Shipping giant Maersk unveils latest ‘dual-fuel methanol vessel’ in decarbonization shift

SINGAPORE — Denmark-based shipping and logistics giant Maersk unveiled its latest dual-fuel methanol vessel in the Southeast Asian country on Thursday as the industry ramps up decarbonization efforts. 

The newly named A.P. Møller is a 350-meter-long ship that adds to a growing fleet of Maersk vessels that are able to run on methanol as well as traditional marine fuels.

Speaking to CNBC’s “Squawk Box Asia,” Maersk’s Asia-Pacific president, Ditlev Blicher, said the vessels represent the latest technology that is ready to decarbonize shipping. 

“[This technology] allows the industry to shift from black fuels or fossil fuels into what we call E-methanol, or green methanol, significantly reducing the carbon outlets of normal shipping,” he said. 

Maersk broadly defines green fuels as fuels with a minimum 65% reduction in greenhouse gas emissions on a lifecycle basis compared with fossil reference fuels.

Although largely produced from fossil fuels, methanol can also be made from sustainable, renewable-based energy sources, according to the International Renewable Energy Agency.

Maersk says ships running on green methanol can save up to about 280 tons of CO2 per day, making it a key step in the company’s goal to reach net-zero emissions by 2040. 

Green methanol also has a lower sulfur content, reducing emissions of sulfur oxides, which contribute to air pollution and acid rain, according to the World Economic Forum.

Blicher said the A.P. Møller is Maersk’s ninth dual-fuel vessel out of an order of 25 planned to be completed by 2027.

According to the company, replacing just 12 of its “normal” vessels with ones running on green methanol could save 1.5 million metric tons of CO2 — almost double the CO2 emissions that the Municipality of Copenhagen produced in 2022. 

As the largest maritime shipper in the world, Maersk is a significant trendsetter for global trade, with many other companies following suit on methanol adoption.

According to Blicher, about 170 dual-fuel methanol vessels are on order from the entire industry, which is helping to build scale.

“Maersk, the industry and our client base are pushing forward and investing in this technology,” Blicher said, noting that clients are increasingly trying to meet their own decarbonization goals.

Still, while building economies of scale is vital, he believes more will be needed in order to shift the industry away from black fuels, with methanol presenting higher production costs.

Blicher expects this tipping of the scales to come from regulations that disincentivize black fuels.

“We’re talking about adding to the price of black fuel to make sure that the black fuel price is reflective of the impact that it has on the economy,” he said.

Singapore, the world’s largest bunkering port, has led various initiatives to promote sustainable shipping.

In October, Maersk raised its full-year forecasts after reporting strong third-quarter results, heavy demand and higher prices resulting from disruptions in the Red Sea. Revenue was $15.8 billion, up from $12.1 billion a year prior.