Maersk faced a classic chicken-and-egg dilemma. If a shipping company wanted to build the world’s first carbon neutral cargo ship, it needed to have carbon neutral fuel, but there was no such fuel, because there were no such ships. Apparently, the fuel supply situation did not deter the Denmark-based global integrated shipping company.
Instead of waiting for the sustainable fuel market to come first, Maersk took the plunge and is building a ship that the company says will run on carbon neutral fuels. The ship is scheduled to set sail in 2023, seven years ahead of schedule.
In the not too distant past, building a new ship for carbon neutral fuels that don’t exist would seem to be a massive gamble. However, Maersk’s new decarbonization venture has a firm bottom-line footing in at least six areas.
First, Maersk notes that its own customers demand carbon neutral shipping. Among its 200 largest customers, about half have already set science-based or zero carbon goals, and that number is set to rise. Regardless of whether or not carbon neutral shipping fuel exists now, Maersk has the resources to invest in technology that beats the competition to the punch. The bottom line also gets an assist when the company’s fleet decommissioning schedule provides for swapping out older ships for new ones.
Next, Maersk has enormous buying power. By investing in a carbon neutral ship, the company can help kickstart and scale up the fuel supply chain. In some ways, the situation is similar to the growth of the electric vehicle market. A lack of charging stations initially tamped down consumer interest in buying electric cars, but now that global automakers are electrifying their fleets, the charging station market is booming.
In addition, Maersk’s new carbon neutral ship will not be one of those massive, deep-sea cargo ships that can weigh more than 200,000 tons. Maersk is planning on a smaller feeder vessel, designed to ply an intra-regional network. That will help alleviate the demand for massive quantities of new fuel.
Fourth, Maersk is not taking such a steep plunge after all. The new ship will be able to run on standard low-carbon fossil shipping fuel if more sustainable, alternative fuels do not materialize by 2023.
As for the fifth reason, the smaller-sized ship and the fallback fossil fuel scenario indicate that Maersk is hedging its bets. Nevertheless, the odds are good that an ample supply of carbon neutral fuel will be in hand by the time the company is ready to launch a carbon neutral vessel.
That’s because Maersk is not going it alone. It is collaborating with industry partners and other stakeholders, mainly through the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping, a non-profit research and development center.
“Our success relies on customers embracing this groundbreaking product and strengthened collaboration with fuel manufacturers, technology partners and developers to ramp up production fast enough,” explains CEO of Fleet & Strategic Brands for A.P. Moller - Maersk, Henriette Hallberg Thygesen.
“We believe our aspiration to put the world’s first carbon neutral liner vessel in operation by 2023 is the best way to kick start the rapid scaling of carbon neutral fuels we will need,” Thygesen adds.
Maersk’s research and development collaboration leads to the sixth, and perhaps the most important bottom-line factor: making carbon neutral shipping fuel at scale is technologically feasible today.
A quick look at the green hydrogen field demonstrates how quickly the carbon neutral shipping fuel industry can scale up, now that the wind and solar industries have matured.
Green hydrogen refers to hydrogen produced through electrolysis, in which an electrical current is applied to water. Electrolysis technology dates back to the 19th century, but until recent years it was more economical to produce hydrogen from natural gas, through a process called steam reformation. To this day, almost all of the global hydrogen supply is sourced from natural gas, with a smaller portion sourced from coal.
The advent of low-cost wind and solar power has finally opened the door to switching from steam reformation to electrolysis. Demonstration green hydrogen systems and pilot projects began popping up just a few years ago, and now suddenly commercial-scale green hydrogen systems are in the works, including a “gigascale” green hydrogen system planned for Sweden.
Maersk is most likely looking at a similar trajectory for the carbon neutral shipping fuel market, especially in the area of sustainable e-methanol.
Like green hydrogen, e-methanol has electrolysis at its heart. It is made from water-sourced hydrogen, combined with carbon recovered from industrial waste or from ambient air.
In a white paper on e-methanol published last December, Siemens indicated that the supply chain is already taking shape. The paper describes the Haru Oni “Power-to-X” project in the Magallanes Province in southern Chile, which will run on wind power.
The process rests on green hydrogen, except that instead of exclusively producing hydrogen gas with wind power, the Haru Oni project aims to produce “X,” referring to various carbon neutral products including e-methanol and other liquid fuels.
"Now, we have discovered that liquefaction of green electricity and its exports in the form of carbon-neutral fuels is one of the best ways to take advantage of the large wind energy potential, available in remote areas,” wrote Siemens physicist Gerhard Neubert.
The Haru Oni project will produce green hydrogen on site and combine it with carbon dioxide captured from ambient air to produce methanol. With this building block, Neubert lists e-gasoline, e-diesel and e-kerosene among the end products.
“Methanol is a universal basic feedstock, which enables its direct application in shipping, or its further conversion to synthetic kerosene to power the aviation sector,” Neubert notes. “In the future, non-fossil methanol, known as e-methanol, will see vast new application fields. It becomes sustainable or ‘green’ when it is produced from renewable hydrogen of either biological (bio-methanol) or electrochemical origin (e-Methanol) and CO2.”
If the Haru Oni project bears fruit, one major challenge for Siemens and other stakeholders will be to ensure that the footprint of new industrial facilities in remote areas is compatible with local communities and conservation goals.
Widespread adoption of the Haru Oni model will be a complex undertaking fraught with potential conflicts. In order for leading firms to maintain their ESG profiles, it will be necessary to set clear goals and standards and commit to transparency and collaboration with local communities.
Aside from that, with leading stakeholders like Siemens on board, the new Maersk carbon neutral ship seems less a gamble, and more a case of closely tracking new technologies and spotting new opportunities to decarbonize.
In addition to carbon neutral methanol, Maersk is also keeping an eye on the green ammonia field, another area in which commercial-scale development is taking shape.
Image credit: Andrey Sharpilo/Unsplash
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.