2030 is looking at innovative solutions for the maritime industry. “We can implement fuel cells on ships that use hydrogen. Another possibility is to use ammonia, which can be converted to hydrogen, allowing ships to travel longer distances, such as across the Atlantic.”
He adds that the transition to greener technologies is likely to start with shorter routes, like Oslo to Rotterdam, before expanding to longer routes. “Larger ships will initially combine fuel cells with other types of fuel, which will allow them to dock without polluting. This is the beginning of a global movement towards a more sustainable maritime industry.”
Strategic Partnerships and Economic Outlook for TECO 2030
Tore Enger is asked about TECO 2030’s strategic partnerships and their economic prospects.
“We have an ongoing project with Shell and Horizon Europe, which we call a 'Lighthouse project'. Both parties have invested 5 million dollars. The goal is to convert a 20-year-old, 6,000-ton ship with high emissions to zero emissions. When the project is completed next year, this ship will go from being the most polluting in the fleet to the most environmentally friendly.”
Regarding the company's financial prospects, Enger explained: "We are still in a development and testing phase. I expect that 2025 will be the year when we see a significant increase in turnover and a positive bottom line. 2024 is a bit uncertain, as it depends on which major players take the initiative first. We believe that once one of the major players takes the step, it will create a domino effect in the market."
He added that TECO 2030's focus is not on small projects, but on larger initiatives. "We are not looking for small projects like installing a 200kw system on a local ferry. Our goal is to be part of the bigger change in the industry. We may be a small company, but we are the only one we know of that is planning large-scale production towards the end of next year and into 2025. With a planned production capacity of 400 megawatts per year, this could potentially generate sales of about 400 million euros. But of course, the customers must be there."
Boost from International Green Initiatives
In the interview, Tore Enger was asked whether TECO 2030 has noticed any impact from the EU's and USA's commitment to green transition.
"Yes, we definitely feel a positive momentum. People are becoming more aware of the importance of the green transition. We also expect that there will be new taxes related to emissions, both in Europe and the USA. In the near future, we might see some form of energy labeling in the maritime sector indicating how sustainable a service or means of transportation is, similar to what we see on light bulbs and other electronics today. The most sustainable options will probably be prioritized."
This may lead to environmentally conscious companies choosing transport options that meet their strict emission criteria, especially for sea transport.
Tore Enger adds, "When you mention 'sea transport', it's important to remember that 90% of all global freight is carried out by ships. There are few alternatives to large ships for international freight."
The Future of the Hydrogen Market and Competition
Enger was asked about how he envisions the development of the hydrogen market, given the need for larger investments to serve a market shifting to fuel cells.
And he answers, "There are countless initiatives around hydrogen globally. The USA, Europe, the Middle East, Asia, and especially China, are all deeply involved in hydrogen-related projects. Even though China is far ahead, they are quite silent about their progress. Those who watch closely will notice China's engagement. Norway has a preference for blue hydrogen given our wealth of natural gas. It will take time before green hydrogen is produced at a large scale. People must understand that we are still dependent on oil and gas. Without it, the world as we know it would collapse within 48 hours. But thanks to initiatives, especially from the Biden administration, we are moving towards a greener future."
How does TECO 2030 view the competition in the industry?
"The more players, the faster the green transition will happen. We plan to produce 1.6 gigawatts of fuel cells in Narvik, Norway by 2030. But according to Citigroup and McKinsey, the global market will need 50 gigawatts annually by the same time, and this number will grow significantly in the years to follow. Even if we reach our goal of 1.6 gigawatts, there will still be an enormous need in the market. This isn't a competition, but rather a collective effort to drive the world towards a greener future together," Enger responds.
The Beginning of a New Industrial Revolution?
It seems as if we are on the brink of a new industrial revolution with everything that's happening in hydrogen industry right now.
"Absolutely. We have not witnessed such a transformation since the combustion engine replaced the steam engine. Before that, it was sailing ships that dominated. In the future, we will see fuel cell engines, methanol engines, ammonia engines, and LNG engines. Even though LNG will still be relevant for many years to come, especially with the current production of LNG-powered ships, these ships must address their emissions, as LNG is not environmentally friendly. They will need to have technology onboard that makes LNG ships emission-free when in port," Enger responds to the statement.
Asked if there are ongoing discussions with authorities in Norway, the USA, and Europe about possible collaborations, Enger responds
"Yes, we are in dialogue with Innovation Norway, the Norwegian Maritime Directorate, and also with DP World, which operates 50 large ports globally, including in Abu Dhabi and Dubai. We are also in discussions with NEOM in Saudi Arabia and ADNOC in Abu Dhabi. Our goal is to engage with the major players who can contribute to significant changes. We want to be part of the bigger picture, not just a small actor. Our initiative is a collaboration with AVL, which has designed engines for major brands like Rolls Royce, Mercedes, BMW, and many more. Nearly all modern vehicles have technology developed by AVL."
TECO 2030's Participation in Groundbreaking Projects
Concerning the various projects TECO 2030 is involved in and how they contribute to the green transition, it turns out that the first project that will soon be operational is in collaboration with Implenia, one of Europe's leading construction companies. They are currently working on major projects in Norway, such as the Fornebubanen and E39 on the Norwegian west coast. The goal of the collaboration, from TECO 2030's side, is to create an emission-free construction site. Implenia already has electric machines powered by diesel generators, but these are to be replaced with hydrogen fuel cell generators. "We have received support of about 20 million kroner from Enova for this project. Our next major project is with HyEkoTank, supported by Horizon Europe and Shell. This project will implement 2.4 megawatts of fuel cells onboard a ship, which will allow it to operate exclusively on hydrogen. Furthermore, we are in discussions with 85 other potential projects, and although we do not expect all to enter into a contract with us, there are many exciting opportunities on the horizon," Enger explains.
So their main focus is on the fuel cell module you are developing in collaboration with AVL?
Enger replies, "Yes, that's correct. Our main goal is to produce a 100 kW stack and a 400 kW module, equivalent to 535 horsepower, in large quantities. This module can be integrated into a variety of applications, from ships to land-based construction, trucks, mining, aviation, data centers, and more. The stack is the heart of the module and has the potential to revolutionize many industries."
TECO 2030's Universal Hydrogen Engine
The potential for TECO 2030's hydrogen engine and how it can be used in various sectors is the question. TECO 2030's stacks can be employed in a range of applications, whether in the maritime sector, mining, trucks, aviation, and so on.
Enger explains that TECO 2030 has already received a preliminary approval from DNV (Approval In Principle) and expects full approval by the summer of 2024. "When a product is approved for the maritime industry, it means it is also approved for other industries, given the stringent requirements of the maritime sector," says Enger and continues.
"It is much more difficult to get a product designed for another industry approved for maritime use. This is due to the high standards in the maritime sector."
This is one of the reasons why they primarily focus on the maritime industry and Enger says they have always targeted the maritime industry. "Now that our stack is designed for this market, others from high-tech sectors can potentially use our stack in their applications, such as in aviation. Once a product is approved for maritime use, it can be easily adapted for other industries with less stringent requirements. With the maritime approval in hand, our product can be used almost anywhere. And as we scale up, I don't think many would want to make major changes, because it's already so efficient," continues Enger.
TECO 2030's Challenges and Future Prospects
In the interview, Tore Enger discussed the challenges TECO 2030 is facing, as well as the company's future prospects and funding strategy.
On the challenges TECO 2030 anticipates moving forward, Enger responds, "We are unsure of when the large demand will come, so we need to adjust our speed accordingly. If we had 400 megawatts of fuel cells in stock now, we wouldn't have customers for them. This transition will take time. Even with estimates from Citigroup and McKinsey predicting an annual need for 50 megawatts by 2030, we in the industry have a long way to go to meet this demand. Toyota is the only major fuel cell manufacturer today, and although they have a production capacity similar to our future capacity, they focus mainly on the automotive industry. The maritime industry is unique and requires specialized solutions."
Are you optimistic about the future?
Enger replies, "Absolutely. Every day brings us closer to a breakthrough. I recently attended a large expo in Abu Dhabi, ADIPEC, and it's clear that the green transition is underway. There's a lot of interest in technologies like fuel cells, hydrogen, ammonia, and methanol. When ammonia is broken down, hydrogen becomes available in many places around the world."
Enger says they plan to finance TECO 2030 until the company is self-sustaining, under the same strategy they have used. "So far, we have regularly issued new shares. It's my task to engage investors and ensure continued funding," explains Enger.
Through the conversation with TECO 2030, it becomes clear that the company is dedicated to driving the maritime industry towards a greener future. With a host of innovative projects on the horizon, from emission-free construction sites to groundbreaking hydrogen engines, TECO 2030 is at the forefront of the green revolution. While challenges lie ahead, the optimism and commitment to a sustainable future are evident. With support from global initiatives and strategic partnerships, TECO 2030 believes they are well-positioned to play a central role in the forthcoming industrial transformation.