Digitized, net zero ships at the core of Fincantieri’s new business strategy

Italian shipbuilder Fincantieri has laid out its strategy for the upcoming period putting a major focus on building up its competencies in the construction of digital and net zero ships.

The company’s 2023-2027 Business Plan aims to create greater synergies between the company’s cruise, defense, and specialized offshore shipbuilding units to improve productivity and efficiency thus further strengthening its competitiveness.

The shipbuilder expects robust growth in its core business in the upcoming period, driven by naval and offshore as well as consolidation of the cruise business targeting revenues of €8.8 bn in 2025 and €9.8 bn in 2027.

The estimated return to profit builds on the anticipated recovery of the cruise sector post-covid as well as the expected increase in global defense budgets driven by the ongoing geopolitical developments and NATO guidelines.

“Accordingly, the global defence budget allocated to the navy in 2023-2027 is set to grow, driven by Western European (+3.3%) and Asia Pacific (+4.2%) countries; a significant increase in demand for frigates, corvettes and submarines is likely,” Fincantieri said.

The Italian heavyweight plans to tap into the foreign accessible markets opportunities of up €20 bn in 2023 – 2027 involving ongoing programs for the renewal and upgrading of the Italian and US fleets as well as opportunities that may come from other EU and North American countries or the Middle East and Asia.

The cruise business has already seen a robust recovery in 2022 with CLIA’s estimation that around 28 million passengers would go on a cruise this year. With the passenger rate set to grow 6% annually until 2030, demand is expected to outstrip supply creating a need for new ships from 2023 – 2024 and thus paving the way for new orders. The new ordering wave is also expected to be driven by the need for green transition and disposal of older ships.

“As of today, the resumption of orders has already been recorded for the luxury niche segment, with newcomer operators, for medium to small vessels,” Fincantieri said.

“Business scenario will be influenced by the level of technological maturity to address emission reduction requirements as well as financial support to shipowners by Export Credit Agencies combined with the economic and geopolitical outlook.”

Finally, the shipbuilder is relying on growing demand from the offshore wind sector amid an anticipated rise in the installed capacity of offshore wind farms which is set for a fivefold increase by 2030 (from 55.2 GW to~ 271 GW) by 2030. The trend is expected to spur demand for construction service operation vessels (CSOVs), service operation vessels (SOVs), and cable-layers.

. The current CSOV and SOV fleet includes 30 vessels. By 2029 over 150 vessels are deemed to be ordered in 2023-27, Fincantieri said.

Moving forward, the shipbuilder has set forth key steps in order to move to the production of zero-emission ships by 2050, which include technological improvements to cut energy consumption, new fuels and innovative propulsion technologies such as fuel cells and batteries, and developing ship operations in line with net-zero targets with more frequent bunkering and lower cruising speed.

The company believes digitalization has a massive role to play in the future to generate
higher efficiencies in operations, engineering, and procurement as well as design and data analytics.

Fincantieri anticipates that by 2050, all cruise ships will become fully autonomous and directly connected to the rest of the fleet with green technologies such as air lubrication, propulsion systems, berthing, and loading fully automated or remotely controlled.

With regard to its roadmap to zero, the company expects the first LNG vessel with a dual-fuel combustion engine and air lubrication system to be delivered in 2024 followed by a high-efficiency LNG vessel set for delivery in 2025.

The first local zero-emission small vessel with hydrogen fuel cells and batteries is slated for delivery in 2026, and in 2027 the first LNG vessel with zero-emission in-port capability will follow suit enabled by fuel cells and batteries. The 2030s will be characterized by ships with minimal emissions in port enabled by dual-fuel engines combined with batteries and fuel cells and they are expected to have 61 lower CO2 tank-to-wake emissions when compared to 2008 levels, followed by net zero ships powered by alternative fuels in 2050.