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Maersk brings carbon neutral shipping era closer with €5.95 billion order for greener ships

Maersk is replacing container ships approaching their end of life with greener vessels
Maersk is replacing container ships approaching their end of life with greener vessels   -   Copyright  Unsplash
By Wale Azeez

AP Møller Maersk, the world’s largest container shipping company, is advancing on its decarbonisation strategy after ordering eight container vessels that it says will be able to operate on carbon-neutral e-methanol fuel.

The container ships, each with a capacity of up to 16,000 twenty-foot equivalent units (TEU), are being built by Hyundai Heavy Industries and will cost the Danish shipping giant a total of $7 billion (€5.95 billion).

The agreement includes an option to purchase a further four vessels in 2025.

Maersk said the eight vessels will enable its container fleet to cut CO2 emissions by up to 1 million tonnes annually.

Shipping customers want to go green

The first ship will be delivered in three years’ time, as Maersk continues to retire craft reaching their end of life between 2020 and 2024 and moves towards becoming a carbon-neutral operation.

The move is supported by the fact that many of Maersk's most important global retail clients are looking hard at how to make their own supply chains less polluting.

“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,” the shipping and logistics company said in a statement.

"As part of Maersk’s ongoing collaboration with customers, corporate sustainability leaders including 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 have committed to actively use and scale zero-carbon solutions for their ocean transport, with many more expected to follow".

The mass order comes six months after Maersk announced it had ordered what it claims to be "the world’s first carbon-neutral container vessel" - a smaller ship of around 2000 TEU - planned to set sail on intra-regional routes from 2023, seven years ahead of the company’s original schedule.

The new ships will initially be powered with a dual fuel system, which will enable them to run on e-methanol as well as on the existing standard 'very low sulphur fuel oil' (VLSFO) as stipulated by the International Maritime Organisation from January 2020.

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

"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 decarbonise 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".

New fuel challenge

According to an IMO report released last year, shipping is responsible for around 3 per cent of global carbon emissions, rising over the six consecutive years between 2012 and 2018 - from 2.76 per cent at 962 million tonnes to 2.89 per cent at 1,056 million tonnes.

To support its move to e-methanol fuel, Maersk signed a supply agreement earlier this month with Danish renewables firm European Energy, whose subsidiary REIntegrate is building an e-methanol production facility to fulfil the demand.

So-called e-methanol is chemically identical to methanol but produced using sustainable sources of electricity, carbon dioxide and hydrogen. This means using wind power, capturing CO2 from biomass and the air, and producing hydrogen through water electrolysis.

However, e-methanol production is currently low and expensive.

Maersk said the energy supply to produce the e-methanol at a yet unnamed location will come from a solar farm in Kassø, southern Denmark.

In June, the world’s largest shipping firm called for a carbon tax on ship fuel to encourage the transition to cleaner alternatives.