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Maersk Invests in Green Fuels on Land and Sea

A.P. Moller-Maersk is digging into its plan for carbon neutral operations.

Maersk announced that it has ordered another six large ocean-going vessels that can sail on green methanol. The six vessels will be built by Hyundai Heavy Industries and have a nominal capacity of 17,000 20-foot containers or equivalent units (TEU) and will replace existing capacity in the Maersk fleet.

At the same time, the company’s Performance Team unit has deployed its first Class 8 battery-electric trucks from Volvo Trucks North America in Southern California in response to customer demand for sustainable short-haul warehouse and distribution center operations.

“Our customers are looking to us to decarbonize their supply chains and these six vessels able to operate on green methanol will further accelerate the efforts to offer our customers climate neutral transport,” Henriette Hallberg Thygesen, CEO of fleet and strategic brands at Maersk, said. “Global action is needed in this decade in order to meet the Paris Agreement’s goal of limiting global warming to a 1.5 degrees Celsius  temperature rise.”

Maersk has set a net-zero emissions target for 2040 across the entire business and has also set tangible near-term targets for 2030 to ensure significant progress. This includes a 50 percent reduction in emissions per transported container in the Maersk Ocean fleet compared to 2020 and a principle of only ordering newbuilt vessels that can be operated on green fuels.

With the order, Maersk has in total ordered 19 vessels with dual-fuel engines able to operate on green methanol.

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“Green methanol is the best scalable green fuel solution for this decade and we are excited to see several other shipowners choosing this path,” Palle Laursen, chief fleet and technical officer at Maersk, said. “It adds further momentum to the rapid scaling of availability needed to bring down the premium on green methanol and accelerate the evolution of climate neutral shipping.”

Benchmarked against conventional fuel capabilities, additional capital expenditure (CAPEX) for the methanol dual-fuel capability is in the range of 8 percent to 12 percent, which is an improvement compared to when Maersk ordered eight vessels with the same technology last year, the company noted. The six 17,000 TEU vessels are all to be delivered in 2025 and will sail under the flag of Denmark. They all come as part of Maersk’s ongoing fleet renewal program and will replace an equal amount of capacity reaching end-of-life and leaving the Maersk managed fleet.

When all 19 vessels on order are deployed and have replaced older vessels, they will generate annual CO2 emissions savings of around 2.3 million tons.

Michael Gallagher, head of indirect sourcing, North America, Performance Team; Tracey Craik, regional sales director, TEC Equipment, and Jared Ruiz, acting head of electromobility sales for North America, Volvo Trucks North America with Performance Team’s Volvo VNR Electric fleet.

On land, the Volvo VNR Electric trucks are designed to handle local and regional distribution with a range of up to 275 miles on a single charge. Performance Team expects to deploy 126 Volvo Electric trucks in North America by the third quarter of 2023. By the end of October, 30 Volvo VNR Electric trucks will be in operation, including 16 in Performance Team’s Santa Fe Springs, Calif., distribution center and 14 in Performance Team’s Commerce, Calif., distribution center.

“Customers are looking for more tangible, sustainable options in their supply chain to satisfy their long-term climate change goals and their immediate business needs in short-haul trucking,” Jason Walker, executive vice president of operations for Performance Team, said. “So, we’re working closely with our partners at Volvo Trucks North America and TEC Equipment on electromobility solutions to define a new supply chain eco-chapter in our operations.”

The scaled deployment of zero-tailpipe emission Volvo VNR Electric models is part of the company’s environment, social and governance (ESG) strategy to decarbonize logistics. Its California-based fleet operates 215 trucks, which Performance Team intends to fully transition from diesel to battery-electric trucks. The 126 Volvo VNR Electric trucks are the first step in that plan, as well as creating new charging infrastructure to support its battery-electric fleet.

Performance Team ordered 126 Volvo VNR Electric trucks earlier this year as part of an order of 450 electric trucks to learn more about EV operations and battery technology that support Maersk’s global decarbonization goals. Maersk’s Environment Social Governance (ESG) strategy is to decarbonize logistics. The strategy is a key driver for zero carbon operations in trucking and an important part of Maersk’s goal of enterprise-wide, carbon neutral operations by 2040 with significant steps to be taken by 2030.

In the State of California, California Air Resources Board regulations require diesel trucks to transition to zero emissions by 2030.