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Finland's Wartsila believes in shipping decarbonisation despite IMO setback

Wartsila's CEO stated on Tuesday that he still believes in the decarbonisation process of maritime traffic despite the delay in establishing a carbon price globally for shipping. The company reported a third quarter order intake below expectations.

The Finnish engineering group has invested in emission reduction technologies for power plants and ships. The company expects a higher demand for the technologies under the International Maritime Organisation climate plan.

Under pressure from the United States, however, a decision was made to delay a global shipping emission price by an entire year in early this month.

TARIFFS AND REGULATIONS IN THE US 'HEAVILY IMPACT' ENERGY STORAGE

Hakan Agnevall, a Wartsila spokesperson, said that despite the fact that quarterly orders fell by 0.7% on an annual basis to 1.79 billion euro ($2.09 billion), he had not noticed any negative effects as a result.

He said, "The journey of decarbonisation continues." "We keep selling because owners are trying to hedge their bets. "They want fuel flexibility and fuel efficiency."

Agnevall stated that Wartsila’s energy storage unit was "heavily affected" by U.S. Import duties and Foreign Entity of Concern regulations.

Last year, the energy storage unit represented 12% of sales. Agnevall, however, said that it had not received any new orders during the third quarter following the FEOC regulation which was included in President Donald Trump's "One Big Beautiful Bill Act" and banned the importation of Chinese battery cells into the United States.

Wartsila said that he is looking to source battery cells from other Asian or U.S. countries in order to mitigate the impact.

Investors had expected a higher growth rate and better prospects, particularly for orders of energy equipment.

JPM analysts in a JPM note wrote: "This could be disappointing for investors, who expected Wartsila's demand outlook to be upgraded on the potential upside of data centre orders." They were referring to Wartsila keeping its energy demand forecast unchanged.

Despite the IMO setback Wartsila left its outlook for marine unchanged and expected higher demand.

Agnevall stated that "there will be a journey towards a more fragmented landscape of regulation, as countries and regions have their own regulatory frameworks."

(source: Reuters)