A.P. Moller-Maersk Launches World's First Large Container Ship Fueled by Green Methanol

A.P. Moller-Maersk A/S’s newest methanol-powered vessel will soon set sail from South Korea as the shipping giant seeks to reduce emissions in one of the world’s most-polluting industries.

The Copenhagen-based firm unveiled the 350-meter-long container ship named Ane Maersk in the shipyard of Korean shipbuilder HD Hyundai Heavy Industries Co. in Ulsan city on Thursday. It will be operational by February and is the world’s first large container ship powered by green methanol that can traverse long distances across oceans.

The vessel has capacity for 16,592 twenty-foot-equivalent-unit containers — or about 29,000 African elephants, according to the company — and will sail routes between China, other Asian nations, the Middle East and Europe.

Shipping firms worldwide are racing to overhaul their fleets as pressure intensifies, including from major customers like Amazon.com Inc. and Ikea, to reduce the industry’s emissions. The International Maritime Organization has a target of net zero emissions by 2050, though Maersk has set its ambitions on hitting that goal by 2040 with cleaner fuels a core pillar of its strategy.

“By 2030 our ambition is to have 25% of the volume that we transport to be transported using green fuels,” Leonardo Sonzio, head of fleet management and technology at Maersk, said in an interview in the vessel. “To do so we have a plan on replacing the existing fleet with vessels that can sell on green fuel.”

Maersk plans to have 25 vessels that are able to run on so-called green methanol — fuel that’s either made from biomass, like solid municipal waste, or hydrogen and carbon dioxide — through 2027. It’s already got one ship powered by green methanol, which was inaugurated last year, though that’s smaller and can only sail short distances along coastal areas.

The company is betting big on green methanol. Last November it agreed to buy 500,000 metric tons of the fuel each year from a Chinese firm, the largest deal of its kind so far. The billionaire family behind the shipper is also forming a company that will have annual production capacity of more than 3 million tons by 2030.

Other shippers are joining the push: more than 150 container ships are on order to be delivered up to 2027, according BloombergNEF. Still, methanol-powered ships made up just 9.4% of the total orderbook at the end of 2023.

With efforts to cut emissions ramping up, BNEF estimates annual green methanol production capacity at about 5.5 million tons by 2027 — 11 times higher than current levels. But that compares with the 540 million tons needed to completely replace all marine fuel in 2050 and the industry faces major hurdles around scaling output, according to BNEF.

Beyond methanol, Maersk is considering a suite of green fuels to help reach its net zero target, including ammonia, Sonzio said. It’s also looking at electrifying vessels, given the cost of batteries per kilowatt-hour is expected to decline, he said.

“Ammonia is a very interesting fuel because of the fact that it doesn’t have a carbon molecule in it, and it’s quite scalable,” Sonzio said, adding the substance still has safety concerns due to its toxicity.

Shipbuilder HD Hyundai expects more than 70% of the vessel orders it’s targeting to win this year to be powered by green fuels, Sungjoon Kim, chief executive officer of HD Korea Shipbuilding & Offshore Engineering Co., HD Hyundai’s parent, said in an interview.

But with the maritime industry’s cleaner-energy transition still in its early stages, firms are at the moment still evaluating the best mix for their fleets.

HD Hyundai is building 19 of Maersk’s 25 methanol-powered ships, with two already completed. But it’s also developing engines for ammonia-fueled ships in cooperation with Man Energy Solutions SE and WinGD after winning orders for two vessels late last year from a different firm, according to Kim.

“Shippers will decide whether they should pay a penalty for not using green ships or immediately adopt the technology,” Kim said. “We think the demand for eco-friendly vessels will rise significantly.”