Can you invest in maritime cleantech now? The options seem to revolved around seed funding, impact investment, or being an angel investor. But what if you don't have that much? What's on the stock markets? Not a lot it seems, but there is hope.
There are a lot of companies, a lot of projects and a lot of talk about the decarbonisation of shipping, of the need for new fuels, new systems and importantly new technologies. The news and analysis articles that appear on Fathom World daily are about companies with solutions and services that are encouraging a transition of shipping, about shipowners and operators and their appetite and caution over these solutions the regulation that shapes both sides of this coin.
But how many of these companies are listed entities for you or your pension to get behind by buying into their stock? Yes, if you have the resources you could decide to be an impact, angel or seed funder for the range of companies that have been developing the solutions you will find in Fathom World
At Fathom World we monitor the technologies that are evolving and have begun to assess the market from a private investor’s perspective, and this side of the market is perhaps not as bubbly as the technology developments and market talk would suggest.
Not the engine makers
For example, we have identified very few dedicated maritime technology companies on stock exchanges. Yes, there are technology companies with various levels of environmental solutions, and Finland-listed Wärtsilä springs to mind here with its wide range of products and tools.
MAN ES is perhaps Wärtsilä’s four stroke engine development competitor, but it is now one of over 340 subsidiaries of the Volkswagen conglomerate, which announced in its 2021 annual report that its power engineering division brought in €3,4bn in revenue, of which 2/3 were from its marine related business, mostly engine sales.
Investing in MAN ES means investing in VW, and therefore a growing range of car and truck brands.
Wärtsilä is of course no longer in the slow speed two stroke market, it sold that to the Chinese state-owned shipbuilding conglomerate CSSC and is now WIN GD.
Of course there are other giant technology firms with interests in the marine sector, such as the Korean Chaebols, but getting their stock is also not the same as investing in Greentech. Take Hyundai, now HD Hyundai -its revenue largely come from shipbuilding and other heavy construction, and even Hyundai Oilbank, a petroleum company. An investment in HD Hyundai may be profitable, but again, is it meeting ones criteria for green investment. What criteria should one have?
So large corporations do tend to have multiple subsidiaries, not all of which can be categorised as green maritime technologies or involved heavily in the transition.
So who should we put on the Fathom list?
For Fathom World we have the following companies with large percentage of revenues generated from maritime clean technology or transition services.
Some are developing one technology or solution, most are active in more than ne sector. So Powercell is active in land transport fuel cells as well as maritime. NEL is involved in hydrogen infrastructure, which does include maritime. Meanwhile there are companies like Alfa Laval, ABB and Kongsberg with a wide portfolio of services and segments, and with customers spanning different industries.
The one exception on the Fathom list at the moment is Stockholm-listed I-Tech. Not only is it more a biotech company as much a maritime cleantech company, but it’s product, Selektope, is a solution with one purpose: preventing barnacle larvae from adhering to ship hulls and increasing the risk of biofouling, performance reducing drag and invasive species.
- Powercell
- Wärtsilä
- NEL
- Ballard
- Ceres Power
- Advent Technologies
- SAGA Pure
- TECO 2030
- Wallenius Wilhelmsen
- Climeon
- iTech
Others we watch
- Alfa LAvel
- ABB
- Siements
- Technip
- Yara International
- Aker Horizons
- Kongsberg Group
Below are the stock prices of some of the main companies over the last three years:
BSEA: The only Fund available
There is one fund that has made an attempt to give investors a chance to put their money into a collection of cleantech opportunities. It is the BSEA fund (ETFMG Breakwave Sea Decarbonization Tech ETF). It is 18 months old and follows an index that was created by Marine Money for the purpose of developing the fund. The Marine Money Decarbonisation Index is a financial index and while it is labelled decarbonisation it is certainly broad in how this is interpreted. But for anyone wanting to invest it is the nearest product that is available.
The fund and index were the result of work by Breakwave Advisors and Sea/Switch Partners in New York, and has distributed returns three times in the 18 months.
Sea/Switch owner Hal Malone spoke to Fathom World for the Aronnax Podcast this week and explained the criteria for the fund and why it is, what he calls inclusive rather than exclusive.
In short, the ideal company does not yet exist. The fund contains stocks from 42 of the 45 companies on the MMDI, and includes companies that are on the periphery of the maritime decarbonisation bubble. These include companies in the offshore energy sector, such as support services for offshore wind, like Technip FMC, and also companies that are developing fuels, such as Yara International.
It is worth bearing in mind that this fund needs to invest in companies that are on large exchanges and have a large market cap to enable it to trade in them.
Things will change, are changing
The market for industrial decarbonisation will change. The startups that are developing solutions will move the TRL (technology readiness level) of their products up and will either seek added capital by considering a listing, or quite possibly allow themselves to be acquired by larger companies (a well-known exit strategy for the investors): Yara and Wärtsilä are two companies with an expanding portfolio of solutions.
Investment in maritime cleantech, probably any industrial cleantech, has to be for the long term. As fuel production shifts the oil, now energy majors, will be working to reposition themselves, though their bumper profits in 2022 and once they know it will be accepted by their shareholders.
Another avenue for smaller companies seeking the funds to go through the so called ‘Valley of Death’ as they move from investment in research and development (often through grants and funds) to commercialisation is crowdfunding, though view have been noticed int he last couple of years as budgets have shrunk.
