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Maersk to Sail Green-Fuel Ships in 2024

After announcing that it had identified its partner to produce green fuel for its first vessel to operate on carbon neutral methanol–REintegrate, a subsidiary of the Danish renewable energy company European Energy–A.P. Moller-Maersk said Tuesday that in the first quarter of 2024, it will introduce the first in a groundbreaking series of eight large ocean-going container vessels capable of being operated on carbon neutral methanol.

The vessels will be built by Hyundai Heavy Industries (HHI) and have a nominal capacity of approximately 16,000 containers (20-foot equivalent units or TEU). The agreement with HHI includes an option for four additional vessels in 2025. The series will replace older vessels, generating annual CO2 emissions savings of around 1 million tons.

As an industry first, the vessels will offer Maersk customers truly carbon neutral transportation at scale on the high seas. More than half of Maersk’s 200 largest customers have set or are in the process of setting ambitious science-based or zero carbon targets for their supply chains. These include Amazon, Disney, H&M Group, HP Inc., Levi Strauss & Co., Microsoft, Novo Nordisk, The Procter and Gamble Company, Puma, Schneider Electric, Signify, Syngenta and Unilever, which have committed to actively use and scale zero carbon solutions for their ocean transport.

“Maersk’s investment in large vessels operating on green methanol is an important innovative step supporting H&M Group’s climate goals within international freight and we are proud to take part in this pioneer journey,” Leyla Ertur, head of sustainability at H&M Group, said.

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In June, Maersk said Hyundai Mipo Dockyards will be building a 2,100 TEU feeder. It will be 172 meters long and is expected to join the Maersk fleet in mid-2023, sailing on the Baltic shipping route between Northern Europe and the Bay of Bothnia.

The vessels come with a dual fuel engine setup. Additional capital expenditure (CAPEX) for the dual fuel capability, which enables operation on methanol, as well as conventional low sulfur fuel, will be in the range of 10 percent to 15 percent of the total price, enabling Maersk to take a significant step in its commitment to scale carbon neutral solutions and lead the decarbonization of container logistics.

“The time to act is now, if we are to solve shipping’s climate challenge,” Maersk CEO Soren Skou said. “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.”

Maersk will operate the vessels on carbon neutral e-methanol or sustainable bio-methanol as soon as possible. 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, for which Maersk said it continues to engage in partnerships and collaborations with relevant players.

The vessels will be designed to have a flexible operational profile, enabling them to perform efficiently across many trades and add flexibility regarding customer needs, the company noted. They will feature a methanol propulsion configuration developed in collaboration with makers including MAN ES, Hyundai (Himsen) and Alfa Laval that represents a significant scale-up of the technology from the previous size limit of around 2,000 TEU. The vessels will be classed by the American Bureau of Shipping and sail under Danish flags.

“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,” Henriette Hallberg Thygesen, CEO of fleet and strategic brands at Maersk, said. “To us, this is the ideal large vessel type to enable sustainable, global trade on the high seas in the coming decades and from our dialogue with potential suppliers, we are confident we will manage to source the carbon neutral methanol needed.”

The new vessels come as part of Maersk’s ongoing fleet renewal program and will replace tonnage of more than 150,000 TEU that is reaching end-of-life and leaving the Maersk managed fleet by the first quarter of 2024.

Maersk said CAPEX for the announced vessels is included in current guidance for 2021-2022 of $7 billion.