Danish conglomerate agrees to buy into 730,000 tonnes green methanol from 2025 for its future fleet
AP Moller Maersk has signed contracts to get hold of “at least” 730,000 tonnes of green methanol annually by 2025. The Danish conglomerate published a table showing agreements with six companies to produce either e-methanol or bio-methanol for the company which has signed contracts to have 12 methanol fuelled ships built as part of its transition to net zero.
The companies listed are CIMC ENRIC and GTB (green Technology Bank) in China, as well as Orsted, Proman, Wastefuel (part owned by Maersk) and European Energy as providers.
These companies are not yet producing the required fuel, but the shipowning giant noted in its press release that it sees these contracts for the future as key to getting its transition underway.
Maersk's green methanol production capacity estimation
When methanol is burned in a ship’s engine it will still produce carbon dioxide emissions, which are a key greenhouse gas and subject to future regulations, but for it to be seen as a net zero fuel, it is the production process that is key to Maersk and others decarbonisation claims.
Today methanol is mainly produced though the reformation of natural gas or from coal gasification. The International Energy Agency estimates that about 80m tonnes is made annually (2020). E-methanol and bio-methanol effectively use recycled CO2 in the production process.
Bio-methanol can be formed through one of two pathways, anaerobic digestion, and gasification, while e-methanol is formed by the use of green electricity being used in a power-to-gas pathway where the electricity.
Grey (produced from hydrocarbons) methanol is already being used as a marine fuel (Stena Germanica and various methanol carriers).
Maersk’s fuel bet
The Danish giant has ordered 12 new vessels to be built that will have dual fuelled capabilities ( a hedge in the companies fuel bet allowing the vessels to fall back on conventional fuels if prices are too high or availability short). This methanol powered orderbook includes feeder vessels of around 2,000 teu a piece and eight 16,000 teu vessels.
The company announced that the vessel designs will compensate the loss of fuel space and energy density, although the placement of the accommodation so far forward has come under criticism, especially when owners and managers talk about the importance of crew welfare. Living quarters towards the bow of the vessel will be subject to more movements, especially violent movement, in bad weather, compared to the more accepted placement towards the stern of a ship.
The first of these vessels is due for delivery as early as 2024. When Maersk has said the vessels will run on “carbon neutral methanol as soon as possible” an indication that conventional fuels and grey methanol could be part of the initial fuel mix. The contracts for 730,000 tonnes green methanol by 2025 are more than enough for the vessels it has on order the company added.