Environment

Maersk spends $1.4 billion on ships that can run on ‘carbon neutral’ methanol

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Chris Ratcliffe | Bloomberg | Getty Images

Danish firm Maersk said Tuesday it is ordering eight large, ocean-going vessels able to run on what it called “carbon neutral methanol.”

The world’s largest container shipping firm said the vessels would be built by South Korea’s Hyundai Heavy Industries and have the capacity to carry around 16,000 containers. According to a number of reports, each ship will cost $175 million, making the total cost $1.4 billion.

In a video message, Morten Bo Christiansen, Maersk’s head of decarbonization, said the vessels would “hit the waters from early 2024.” He added: “Once they are all out there sailing on green methanol, they will save a million tons of CO2 every year.”

Maersk said the ships would have a dual fuel engine set up, a feature which increases costs. “Additional capital expenditure … for the dual fuel capability, which enables operation on methanol as well as conventional low Sulphur fuel, will be in the range of 10-15% of the total price,” it said. Its agreement with Hyundai Heavy Industries has an option for four extra vessels in 2025.

While the Danish shipping giant said it would run the vessels “on carbon neutral e-methanol or sustainable bio-methanol as soon as possible” it also acknowledged there were issues to overcome.  

“Sourcing an adequate amount of carbon neutral methanol from day one in service will be challenging, as it requires a significant production ramp up of proper carbon neutral methanol production,” Maersk said.

In simple terms, “carbon neutral” means CO2 emissions are offset by an equal amount of CO2 removal. If something is carbon negative, it means more CO2 is removed from the atmosphere than emitted.

Tuesday’s announcement comes a few days after Maersk said it had secured a supply of “green” e-methanol for what it described as “the world’s first container vessel operating on carbon neutral fuel.”

It said Denmark’s European Energy and its subsidiary, REintegrate, would set up a facility to produce carbon neutral e-methanol for use in a vessel designed to operate on it. The plant would then produce approximately 10,000 metric tons of e-methanol used by Maersk’s ship every year.

The e-methanol will be made using renewable energy and biogenic carbon dioxide, with production of the fuel for Maersk slated to begin in 2023. The United States Environmental Protection Agency describes biogenic emission sources as “emissions that come from natural sources.”

The environmental footprint of shipping is significant. According to the International Energy Agency, in 2019 international shipping — a crucial cog in the world’s economy — was responsible for approximately 2% of “global energy-related CO2 emissions.”

With major economies around the world attempting to cut emissions in order to meet net-zero targets, the shipping sector will need to find new ways of reducing the environmental footprint of its operations.

In April, Brussels-headquartered campaign group Transport & Environment published a wide-ranging report on decarbonizing shipping. Among other things, it stressed the importance of sustainable fuels going forward.

“To achieve full decarbonisation of the shipping sector requires a new source of sustainable and renewable fuel,” its research said.

“Fuels produced by additional renewable electricity (e-fuels or electrofuels) are the only scalable solution that fits the requirements of energy dense, deployable, and clean fuels,” it added.