A.P. Moller - Maersk to invest US$7 billion in methanol powered ocean-going vessels
Denmark-headed global container shipping major A.P. Moller - Maersk has announced that it will introduce in the first quarter of 2024, the first in a groundbreaking series of 8 large ocean-going container vessels capable of being operated on carbon-neutral methanol. The vessels will be built by Hyundai Heavy Industries (HHI) and have a nominal capacity of approximately 16 000 containers (Twenty-Foot Equivalent Unit - TEU).
According to a statement, the agreement with HHI includes an option for 4 additional vessels in 2025. The series will replace older vessels, generating annual carbon dioxide (CO2) emissions savings of around 1 million tonnes. As an industry first, the vessels will offer Maersk customers truly carbon-neutral transportation at scale on the high seas.
The time to act is now if we are to solve shipping’s climate challenge. 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 decarbonize 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, said Soren Skou, CEO, A.P. Moller – Maersk.
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.
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.
As an industry leader, H&M Group has a responsibility to fight climate change. We have the ambition to become climate neutral by 2030 and climate positive by 2040. We truly believe that our climate actions should be co-created with our partners. Maersk’s investment in large vessels operating on green methanol is an important innovative step supporting H&M Group’s climate goals within International Freight and we are proud to take part in this pioneering journey, said Leyla Ertur, Head of Sustainability – H&M Group.
The vessels will come with a dual-fuel engine setup. Additional capital expenditure (CAPEX) for the dual-fuel capability, which enables operation on methanol as well as conventional low sulphur fuel, will be in the range of 10-15 percent of the total price, enabling Maersk to take a significant leap forward in its commitment to scale carbon-neutral solutions and lead the decarbonization of container logistics.
Maersk will operate the vessels on carbon-neutral electro-methanol (e-methanol) or sustainable bio-methanol as soon as possible. Sourcing an adequate amount of carbon-neutral methanol from day one in service will be challenging, as it requires a significant production ramp-up of proper carbon-neutral methanol production, for which Maersk continues to engage in partnerships and collaborations with relevant players.
The vessels will be designed to have a flexible operational profile, enabling them to perform efficiently across many trades, and add flexibility regarding customer needs.
They will feature a methanol propulsion configuration developed in collaboration with makers including MAN Energy Solutions (MAN ES), Hyundai (Himsen), and Alfa Laval which represents a significant scale-up of the technology from the previous size limit of around 2 000 TEU.
Replacing end-of-life tonnage
The new vessels will be classed by the American Bureau of Shipping and sail under Danish flags. They come as part of Maersk’s ongoing fleet renewal program and will replace tonnage of more than 150 000 TEU which is reaching end-of-life and leaving the Maersk-managed fleet between 2020 and Q1 2024.
CAPEX for the announced vessels is included in current guidance for 2021-2022 of US$7 billion. Maersk further reiterates its strategy of maintaining a fleet capacity in the 4.0 to 4.3 million TEU range, as a combination of Maersk managed and time-chartered vessels.
We are very excited about this addition to our fleet, which will offer our customers unique access to carbon-neutral transport on the high seas while balancing their needs for competitive slot costs and flexible operations. To us, this is the ideal large vessel type to enable sustainable, global trade on the high seas in the coming decades and from our dialogue with potential suppliers, we are confident we will manage to source the carbon-neutral methanol needed, said Henriette Hallberg Thygesen CEO, Fleet & Strategic Brands, A.P. Moller – Maersk.