Uwe Lauber, CEO of MAN Energy Solutions, exclusively shares some insights with HANSA about the announced restructuring, the strategy going forward and the effect of the Corona pandemic on the energy transition in the shipping industry
What has led to the recently announced need for restructuring at MAN ES?
Uwe Lauber: The intention is[ds_preview] to ensure the future viability of the company. Extensive cost-cutting and restructuring measures are the necessary next steps on the way to the company’s transformation into a solutions provider for sustainable energy supply. In addition, the company is preparing for a prolonged period of stagnant sales as a result of the Covid-19 pandemic. We need to prepare ourselves for a market environment that will remain difficult for a long period of time. Some of the company’s key areas of business, such as the cruise ship business, have been directly affected by the economic impact of the Covid-19 pandemic and we do not expect to see a recovery to pre-crisis levels until 2023. The program is designed to address these negative market influences and make lasting improvements to MAN Energy Solutions’ ability to respond to market fluctuations.
What is your strategy going forward?
Lauber: MAN Energy Solutions announced a new strategy in 2018 to take the company from component supplier to provider of sustainable energy solutions. These new solutions are expected to account for 50% of our business by 2030. In shipping, we have publicly spoken out in favor of a »maritime energy transition« for some time now. We have a convincing track-record in developing engines running on alternative fuels, having developed the world’s first oceangoing ships driven respectively by LNG, methanol, ethane and LPG and we continue to prioritize this trend. In a similar vein, we previously made headlines with Wessels Reederei’s feeder container ship »Wes Amelie«, when we retrofitted its main engine to an MAN 51/60DF unit that enables dual-fuel operation. Further, »Wes Amelie« is prepared for part-bunker with SNG (synthetic natural gas) derived from wind energy, which would slash its CO2 emissions. We are making concrete progress.
Will this impact any capacities or programs on the »future« technology side (gas, ammonia, power-to-x)?
Lauber: The program will not impact this. Focusing our R&D investments on strategic future areas is one of the key components of the project. The successful implementation of the program is one of the keys to being able to successfully push ahead with the implementation of our strategy. Indeed, we recently announced our latest initiative in a roadmap that will end in the delivery of the world’s first ammonia-fuelled, two-stroke engine in 2024. Testing will begin next year at our Research Centre Copenhagen.
What is your particular outlook on the marine engine business?
Lauber: Inevitably, the Corona virus will have a huge effect on the world economy and a negative, knock-on effect on the marine business. To what extent is yet unknown but, more than ever, future-proof investments are going to be key for ship operators involving multi-fuel engines and a variety of alternative fuels. Already, our ME-GI and ME-LGI engines enable operation on such clean fuels as LNG, ethane and methanol. In the short term, the crisis within the tourism industry will affect us in terms of orders for cruise ships, which is a sector that may take some years to recover. In the meantime, we will use this opportunity to adjust our business model to take advantage of the maritime market as it begins to return to normal.
What effect could the Covid-19 crisis have on the maritime energy transition in general?
Lauber: We will continue our strategy and what we recommend to shipowners is that they need to consider the full fuel-flexibility in their decisions. There might not be one solution that will be applicable to the entire life of the ship and full fuel-flexibility is paramount for the shipowner to ensure that his investment is future proof. But decarbonization cannot stop with LNG or any other fossil resources and we will not stop either. To reach carbon neutrality, we need bigger CO2 reductions. We believe that the future belongs to synthetic carbon-free fuels generated from renewable energy. On this road, LNG is not a dead-end investment; it’s an investment into the future as all such engines can run on carbon-free fuels.
Is more regulation necessary?
Lauber: Looking further ahead, developing carbon-free fuels for the largest ocean-going ships will require the use of incentives and restrictions. Today, alternative fuels – when available – come at a price premium compared to dirtier, carbon-intensive fuels. A price signal established via a global market-based instrument is needed to encourage the use of carbon-free fuels.
Interview: Felix Selzer
