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METHANOLICS ANONYMOUS

Maersk can’t find enough green fuel to power its carbon-neutral ships

A Maersk container ship cuts through choppy seas.
Ritzau Scanpix/Asger Ladefoged
A Maersk container ship cuts through choppy seas.
  • Nicolás Rivero
By Nicolás Rivero

Tech Reporter based in New York

Published Last updated

On Jan. 10, Maersk confirmed that it had ordered four more carbon-neutral container ships, on top of the eight green ships it had already ordered from South Korean shipwright Hyundai Heavy Industries. The ships, which can either run on fossil fuels or a low-carbon fuel called green methanol, are set to be delivered starting in 2024.

The trouble is, Maersk isn’t sure if it can find enough green methanol to fuel its new green ships. Maersk will need over 450,000 tons of green methanol a year to run the 12 low-carbon ships it has on order. The current global output is 100 million metric tons per year.

“I’m still optimistic that we will get at least some of these big ships operating on green methanol in 2024,” Morten Bo Christiansen, head of decarbonization strategy at Maersk, said at a Dec. 8 press conference. “2025 is looking a lot better. Will we get it for the maiden journey for the first ship? I cannot promise you that.”

Instead, Maersk may be forced to temporarily run some of its eco-friendly ships on regular, carbon-emitting fossil fuels. “Since development of infrastructure and supply chains for these new fuels may be uneven at first, we need to ensure that the vessels can operate reliably while aggressively reducing emissions of greenhouse gases,” Maersk sustainability head Lee Kindberg wrote in an email.

Maersk’s methanol conundrum illustrates the chicken-and-egg problem at the heart of efforts to curb carbon emissions in shipping. There isn’t much production of green methanol because there aren’t many shipping lines running methanol-powered ships. And shipping lines have been hesitant to buy methanol-powered ships because there isn’t much green methanol available to fuel them.

Maersk is hoping to break this impasse by simultaneously buying green ships and investing in the companies that produce low-carbon fuels. If Maersk succeeds, its efforts will kickstart the nascent market for carbon-neutral ships and the green fuels that power them.

Maersk invests in green methanol manufacturing

There are two ways to produce methanol, and Maersk is investing in both. First, there’s bio-methanol, which is made by fermenting landfill and agricultural waste into alcohol. Maersk bought a minority stake in bio-methanol startup WasteFuel in September. Then there’s e-methanol, which is made by using an electrolyzer to split water into hydrogen and oxygen, and then combining the hydrogen with carbon dioxide captured from industrial plants. Maersk invested an undisclosed sum in e-methanol startup Prometheus Fuels as part of a $1.5 billion funding round in September.

Maersk announced a deal in August to buy e-methanol from Danish firm European Energy starting in 2023. Maersk’s order was enough to spur European Energy to begin building a new e-methanol plant in Denmark, which is slated to open next year.

Maersk made all of these investments with some of the $14.8 billion in profit it has made since the pandemic scrambled global supply chains and sent shipping rates soaring.

In the short term, boosting the growth of WasteFuel, Prometheus Fuels, and European Energy represents Maersk’s strategy for solving its methanol supply problems. “We know that sourcing an adequate amount of green fuel for our methanol fueled vessels will be very challenging, as it requires a significant production ramp up globally,” Christiansen said in a press release announcing the WasteFuel investment. “Collaboration and partnerships are key to scaling the production and distribution of sustainable fuels, and we look forward to doing exactly that with WasteFuel.”

But in the long term, Maersk hopes to use these investments to hurry the development of alternative fuels “not just for our vessels, but also for Maersk aviation and trucking activities,” Christiansen said. As the shipping line expands its business into every step of the supply chain, it will have to figure out how to decarbonize trucks and planes, too, if it’s going to make good on the climate goals that have become a centerpiece of its identity as a sustainability-focused shipping line.

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