Shipping giant Maersk signs agreement to make green fuel in Spain

OVIEDO, Spain

Leading shipping company Maersk signed a deal with the Spanish government on Thursday to explore producing large quantities of green fuels for the shipping industry in Spain.

The Spanish government estimates that the project would cost around €10 billion ($9.75 billion) and create 85,000 jobs.

“This project is perfectly aligned with Spain’s strategy of reindustrialization, just transition, and the green hydrogen roadmap,” said Spanish Prime Minister Pedro Sanchez, who met with the Maersk CEO in Madrid on Thursday.

The project would encompass the entire value chain of making e-methanol or other green fuels for the shipping industry – from renewable energy sources to bunkering vessels.

According to the World Bank, the shipping industry accounts for around 3% of all greenhouse gas emissions annually, around the same as what Germany emits each year.

Maersk has set one of the industry’s most ambitious targets to reach net-zero emissions by 2040 but says the availability of large amounts of cost-competitive green energy remains the biggest hurdle.

“Operating a large fleet of container vessels, we are part of the climate problem,” said, Henriette Hallberg, Maersk CEO of Fleet & Strategic Brands, in a statement on Thursday. “And we have made the choice to take an active part in shaping the solutions to secure a green and just transition.”

Maersk alone will need 6 million tons of e-methanol per year to reach its 2030 goals and even more to reach its 2040 targets, according to company estimates.

The Spanish project could deliver up to 2 million tons of e-methanol per year.

At the upcoming COP27, Maersk is also expected to sign a contract for a green fuel project in Egypt, according to The General Authority for Suez Canal Economic Zone.

As pressure grows to shift away from highly polluting diesel, Maersk says it will introduce 19 vessels able to run on e-methanol into its fleet from 2023 to 2025.

“We are living in a climate emergency and need to rapidly accelerate the availability of green future fuels,” said Maersk CEO Soren Skou on Thursday.

E-methanol is made by combining green hydrogen and carbon dioxide captured from industrial sources. While still a relatively experimental energy source, it is considered a carbon-neutral fuel.

Experts say using e-methanol would also benefit the marine environment, as methanol spills would cause far less environmental damage than oil spills.

“It looks like methanol is going to be the fuel to triumph. However, between phase one and phase two, a decision will be made as to what fuel the second plant will make,” a government source told Spanish daily El Pais.

If the project goes forward, the two plants are set to be built in the regions of Andalusia and Galicia.