Maersk signs long-term methanol deal for fuelling its container fleet

Danish shipping giant Maersk, part of the AP Moller-Maersk Group, has signed a long-term agreement with LONGi Green Energy Technology Co Ltd, for purchase of bio-methanol, as part of its move towards zero-emission shipping.

The bio-methanol so purchased will fuel Maersk’s growing fleet of dual-fuel methanol container vessels, thereby helping to lower GHG emissions. Delivery of the fuel is expected to start in 2026. 

Bio-fuels and e-methanol are preferred alternatives for major users of fossil fuels, like shipping companies, because of the possibility of scaled up production and supply.

Maersk, however, said the price gap between fossil fuels and greener alternatives posed a big challenge for global shipping companies to transition to alternative fuels and foster net-zero goals.

What is needed is a level playing field, which combines the adoption of a global green fuel standard by member states of the International Maritime Organisation (IMO) and an ambitious pricing mechanism, Mersk COO Rabab Raafat Boulos pointed out. 

LONGi will be supplying bio-methanol produced at a facility in Xu Chang, Central China. The China facility uses residues of straw and fruit-tree cuttings to produce bio-methanol. 

With the fuel sourced from LONGi, the combined methanol volumes agreed to so far will meet 50 per cent of the 2027 fuel needs of Maersk’s current fleet of 7 duel-fuel container vessels, the company added.

Maersk has targeted a 65 per cent reduction in its CHS emission through methanol use compared with fossil fuels. 

Maersk is banking on the growing number of methanol projects, especially in China and the US, to expand its alternative fuels portfolio.

With strong performance across all business segments and significant improvement in financial results for the fiscal third quarter, Maersk now expects full-year 2024 earnings (EBIT) to be of $5.2-5.7 billion, up from the earlier projection of $3-5 billion.