Voices
One of the safer bets we can make is that Ireland will still be an island in 20 years. Accordingly, it makes sense that when we consider how we might capitalise on our island status, we look to the ocean. So having discussed hubs for flying things and building things, we should probably also discuss marine technology.
This hits some significant macro opportunities, particularly transport and energy. Sea farming can also potentially come into play, but not how one might think.
Crunchbase estimates that there are only 328 marine technology companies globally, so this comes across as an under-serviced industry rich with potential.
We also have some wonderful resources in place to make it happen, such as the Lir National Ocean Test Facility in Cork as part of the Centre for Marine and Renewable Energy Ireland (MaREI), opened in 2015, and the Smartbay initiative in Galway Bay, an offshore testing site opened by the Marine Institute in 2012.
So a lot of the things we need to make an impact already exist on the Island. The Lir facility provides an indoor testing facility with four different wave tanks. Then start-ups can scale up to Smart Bay for outdoor prototyping. These are genuinely world-class facilities that every country with a shore would like to have (and if you like data, I recommend checking out Smart Bay’s website)
I will be discussing Irish energy generation later this month, so I will focus on ocean transport for this article and ocean farming will also be covered in a separate article
Transport’s emissions challenge
The maritime industry is a little like agriculture in that it touches all our lives every day, but few realise to what extent. The International Chamber of Shipping estimates that the global shipping industry is responsible for the carriage of around 90 per cent of world trade.
In Ireland, this likely approaches 100 per cent of the materials we encounter in our lives. It gives pause for thought that almost everything you encounter or consume has spent time on a ship at some point. While you are reading this, there are approximately 50,000 vessels at sea transporting goods around the world.
These range from decrepit rust-buckets to modern, sophisticated vessels that can cost over €250 million to build. They generate estimated annual income over half a trillion euro in freight rates alone. The value of the goods themselves is estimated at over €9 trillion, which is probably much larger if we include the global smuggling industry.
It may come as a surprise to some that the shipping industry is already very energy efficient, contributing only 2-3 per cent of global greenhouse gases (GHG) per the IPCC. Impressive given the volume of throughput, but this somewhat masks the issues caused by a growing population transitioning to a western lifestyle. This will significantly increase demand, leading to an estimated increase in GHG emissions of 250 per cent by 2050 if the impressive efficiencies achieved to date are not continued in step with the demand increase.
The industry seems to be self-regulating in a very positive manner so far. In 2018, the International Maritime Organization (IMO) agreed to emission reductions of 50 per cent below 2008 levels by 2050. Due to the average 30 year life-span of a container vessel, to achieve a 50 per cent emission reduction, zero-emission vessels will need to be available by 2030, an incredible engineering challenge given electric vessels do not seem very feasible.
Fortunately, the IMO emission reduction target has been buttressed by the “Getting to Zero Coalition” which has signed up most of the big players in the industry, including the market leader Maersk. They seem serious and the results so far are great – this year Maersk has installed a rotor sail system that harnesses wind energy on some vessels, which they expect will reduce fuel requirements by over 10 per cent.
To quickly cover electric shipping, like aviation it makes sense for short journeys and most current applications are focusing on truck and driver-replacement by autonomously moving goods from port-to-port instead of road vehicles. To this end, the Norwegian fertiliser company, Yara International, along with the Norwegian government, have spent €27 million developing the “Yara Birkeland” vessel which can carry a relatively puny 120 containers. By way of comparison, the average container volume of the Asia-Europe ocean trade route carries over 11,000 containers and expected to grow to over 16,000 with the latest vessels.
To power this type of volume and distance, it is estimated an electric ship would need approx 100,000 tonnes of lithium-ion batteries, compared to the combined 7,000-tonne weight of fuel and engine in today’s standard designs. This implies a required ten-fold improvement in energy density technology to solve the buoyancy issue created, a significant challenge even at current improvement rates. So short-range autonomous ferries for people, vehicles and containers seem practical and of merit, but the primary market is the larger, long-distance vessels acting as economic arteries.
There is hope that hydrogen-powered engine technology is maturing at the right time to resolve the long-range issues, with the additional benefit that these can be retro-fitted into existing vessels
In an industry this size and age, optimisation is king. A tiny improvement in lubrication would massively reduce carbon emissions, fuel costs and maintenance. Route-finding software that adapts to changing conditions could have a similar effect with only incremental improvement, as could changes to hull shapes.
Looking to Ireland, retro-fittable technologies that also improve future vessels appear a good bet, as does software.
In an under-digitised industry, things that seem like they shouldn’t happen do happen. For example, approximately 1,500 containers were lost per year from 2008 to 2016 according to the world shipping council. If that sounds bad, the insurance company Allianz reported that 46 large vessels disappeared in 2018.
Ship brokerage, management and maintenance also suffer from a deficit in modern, domain-specific software, but this is improving rapidly and most of the competition is currently in this area. Impressive companies like Cargometrics are tracking down as much shipping data as they can to analyse with machine learning and offer dynamic optimisation and pricing services to the industry. They are actually working with Maersk to validate the cost-benefit of the rotor sail system discussed earlier.
Looking to Ireland, retro-fittable technologies that also improve future vessels appear a good bet, as does software. Like most under-digitised industries, getting very close to the customers and designing modern industry-focused software will likely overcome the current incumbents. General improvement in price discovery and booking for fuel, freight rates and labour would have a global market. The Boston company Sea Machines is already working on retro-fit autonomy systems for container ships, but there is no reason why they cannot be challenged.
In terms of the hardware, we already have an incredible company called XOcean who has designed a remote-piloted data collection service. It costs a third the price of equivalent operations, releases 0.1 pre cent of the CO
Given the 20 year time-line of the series, a new pre-fabricated, modular off-shore port system connected by bridge that could be added to coastal towns around the Island to facilitate short-range electric, autonomous ferry services that can transport people, vehicles and goods would be far cheaper and more environmentally friendly than any road or rail upgrade. Additionally, were these companies to link up with a prior article’s flying hub or Mana.aero, drone delivery to the shore instead of having to go to port, this would be another improvement. Partnering with offshore wind companies to develop autonomous modular wind farm deployment and/or shore-cabling would have a global market.
This would all be very expensive, but some retro-fit technology may be more practical. A smart container that can send status alerts and location would be desirable for example. The Swiss company Aeler is currently attempting this, as well as improving the container’s material for lighter weight and carbon-friendly production, though they have yet to release a product.
The Irish investment community tend to invest largely in companies that are already generating revenue. Unfortunately almost all marine tech tends to be deep tech in that the technical challenges
Lubricants have already been mentioned, and the German company Close-link has created an online marketplace for shipping lubricant. There is less activity in new lubricant development, which would seem a good fit given the pharmaceutical and chemical expertise on the Island. Improved communications and network relays will be required as the containers become more IoT-rich, and shipping lines would like to stop losing almost one large vessel per week.
Port optimisation is also a good initiative, particularly with Brexit estimated to significantly increase direct shipping routes from Dublin and Cork as vessels travel between continental Europe and Ireland instead of using the UK landbridge.
The LSE reports that checks on shipments from EU and non-EU countries in Dover take 2 minutes and 20 minutes respectively, so given all inbound cargo to the UK will need to be treated as non-EU, it is probable they will be a very willing customer for any company that can reduce port throughput time. Digital docketing systems, computer vision license plate, trailer registration and container registration control gates and weighbridges as well as a general port operating system are all things that would increase throughput speed and can be developed at low cost in Ireland.
We can see there are a lot of opportunities and not many companies seeking to seize them. We have a small number of companies, like XOcean, doing world-class things in this space. We have a fantastic platform for iterating hardware, with first the Lir facility and then the Smartbay for open ocean testing scale-up. However, we seem to be only taking on hard problems while many straightforward software problems remain unaddressed. Compared to the rest of the Irish start-up scene, it is almost like we are inverting the model where Irish startups usually focus on software instead of hardware.
This inherently holds back the industry due to cultural problems, as Ireland has a poor record on deep tech or pre-revenue investments. The Irish investment community tends to invest largely in companies that are already generating revenue. Unfortunately, almost all marine tech tends to be deep tech in that the technical challenges are profound. Due to inherent poor connectivity and the attritional nature of saltwater, anything outside of pure software tends to be very expensive. By way of example, the autonomous electric ship developed in Norway cost €27 million before it set sail. Smartbay estimates it costs €1.5-2 million to deploy a device there – and this is just to test if it is possible to scale.
So what to do?
Given the national maritime college is also located in Ringaskiddy along with the Lir testing centre and a long-established culture of sea-faring in Cork, it makes sense to have a hub there. To improve awareness of unaddressed problems as well as general education and ecosystem joined-up thinking, we should create an advisory committee consisting of all the national Port Authorities, a dominant ship owner like Arklow Shipping, an experienced port operator like Doyle Shipping Group and finally the top 10 importers or exporters in Ireland. Linking this group with the universities, the water safety bodies and the Navy in one cluster would likely lead to an explosion in problem-specific innovation.
We can then focus on retro-fit technologies for ports and vessels and the culmination of the project would be the modular port and short range, autonomous vessels.
Initially, focus would be on software-based optimisation for all sea transport stakeholders. While the cheaper software work is taking place, we can work on improving cultural attitudes as well as indigenous and FDI capital levels allocated to deep-tech investment. We can then focus on retro-fit technologies for ports and vessels. The culmination of the project would be the modular port and short-range, autonomous vessels enabling sea freighting instead of using road or rail that we mentioned earlier.
So the cautionary part of the story is here. We had most of what I mentioned above as recently as 2016. It was called the Irish Maritime and Energy Research Cluster (IMERC) and was established in 2010 to commercialise marine research. Local businesses and entrepreneurs thought it was brilliant, the Navy thought it was brilliant, it won international awards and was seen as one of the leading maritime development centres in the world at the annual Blue Tech & Blue Economy Summit in San Diego in 2016. It won the International Maritime Partner award for global leadership and activism in promoting advanced maritime research and maritime technology. The creation of a digital ocean resource was also singled out for praise and an example of long term vision.
From here on, I lean heavily on some excellent reporting from Seán McCárthaigh in the Irish Examiner. Shortly after winning the award, IMERC was shut down for being “not fit for purpose” – to this day no one really knows why. What we do know is that UCC and CIT commissioned the so-called Hannan Report to evaluate IMERC’s six years of operation. The report was described as containing “inaccuracies and unsubstantiated assertions” by the Irish Naval Service. A senior naval officer said that the flawed report could result in reputational damage for the Naval Service and for individual officers. Even though the Navy was a partner, they had no say in the decision to shut the facility.
The decision was described on social media as being “crazy”, Simon Coveney spoke out against it, as did many other prominent Irish people aware of the situation.
Andrew Parish, one entrepreneur who worked with IMERC, told the Examiner: “IMERC should have been celebrated as a shining example of the value of joint industry and academic clusters. We had this unique combination of academic research, vocational training and access to the Irish Naval Service, which had the potential to create a world-class centre of excellence for marine technology.”
The reality is IMERC was ahead of its time and we threw it away for reasons that are still not clear. We needed IMERC in 2016, we need it today, we will need it all the way through to 2040.
It seems that the report commissioned by UCC and CIT, and only representing their views, was used to shut down a world-class commercialisation facility.
Given Irish Universities continue to slide down the global rankings and their poor record of commercialising research, the obvious point here is: Should they not focus on improving education standards while those with proven expertise in commercialising research focus on the commercialisation? Is there any scenario where universities should be allowed to unilaterally shut down a commercialisation facility owned by the Irish taxpayer without a transparent explanation and full consultation with all stakeholders?
The reality is IMERC was ahead of its time and we threw it away for reasons that are still not clear. We needed IMERC in 2016, we need it today, we will need it all the way through to 2040. It was incredibly hard for IMERC to exist in the first place. The concern this episode presents is that even after all the hard work and vision has taken place, we can still mess it up.
This cannot happen in any of the hubs proposed in this series. Universities are an important stakeholder in facilities like this, but never the key decision-maker. The taxpayer ultimately facilitates all of this, so should be informed of all reports and be satisfied there is an equitable decision process.
We need IMERC back and we need to make sure that no one can shut down a technology cluster focused on commercialisation without very valid and clear reasoning. Fool the taxpayer once, shame on you…fool us twice, shame on us.
