“Plethora of Deficiencies” Gets Bulker 90-Day Ban from Australia

AMSA reports it is inspecting all of the line's ships due to an order issued in 2022 based on poor performance (file photo)

PUBLISHED MAY 31, 2023 9:06 PM BY THE MARITIME EXECUTIVE

 

The Australian Maritime Safety Authority (AMSA) banned the Panama-flagged bulk carrier for 90 days reporting that it had found a “plethora of detainable deficiencies” after a recent inspection that also resulted in a detention. According to the safety organization the vessel was identified to be a “high-risk ship,” based on AMSA’s experience with the ship’s management company.

“The Babuza Wisdom is operated by poor-performing operator Well Shipmanagment & Maritime Consultant Company. The operator’s run-ins with safety regulators in recent years have earned its fleet a detention rate which is more than five times the average for ships visiting Australian waters,” AMSA reports.

The vessel is an 18,969 dwt Small Handy built in 2009 according to operator Wisdom Marine Group of Taiwan. AIS data shows that it arrived from South Africa in Geelong, Australia on May 17 and spent eight days in port. It is currently docked in Newcastle, Australia.

According to AMSA, given the operator’s poor performance history and repeated warnings over other ships in its fleet that have been detained in recent years, the Babuza Wisdom was identified for a safety inspection upon its arrival. Since September 2022, all the company’s ships are eligible for inspection every three months as part of ongoing compliance activities. ASMA reports it will review the performance of Well Shipmangement & Marine Consultants Co. again after September 2023.

“We have repeatedly warned Well Shipmanagement & Maritime Consultant Company to ensure its ships meet the minimum international standards, and yet what we have seen is continued systemic failings which place the safety of seafarers and our environment at unacceptable risk,” said AMSA Executive Director of Operations Michael Drake.

The inspection of the bulker revealed a defective rescue boat engine, defective reserve batteries for MF and HF radio systems, and systemic maintenance and reporting failures within the implemented safety management system onboard according to the report from AMSA. The Babuza Wisdom was immediately detained when AMSA deemed the ship a “significant risk to safety and the environment.”

According to Drake, the defective rescue boat engine critically compromised the ship’s ability to respond to an emergency and on its own was cause for detention. Compounding it were the problems with MF and HF radio systems which he said means the ship had no radio backup if it lost main engine power, which he said “is a feasible scenario given its maintenance and reporting failures.”

The vessel previously was detained in Canada in November 2021 for five days after inspectors found 19 deficiencies. They reported that nine of the issues were grounds for detention, including damage to the inflatable liferafts, insufficient pressure on the emergency fire pump, and problems with the fire doors and emergency lighting. Issues were also identified with the vessel’s steering gear.

The Babuza Wisdom is the third vessel this year on which AMSA has issued a ban. A total of 18 shipping companies also have outstanding warnings from AMSA, including MSC Shipmanagement, Maersk (Safmarine), Hoegh Autoliners, COSCO Wallem Ship Management, and V Ships Shanghai. Approximately 30 ships are on the “refusal of access” list which dates back a decade.

Startup Uses Ammonia Cracking to Fuel Deltamarin Bulkers with Hydrogen

Bulker has ammonia tanks and is outfitted with a cracking technology to release the hydrogen to become fuel (PGS)

PUBLISHED MAY 31, 2023 6:44 PM BY THE MARITIME EXECUTIVE

 

A Norwegian startup company reports it has developed the technology required for ships to operate on pure hydrogen as their fuel. Pherousa Green Shipping, started this year as an offshoot of Pherousa Green Technologies (PGT), proposed to solve the challenges of storing and using hydrogen on deep-sea shipping with the installation of an ammonia cracker allowing ships to separate and use the enriched ammonia and resulting hydrogen as marine fuel.

“The only fuel that is truly zero emission is hydrogen, but hydrogen storage is the biggest challenge for deep-sea shipping. Ammonia is the only readily available hydrogen carrier that has no carbon in its molecule, therefore the only truly zero-carbon hydrogen carrier,” explains Hans Bredrup, PGT Group Chairman. “The ammonia cracking technology developed by PGT is a game changer that could become a major contributor toward the realization of the world´s zero-emission shipping.”

According to the company, the cracking system provides the next step in making deep-sea shipping truly zero emissions and allows the use of ammonia and hydrogen in a cost-efficient way. At the core of the project is PGT’s ammonia cracking technology, which allows the ship’s engines to be operated with a minimal amount of pilot fuel, providing a truly zero-emission vessel using enriched ammonia and hydrogen as fuel. The system also enables the use of pure hydrogen in PEM fuel cells instead of direct ammonia fuel cells for electric power production.

Pherousa Green Shipping reports it is in the design stage of placing an order for up to six modern green-profiled Ultramax dry bulk carriers, that will employ this technology. The initial ship design is based on an existing Deltamarin Ultramax model, adapted for the Pherousa Green Technology outfitted for ammonia. The initial fleet of six Ultramax dry bulk carriers the company says would be targeted at the worldwide copper industry, which is also moving aggressively to cut emissions.

Ongoing and advanced conversations reportedly have been held with leading international mining companies for their employment of the new ships. PGT reports it is also working actively with fuel suppliers, yards, and financiers for the development and operation of the vessels.

PGT says it will deliver the “plug and play” ammonia crackers to PGS for installation onboard the newbuilds. Working with Deltamarin, a ship design and engineering company based in Finland, they also look to further develop the concept for a long-endurance ammonia-fueled Ultramax bulk carrier. The two companies also aim to enter into a strategic partnership agreement to drive the development of ammonia technology for use within the deep-sea segment.

PGT was founded in 2020 by Vasilis Besikiotis and Tonny Thorsen. Besikiotis is an international expert in hydrogen and has a Ph.D. in the field of fuel cells and electrolysis, while Thorsen has a strong commercial background with 35 years of experience in shipping.

Stellantis subsidy likely to exceed what Trudeau gave Volkswagen: Expert

Brian Platt and Gabrielle Coppola, Bloomberg News

Stellantis NV is likely to receive more in subsidies for a new electric-vehicle battery plant in Canada than the $13 billion Volkswagen AG extracted for a similar project, according to an expert who has crunched the numbers.

Stellantis and South Korean partner LG Energy Solution Ltd. announced the factory in Windsor, Ontario last year, but have halted construction while they negotiate more financial aid from Prime Minister Justin Trudeau’s government. The companies are seeking the equivalent of what they would receive under the Inflation Reduction Act if they located the plant in the U.S.

Justin Trudeau speaks at a Stellantis facility in Windsor, Ontario last year. Across the border from Detroit, the city is a key hub of Canada’s auto industry.

That means the price tag to Canada for the plant may reach as much as $19 billion over a decade, said Johns Hopkins University professor Bentley Allan — even larger than the package Canada signed to lure Volkswagen.

“That’s just what the math says,” Allan, a political scientist who has studied the Inflation Reduction Act and how the subsidies compare to Canadian policy, said in an interview. “If you take Stellantis’s public announcements, and you calculate it by the full value of the IRA for cells and modules, you get $19 billion.”

But there are factors that may allow Canada to bring the cost down, Allan said. For example, a recent budget measure by Trudeau’s finance minister to create investment tax credits will help offset equipment costs for the factory.

The reason the plants are so expensive is that U.S. legislation signed into law by President Joe Biden last summer offers to subsidize the production of battery cells, not merely the capital costs of building and equipping a new plant.

U.S. INCENTIVES

Although the Stellantis-LG facility would be smaller than the proposed Volkswagen plant at full capacity, the companies plan to start production next year — three years earlier than Volkswagen’s projected start date of 2027 for its facility in St. Thomas, Ontario.

Depending how quickly the German auto giant builds out its full plant, it may take years for Volkswagen to pass Stellantis in factory output, Allan said. The Inflation Reduction Act starts phasing out its battery plant subsidies in 2030, dropping them entirely by 2033, though future administrations could change that schedule.

The Volkswagen deal has received criticism from some economists in Canada, given the 10-year cost estimate. A majority of the population supports it, however, according to a recent poll by Nanos Research for Bloomberg News.

It’s unclear how the Canadian public would view a second deal with an automaker that’s even more expensive.

The bulging price tag may explain why Trudeau’s cabinet has sparred with Ontario’s government over how much the latter is contributing to the Windsor project, which is expected to cost $5 billion.

Canadian and Ontario government officials have repeatedly said they’re confident they will reach a deal to keep the plant in Windsor, despite warnings from Stellantis and LG that they’re considering alternate sites.

In April, the CEOs of the two companies sent a letter to Trudeau stating his government had committed in writing to match the IRA incentives but they were still waiting for a signature on a “special contribution agreement” finalized in February. “The continued delay in executing this agreement is bringing significant risk to the project,” they said.

But Stellantis also has an incentive to stick with Canada. Relocating the 45 gigawatt-hour factory, which is supposed to reach full capacity by 2025, could delay plans to catch up to rivals in the EV race and introduce more than 75 fully electric models by 2030.

When the plant was announced in 2022, the provincial and federal governments committed about $1 billion in public funding for capital costs, according to Ontario’s premier and the Canadian Press.

Despite the cost to Canada’s treasury of competing with the U.S. on battery plant subsidies, Trudeau and Champagne have publicly mused that the country could still secure one or two more electric-vehicle battery plants in the near future.

'Strive harder': Amazon workers protest company's climate impact, return-to-office mandate

Ed Komenda, The Associated Press

SEATTLE (AP) — Telling executives to “strive harder,” hundreds of corporate Amazon workers protested what they decried as the company's lack of progress on climate goals and an inequitable return-to-office mandate during a lunchtime demonstration at its Seattle headquarters Wednesday.

The protest came a week after Amazon's annual shareholder meeting and a month after a policy took effect requiring workers to return to the office three days per week. Previously, team leaders were allowed to determine how their charges worked.

The employees chanted their disappointment with the pace of the company's efforts to reduce its carbon footprint — "Emissions climbing, time to act” — and urged Amazon to return authority to team leaders when it comes to work location.

They also objected to recent layoffs. The company has cut 27,000 jobs since November.

Wearing a black pirate hat and red coat, Church Hindley, a quality assurance engineer, said working from home allowed him to live a better, healthier life.

“I’m not suited for in-office work,” Hindley said. “I deal with depression and anxiety, and I was able to get off my anxiety medication and start living my life.”

In a statement, Amazon said it supported the rights of its workers to express their opinions.

As of Wednesday morning, more than 1,900 employees had pledged to walk out around the world, with about 900 in Seattle, according to Amazon Employees for Climate Justice, a climate change advocacy group founded by Amazon workers.

Many were participating remotely, but hundreds gathered at the Amazon Spheres — a four-story structure in downtown Seattle that from the outside looks like three connected glass orbs.

Amazon, which relies on fossil fuels to power the planes, trucks and vans that ship packages all over the world, has an enormous carbon footprint. Amazon workers have been vocal in criticizing some of the company’s practices.

In an annual statement to investors, Amazon said it aims to deploy 100,000 electric delivery vehicles by 2030 and reach net-zero carbon by 2040. But walkout organizers contend the company must do more and commit to zero emissions by 2030.

“While we all would like to get there tomorrow, for companies like ours who consume a lot of power, and have very substantial transportation, packaging, and physical building assets, it’ll take time to accomplish,” Brad Glasser, an Amazon spokesperson, said in a statement.

Glasser said there has also been a good energy on the company’s South Lake Union campus and at its other urban centers since more employees returned to the office. More than 20,000 workers, however, signed a petition urging Amazon to reconsider the return-to-office mandate.

“As it pertains to the specific topics this group of employees is raising,” Glasser said, “we’ve explained our thinking in different forums over the past few months and will continue to do so.”

In a February memo, Amazon CEO Andy Jassy said the company made its decision to return corporate employees to the office at least three days a week after observing what worked during the pandemic. Among other things, he said senior leadership watched how staff performed and talked to leaders at other companies. He said they concluded employees tended to be more engaged in person and collaborate more easily.

In a note asking Amazon employees to pledge their participation in the walkout, organizers said Amazon “must return autonomy to its teams, who know their employees and customers best, to make the best decision on remote, in-person, or hybrid work, and to its employees to choose a team which enables them to work the way they work best.”

The walkout follows widespread cost-cutting at Amazon, where layoffs have affected workers in advertising, human resources, gaming, stores, devices and Amazon Web Services, the company’s cloud computing division.

Like other tech companies, including Facebook parent Meta and Google parent Alphabet, Amazon ramped up hiring during the pandemic to meet the demand from homebound Americans who were increasingly shopping online to keep themselves safe from the virus.

Amazon’s workforce, in warehouses and offices, doubled to more than 1.6 million people in about two years. But demand slowed as the worst of the pandemic eased. The company began pausing or canceling its warehouse expansion plans last year.

Amid growing anxiety over the potential for a recession, Amazon in the past few months shut down a subsidiary that’s been selling fabrics for nearly 30 years, shuttered Amazon Care, its hybrid virtual, in-home care service, and closed Amazon Smile, a philanthropic program.

Bombardier challenges Boeing for Canadian military jet contract

Mathieu Dion, Bloomberg News

A Canadian order for military surveillance aircraft that was expected to go to Boeing Co. is facing a late challenge from home-grown private-jet maker Bombardier Inc., which has summoned nationalism to press its case for a rival model.

Bombardier is pushing the Canadian Department of National Defence to consider an adapted version of its Global 6500 business jet instead of going with up to 16 Boeing P-8A Poseidon multi-mission aircraft to replace the government’s 40-year-old fleet of CP-140 Aurora planes. The problem is that the Bombardier alternative exists only on paper.

Bombardier, which builds jets for billionaires and charter operators, called for an open procurement process as it tries to jumpstart a new defense business. This month, the Montreal-based company announced a collaboration with General Dynamics Corp. to develop military systems on the Global 6500 platform.

“Our government has been led to believe there is undue urgency to purchase now,” Mark Masluch, a Bombardier spokesman, said in an email. “This is simply a fallacy designed to sell an end-of-the-line product. Bombardier is putting forward a modern, next-generation platform, made in Canada by Canadians.”

Boeing is hitting back. The P-8 — itself a modified version of Boeing’s 737 commercial jetliner — has “unmatched” command, control and communications, as well as anti-submarine warfare capabilities, Ted Colbert, chief executive officer of Boeing’s Defense, Space and Security unit, said in an interview.

It’s widely used by the US and its allies to monitor submarines and other activity. The aircraft is in service or contracted with eight countries, including the U.K. and Germany.

The 6500 “is not a matched rival,” Colbert said. “The P-8 is the most affordable solution available to Canada because it is truly a non-developmental off-the-shelf solution.”

In an hour-long event in Ottawa on Tuesday, the U.S. planemaker and its suppliers, including CAE Inc., General Electric Co. and Honeywell International Inc., defended the P-8 and extolled the economic benefits for the country. Every P-8 aircraft contains more than $11 million of Canadian content, according to Boeing.

So far, the Canadian government has shown little interest in Bombardier’s proposal. Still, an analysis is underway.

“The government has determined that the P-8A Poseidon is the only currently available aircraft that meets all of the Canadian multi-mission aircraft operational requirements,” it said.

With assistance from Julie Johnsson.

Plant-based meat predicted to rebound as it gets cheaper and tastier

Tatiana Freitas, Bloomberg News  May 30, 2023

Impossible Burger plant based meat cooks on a grill during the Impossible Foods Inc. grocery store product launch in Los Angeles, California, U.S., on Friday, Sept. 20, 2019. The Impossible Burger made its retail debut at 27 Gelson's Markets locations in Southern California before expanding its retail presence in the fourth quarter and in early 2020, the company said in a statement. Photographer: Patrick T. Fallon/Bloomberg , Bloomberg

A maker of veggie burgers and plant-based meat products backed by a multinational joint venture expects demand for fake meat to resume its exponential growth as food inflation eases and products improve.

PlantPlus Foods Chief Executive Officer John Pinto said his company sees global sales of plant-based food surging to US$30 billion in a decade, after stalling in recent years around the $2 billion mark. His company is a joint venture between Brazilian meat giant Marfrig Global Foods and U.S. agribusiness Archer-Daniels-Midland Co.

Plant-based burgers and sausages are struggling to compete with the real thing due to their higher cost and waning consumer curiosity. To reignite growth, companies will have to increase their products’ variety, taste and nutrition, Pinto said. They also need to lower costs and sell cheaper products, he added.

“Plant-based consumption has slowed down due to the macroeconomic scenario and all the supply-chain hurdles that all the food sector faced over the past years,” Pinto said in interview. “We see this moment as a chapter on the sector’s expansion process.”

Plant-based foods that mimic the taste and feel of meat have in particular lost ground after an initial period of rapid growth. U.S. sales of refrigerated alternative meat products slumped 18 per cent in dollar terms and 20 per cent by volume during the 52 weeks ending May 21, according to data from Circana, which tracks market data. Euromonitor, another provider of market data, projects global sales of meat and seafood alternatives reaching $11 billion in 2027.

Some competitors haven’t been able to keep investing amid the recent slump and may be forced out of the market, Pinto said. JBS SA, the world’s largest meat supplier, last year announced it was discontinuing operations at Planterra, its U.S. plant-based business, amid softening demand. The company is still producing plant-based meat in Brazil and Europe.

Nonetheless, companies that have made a “long-term bet on plant-based will keep investing to develop the category,” Pinto said.

Chicago-based PlantPlus Foods is 70 per cent owned by Brazil’s Marfrig, the world’s second-largest beef producer, while the crop trader ADM owns the rest. The company owns the Hilary’s brand, which makes veggie burgers, and Canada’s Sol Cuisine, which makes plant-based versions of hamburgers, meatballs, chicken and fish.

After spending about $140 million in 2021 to buy Sol Cuisine and Hilary’s, Pinto said PlantPlus is chasing more acquisitions to expand its portfolio of products.

In Brazil, where the company supplies plant-based burgers to Burger King, PlantPlus announced earlier this month a partnership with BRF SA, one of the nation’s biggest food companies, to boost its portfolio of products to almost 30 items, including frozen vegetables and veggie meals in addition to fake meat products.

--With assistance from Deena Shanker.

CRYPTO CRIMINAL CAPITALI$M

Binance discloses investigation by Canadian securities regulator

Emily Nicolle, Bloomberg News

Crypto exchange Binance Holdings Ltd. said it has received an order from one of Canada’s securities regulators to investigate whether the platform attempted to find a way around local regulations and compliance controls while seeking approvals in the country.

The Ontario Securities Commission served the world’s largest digital asset exchange with an investigation order on May 10, the platform said in a filing this month with the Capital Markets Tribunal. Two days later, Binance announced it would be withdrawing from the market, citing new regulatory guidance related to stablecoins and investor limits.

The OSC’s order authorized “an extremely broad inquiry into whether Binance may have taken steps to circumvent Ontario securities law and compliance controls in relation to Binance.com or engaged in conduct contrary to Ontario securities law and/or the public interest,” Binance’s legal representation Borden Ladner Gervais LLP said in the filing.  

Binance has faced increasing regulatory and legal scrutiny in multiple jurisdictions over the last few years, most recently finding itself and its Chief Executive Officer Changpeng Zhao on the receiving end of a lawsuit by the U.S. Commodity Futures Trading Commission. While the details of the order were not immediately publicly available, Binance said the OSC had relied on the CFTC’s lawsuit as its impetus. 

When asked why Binance had opted to leave the Canadian market, Zhao, who is a Canadian citizen, said in a Twitter Space on Wednesday that he no longer believed it was possible to operate a “viable business” there from a costs perspective after the new regulations were enforced.

The OSC has since sent summons to Binance to supply documents for the investigation, which Binance argued earlier this month that it could not comply with as the summons was not specific enough on what was required. The Capital Markets Tribunal ordered Binance to comply with the summons at a May 26 hearing, according to a filing published on Monday.

“The OSC has made a request to access virtually limitless private data in the hope they may find something untoward,” a Binance spokesperson said in an email on Wednesday, adding that it viewed the order as “ungrounded.” A spokesperson for the OSC said the regulator will address the application later this week, without confirming whether Binance had complied with the summons as requested.

Canada’s move to impose toughened rules on crypto companies in the wake of trading platform FTX’s collapse last year has caused several major exchanges to withdraw from the market, including OKX and Bybit. Others, such as Coinbase Global Inc., have opted to stay in the country and pursue registration under the new rules.

Binance had separately argued that the OSC’s investigation order should be revoked because of a settlement agreement that the two signed in 2022 relating to its activities in the country, the filings showed. The agreement promised that the OSC would not bring further investigations against Binance while it was seeking registration, the exchange said.

In its decision on the case last week, the Capital Markets Tribunal said Binance must publicly declare the nature and content of the investigation order and what information it had been summoned to provide. 

A further hearing on the issue of jurisdiction will be held on June 2, the Tribunal said. Binance has steadily sought registration in multiple locations across the world over the last two years, including France, Japan and Dubai, without designating any site as its official headquarters. In the Canadian filings, Binance said it was incorporated and carries on business via a registered office located in George Town, Cayman Islands. 

QUE.INC.

Quebec premier announces Michael Sabia as new CEO of Hydro-Quebec

The Canadian Press

Quebec's government has officially tapped Michael Sabia as the next head of Hydro-Quebec. Sabia responds to a question at the Public Order Emergency Commission, Thursday, November 17, 2022 in Ottawa. , THE CANADIAN PRESS/Adrian Wyld

Quebec's government has officially tapped Michael Sabia as the next head of Hydro-Quebec.

In a tweet, Premier François Legault announced Sabia would serve as president and CEO of the Crown corporation, succeeding Sophie Brochu.

Legault says Sabia "is an experienced man who will be able to pursue and overcome the challenges of Quebec's energy transition," according to a translation.

Sabia has served as Canada’s deputy minister of finance since 2020.

Prior to that, he worked at the Department of Finance and the Privy Council Office before joining the private sector.

He is a former chief executive of the Caisse de depot et placement du Quebec and a former chief executive of BCE Inc.

In a statement, Finance Minister Chrystia Freeland said that as deputy finance minister Sabia "helped steer the Canadian economy through one of the most challenging moments in our history." 

Brookfield emerges as frontrunner for network as CVC recedes

Dinesh Nair and Aaron Kirchfeld, Bloomberg News

The Network International Holdings Plc headquarters in the Al Barsha district of Dubai, United Arab Emirates, on Thursday, April 20, 2023. Brookfield Asset Management Ltd. has submitted a £2.1 billion ($2.6 billion) takeover proposal for Middle Eastern credit card processor Network International, topping a rival buyout consortium. Photographer: Christopher Pike/Bloomberg , Bloomberg

Brookfield Asset Management Ltd. has emerged as the frontrunner to acquire London-listed Network International Holdings Plc after interest from a consortium backed by CVC Capital Partners cooled, according to people familiar with the matter. 

The Canadian investment group, which is in advanced negotiations with the Middle Eastern credit card processor, may be granted a short deadline extension on Thursday to finalize a formal offer, the people said. Buyout firm CVC and its partner Francisco Partners are not keen to engage in a bidding war for the business, they said, asking not to be identified discussing confidential information.

Brookfield made a preliminary offer of 400 pence per share for the company in April, valuing the business at £2.1 billion (US$2.6 billion) and topping an earlier 387 pence proposal from CVC and Francisco Partners. Network International extended a deadline for firm bids to June 1 and the Canadian bidder may be given about another week to reach a deal, according to the people. Deliberations are ongoing and talks could still fall apart, they said.

Shares in Network International have risen 23 per cent this year, giving the company a market value of about £1.9 billion. The stock was mostly unchanged in London on Wednesday.

Brookfield has an existing presence in the industry and has been an active investor in the Middle East. Last year, an arm of Brookfield bought control of First Abu Dhabi Bank PJSC’s Magnati payments unit in a deal valuing the operation at as much as US$1.15 billion. The potential synergies have given the Canadians an advantage over the buyout competitors, the people said.

Representatives for Brookfield, CVC and Network International declined to comment. A representative for Francisco Partners wasn’t immediately available for comment. 

AI is hot right now, but it's also being used to cool down buildings

Indira Kannan, BNN Bloomberg

An employee for EcoPilot Canada works on an HVAC system. (EcoPilot Canada)

With the approach of summer and a steady growth in the return of workers to offices, artificial intelligence could be an emerging solution in the space of heating, ventilation and air-conditioning (HVAC) systems for buildings.

While industrial, transport and agricultural emissions are visible and well known, buildings worldwide are among the top five emitters of greenhouse gases, estimated to account for well over a third of global energy-related carbon emissions, according to the World Green Building Council. The International Energy Agency says energy use in buildings makes up a third of global final energy consumption, with space cooling seeing the largest increase in demand in 2021.

Sam Ramadori, CEO of the Montreal-based BrainBox AI, says, “Cars have a natural replacement cycle. The problem with buildings is that they are there already, they have a super long life and each of them is unique. Right away the big problem is how do you, at scale, make a massive reduction in energy consumption in the millions of buildings around the world.”

Companies like BrainBox AI are now using AI to make HVAC systems more predictive and intelligent. The AI-driven systems use numerous factors including outside weather, forecasts, the type and cost of energy being used at different times, emissions from that energy, and occupancy to optimize a building’s energy usage and to lower emissions.

“What’s exciting is this brain that you can plug into the building and say well, 'I know more than just what the thermostat is saying, I know that today it starts out being sunny and then it’s going to be cloudy in two hours, so why do I need to air-condition the rooms aggressively when I know they’re going to cool down naturally?' That brain up there that sits on every building we install in, that’s an entirely new capability that’s only possible with autonomous AI.”

EcoPilot Canada, the Halifax-based subsidiary of a European company, also uses cloud-based AI systems to connect to a building’s HVAC automation system.

“Our system harnesses the thermodynamics of a building, helping to store energy and use only what’s needed,” says Jennie King, general manager at EcoPilot Canada.

EcoPilot Canada mostly caters to large commercial, institutional or residential buildings; its clients include Crombie and Minto Group. Brainbox AI’s customers include big-box and multi-site retailers like Sleep Country and SAIL, among around 750 buildings in 20 countries.

HRAI is the largest trade association for Canada’s HVAC industry, with its 1,200 members across the country contributing $12-14 billion to Canada’s GDP annually. Sandy MacLeod, president and CEO of HRAI, says the role of AI is evolving, and not in use aggressively in the industry yet, but notes his sector is critical for the government to meet its net-zero goals. MacLeod says he met officials with the City of Toronto in February to drive home his message: “If you really want to drive change, tackle government buildings first.”

For instance, the City of Toronto has set itself a target to go net zero on greenhouse gas emissions by 2040. MacLeod points out that over 70 per cent of the city’s buildings need to become energy efficient to meet this goal, but the retrofitting process covers only one per cent of this footprint every year.

“AI will be part of the retrofit model to improve efficiency,” he says. “AI will become more common in this sector in the next three-five years.”

At present, the HVAC industry is struggling to keep up with demand with a shortfall of workers so that “AI often becomes an afterthought,” says MacLeod.

As various sectors ramp up to meet or prepare for stricter emission standards, demand for AI-driven HVAC systems is booming as well. King says EcoPilot Canada has had to hire more staff to keep up with demand.

“The Canadian market is undergoing exponential growth,” she says. “Last year was about creating awareness. Earlier we contacted companies, but now for the first time we’re getting enquiries.” Several REITs who are their customers are expanding use of the AI-driven systems.

Many experts have recently raised concerns about the growth and potential dangers of AI. However, the HVAC industry does not foresee trouble on this front. Brainbox AI’s Ramadori says his company is a strong supporter of regulation.

“In our field it’s difficult to think about truly dangerous situations. In military situations or even cars on the road, you get into personal safety issues. In our case – what if I make your building really cold and you have to leave the building – it’s not a great outcome, but no one’s dying.”