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How kites can save the planet – or the shipping industry

Shipping is a growing source of greenhouse gas emissions, with the global shipping industry producing a staggering one billion tons of emissions annually, according to the European Commission.

But in Germany, one company has designed an ingenious system to help large ships become more energy efficient—using kites.

SkySails has developed what it describes as a "kite wind propulsion" system for large cargo ships.

The company, which was was founded in 2001 and employs around 40 people, is based in Hamburg in northern Germany, which is a major port city connected to the North Sea via the Elbe River.

Copyright SkySails

"The idea is quite simple: With kites you can gain much more thrust than with any other wind-harnessing device," Stephan Wrage, CEO and co-founder of SkySail, told CNBC in a phone interview.

"It's much more powerful than a traditional sail, and it's also more powerful than a traditional wind turbine" he added.

Wrage, an industrial engineer by training, told CNBC that it costs between 1.5 million and 2.5 million euros ($1.7 million-$2.8 million) to install the kite-wind propulsion system.

According to SkySails, one kilowatt hour of their wind power costs only six cents for ships to use, "about half as much as one kilowatt hour from the main engine."

Wind power is becoming an increasingly popular – and renewable – source of energy. According to the European Wind Energy Association, the first six months of 2015 saw 584 offshore wind turbines connected to the grid, a 200 percent increase compared to the first half of 2014.

In addition, SkySails said its technology is able to generate 25 times more energy per square meter than conventional sail propulsion systems—the equivalent of 2,000 kilowatts of "propulsion power in good wind conditions."

Wrage added that the SkySails system – which operates at altitudes of between 300 and 400 meters – was able to save fuel by replacing the propulsion power that would normally be produced by, for instance, a diesel-burning engine.

"If you use a kite, then in ideal conditions you save 10 tons of oil per day," he said, adding that on average, three tons of oil could be saved per day.

Only two ships are currently using the system, which Wrage put down to the slowdown in the shipping industry in the years since the 2008 financial crisis.

"A lot of ship owners are on their knees and in that environment it's extremely difficult to sell such an innovation," he said.

With this in mind, the company has also launched what Wrage describes as "performance-optimising software for commercial vessels."

Developed by SkySails and LEMAG – a German company that specializes in making measuring instruments – the Vessel Performance Manager enables crews to optimize a boat's efficiency using real time data on everything from fuel consumption to engine performance.

Looking forward, Wrage was confident that the kite-propulsion system was a viable proposition for the shipping industry once the market recovered.

"We still deeply believe that ship owners cannot afford to waste wind in the long run," he said. "It's offshore; it's a tremendous source of energy; it's cheap."