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While decisions on future fuels are probably taking up much of the bandwidth of shipowners, there is also an understanding that energy efficient technologies will help to alleviate operators’ expenses. Bunkerspot speaks with Silverstream Technologies’ Founder and CEO, Noah Silberschmidt, about the role the company’s air lubrication technology will play in the shipping industry’s decarbonisation transition.

Vessel owners and operators are well aware they cannot afford to wait when it comes to charting their decarbonisation path, but the multitude of challenges they are facing remains daunting. While decisions on future fuels are probably taking up most of their bandwidth, there is also an understanding that energy efficient technologies will play a vital role in mitigating operating expenses. Among these is Silverstream Technologies’ Silverstream System air lubrication solution.

‘We are happy to say we are fuel agnostic. It doesn’t matter what fuel you’re using, we’re saving a very important percentage,’ says Noah Silberschmidt, Founder and CEO of Silverstream Technologies. ‘We work well together with other energy efficiency technologies.’

The Silverstream System shears air from air release units (ARUs) in the hull to create a uniform carpet of microbubbles that coats the full flat bottom of a vessel, thus reducing frictional resistance. According to Silberschmidt, the price premiums associated with new fuels, such as green methanol and hydrogen further down the road, means vessel efficiency becomes even more necessary.

‘Let’s not forget that all the newer fuel types are less efficient in the sense that they will take up more space to deliver the same milage – that’s sometimes forgotten,’ Silberschmidt points out. ‘One tonne of green methanol is not going to give you the same mileage as one tonne of heavy fuel oil.'

The company claims the Silverstream System saves an average of 7% on fuel consumption - and Silberschmidt is keen to emphasise the word ‘average’, suggesting that, depending on conditions, the technology is able to deliver even more reductions in fuel, emissions, and thus money.

‘I’ve seen some articles coming out about us over the last couple of months that say we save up to 7% but that’s actually not true. It’s an average [of 7%] on all operational patterns,’ says Silberschmidt.

These savings, says Silberschmidt, are verified across a range of scenarios: during operations, in ballast, whilst loaded and in all types of weather. Indeed, rather than trying to demonstrate the efficacy of its technology, the challenge for Silverstream is demonstrating how it can deliver the technology, manage supply chain issues and provide after sales services.

Silberschmidt is keen to highlight that Silverstream has managed to deliver all of its projects on time, helped in no small part by establishing an office in Shanghai to help service the business it conducts in China and elsewhere in Asia – where the majority of the company’s installation projects are carried out. Installation of the air lubrication technology ranges from $800,000 to $2 million - but with the global economic outlook appearing decidedly gloomy, should customers expect this price bracket to expand?

‘We deliver three main hardware components: compressors, air release units and control and monitoring systems,’ he explains. ‘We are a very large compressor client because already we have orders in the magnitude of 800 compressors. The prices we are getting, they are very competitive – we’re probably one of the largest buyers in the world.’

Silberschmidt continues: ‘We are producing air release units that are blowing out the air in China, Korea and Europe and I don’t think we can do that any cheaper. Yes, prices are coming up but I think we have been more or less able to keep our prices stable, in a world where everything from our main component prices to the whole supply chain and transportation [is going up].’

Like global prices, the company is also facing growing competition in the air lubrication technology sector. According to Silberschmidt, Korean yards are producing their own systems that they install at their own facilities. So, is there any concern about Silverstream’s technology being copied?

‘We have secured ourselves with a lot intellectual property – we have about 300 patents – but really we are trying to make sure that the customers get a very well-functioning product and a team at Silverstream that help them reach all their goals with their EET [energy efficiency technology] and have constant performance – or perhaps even getting better performance.’

The ratio of Silverstream’s orderbook is approximately 70% newbuilds and 30% retrofits. This tilt towards new units, says Silberschmidt, can be attributed to the fact that all existing customers, having perhaps applied the air lubrication system to existing ships, have done repeat orders when ordering new vessels.

‘We’ve done about 60-65 orders with China State Shipbuilding Corporation,’ says Silberschmidt. ‘In terms of owner type, we have done many repeat orders with Shell, MSC, and Grimaldi, for example. That obviously means that the customers are happy with what we’re doing for them; they see how it works and then they come back and buy more.’

The company has also managed to break into new vessel segments, including very large ore carriers.

‘We have Vale as a client. So, what we’re seeing now is that everyone that is in that space – dry bulk, iron ore – is looking at this [technology].’

Indeed, Silberschmidt is bullish about the company’s prospects going forward. Whereas five years ago, around one in a hundred approaches to a shipowner or operator would lead to a second conversation, these days it is around one in four.

‘I’m expecting that to develop in one or two years to being 50% of all owners that want to do something,’ he says. ‘Not necessarily to be able to do it because maybe they don’t have the funding for it - it’s easier to fund if your vessels are on long-term charters; it’s more difficult to afford it if you are tramp trading – but we’re trying to address these issues and look into how we can help.’

The capital expenditure, as demonstrated by those that have opted to invest in scrubbers, hinges on fuel prices, and in recent months these have risen sharply. According to Silberschmidt, relative to current bunker costs, an owner or operator investing in air lubrication can expect a payback period of between 2-3 years.

‘For a vessel that has 20 years remaining, it sounds like a pretty good idea,’ he says. ‘Our technology is one of the lowest hanging fruits, if they are able to fund it.’

At the end of last year, the company targeted 500 installations of its Silverstream System by 2025. Asked today if that remains the same, Silberschmidt says that somewhat ‘conservative’ figure will almost certainly be eclipsed, and that attention has now turned to something far more ambitious, but nevertheless achievable.

‘Now we are thinking about the possibility to have 4,000 installations,’ says Silberschmidt. ‘What would the year be? Well, if we look over the next 10 years to 2032, I don’t see why we won’t be able to do it.’

A lofty target perhaps but one which will be achieved, says Silberschmidt, as a result of collaborative agreements signed with several yards including Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) and more recently N-KOM, a joint venture between Nakilat and Keppel Offshore & Marine in Qatar. In addition, at the end of July, Silverstream signed a memorandum of understanding (MoU) with Mitsui & Co.

‘We’re not just trying to sell our technology, we actually engaging into strategic relationships with various, well-known dry docks and well-known partners in the industry that are extremely well-connected, and we are continuing this journey,’ says Silberschmidt. ‘Follow this space!’

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