Danish shipping company A.P. Moller Maersk has signed a 500,000 metric ton/year green methanol supply agreement with Chinese developer Goldwind to fuel its methanol-powered ships from 2026, the company said in a news release on Wednesday.

The supply agreement includes a mix of green bio-methanol and e-methanol produced using wind energy at Goldwind's production facility in Hinggan League, northeast China. Production is expected to begin in 2026. Following the signed offtake agreement with Maersk, the final investment decision for the facility is expected by the end of 2023.

Maersk currently has 12 methanol-enabled vessels on order, as it believes that green methanol is the most viable and scalable low emissions-solution for the shipping industry in this decade. The methanol supply deal can annually propel more than half of the vessels Maersk currently has on order.

"This deal enables us to significantly reduce our emissions footprint in this decade and stay aligned with the 1.5-degree Celsius trajectory as set out in the Paris Agreement, ensuring continued supply of low carbon shipping services to our customers in the second half of this decade," said Rabab Raafat Boulos, chief infrastructure officer at A.P. Moller-Maersk.

Maersk will take delivery of its first ocean-going, methanol-powered vessel, a 16,000 twenty-foot equivalent unit (TEU) container vessel, in the first quarter of 2024. The company has expand its sources of methanol supply globally for its vessels delivered between 2024 and 2025. It's estimated that Maersk's green methanol demand will reach 5 million mt by 2030.

The shipper is aiming to achieve net zero greenhouse gas emissions by 2040, one decade ahead of the International Maritime Organization's target.


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--Reporting Stacy Maphula, smaphula@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com

(END) Dow Jones Newswires

11-22-23 1155ET