A.P. Moller – Maersk entered an agreement Tuesday with Hyundai Heavy Industries (HHI) to build eight large dual fuel container vessels, powered by carbon-neutral methanol or very low sulfur fuel oil.
The vessels are expected to save around 1 million metric tons of CO2 emissions annually. The dual fuel capability will make up 10%-15% of the total cost of each vessel, according to Maersk, but it will also give the company more flexibility if fuel supply is limited.
The first of the eight vessels is slated to set sail in the first quarter of 2024.
The HHI-constructed vessels will have nominal capacity to haul approximately 16,000 twenty-foot equivalent units. They will replace older vessels as part of the company’s fleet renewal program.
“The time to act is now, if we are to solve shipping’s climate challenge. This order proves that carbon-neutral solutions are available today across container vessel segments and that Maersk stands committed to the growing number of our customers who look to decarbonize their supply chains. Further, this is a firm signal to fuel producers that sizable market demand for the green fuels of the future is emerging at speed,” A.P. Moller – Maersk CEO Soren Skou said in a release.
The agreement includes an option for HHI to provide an additional four vessels in 2025.
Maersk’s path to carbon-neutral methanol
The company joined The Methanol Institute in March.
In July, Maersk entered an agreement with Hyundai Mipo Dockyards to build a 172-meter-long dual fuel feeder vessel, designed to run on either e-methanol or very low sulfur fuel oil. The 2,100-TEU vessel, called Solstice, is scheduled to begin operating in Northern Europe in 2023.
Methanol is available now, and it can be used to fuel conventional ships with minor engine and storage modifications, Gregory Dolan, CEO at The Methanol Institute, told FreightWaves. However, similar to many developing alternative fuels, there is not currently a large supply of carbon-neutral methanol available.
“In pioneering this technology, it will be a significant challenge to source an adequate supply of carbon-neutral methanol within the timeline we have set ourselves,” Berit Hinnemann, senior innovation project manager at Maersk, said in a March release.
However, last week, Maersk secured the approximately 10,000 metric tons of e-methanol the Solstice will need annually to operate. Maersk is working with REintegrate, a subsidiary of Danish renewable energy company European Energy, to supply the e-methanol and construct the Danish facility.
“From our dialogue with potential suppliers, we are confident we will manage to source the carbon-neutral methanol needed” to supply the company’s additional eight vessels, Henriette Hallberg Thygesen, CEO of fleet and strategic brands at A.P. Moller – Maersk, said in the Tuesday release.
Customers and the big picture
Maersk has a goal to reach net-zero emissions by 2050, and some of its customers have even loftier emission-reduction goals.
“We are very excited about this addition to our fleet, which will offer our customers unique access to carbon-neutral transport on the high seas while balancing their needs for competitive slot costs and flexible operations. To us, this is the ideal large vessel type to enable sustainable, global trade on the high seas in the coming decades,” Thygesen said.
Maersk said about half of its top 200 customers have already set science-based targets or zero-carbon goals, or are in the process of setting them. As consumers and companies seek more sustainable products and emission reductions along their supply chains, demand for alternative-fuel vessels to move goods around the world is likely to rise.
“Unilever is committed to accelerating the transition to clean transport solutions, not just in our own operations but along global value chains as we work to achieve net-zero emissions by 2039. With logistics and distribution accounting for around 15% of our greenhouse gas emissions footprint, it’s important that we work with partners shifting to lower-carbon fuels. We are proud to partner with Maersk as they pioneer carbon-neutral transportation on the high seas,” Michelle Grose, head of logistics and fulfilment at Unilever, said in the release.