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AP Møller-Maersk and the founding family of the container shipping giant have set up a new company to produce green methanol in an attempt to increase supply of the fuel the Danish group views as essential to decarbonise the pillar of global trade.
The start-up, to be called C2X, is looking at green methanol projects close to the Suez Canal in Egypt, the port of Huelva in Spain, and the US, India, and Australia.
Maersk has hit out at the oil industry for not producing cheap enough green fuel, leading to it founding C2X as shipping proves to be one of the hardest sectors worldwide to decarbonise.
The shipping industry remains almost entirely dependent on fossil fuels and accounts for about 3 per cent of global greenhouse gas emissions, according to the OECD.
C2X, which is 80 per cent owned by the family investment company with the rest belonging to the Maersk public company, is aiming to produce 3mn tonnes of green methanol a year by 2030.
About 110mn tonnes of conventional polluting methanol, mostly derived from gas or coal, is now used by the chemicals and transport industries. Shipping is expected to add 10mn tonnes of demand by the end of the decade.
At present, green methanol, which is made from biomass or captured carbon and hydrogen produced by renewable energy, is limited and expensive.
“First and foremost we’re looking to accelerate the availability of green methanol. If green methanol was available at a reasonable price it would be the logical choice for chemical and shipping industries,” Brian Davis, chief executive of C2X, told the Financial Times.
The new company’s launch comes as Maersk’s first vessel capable of being powered by methanol is set to be named by Ursula von der Leyen, the European Commission president, at a ceremony in Copenhagen on Thursday.
Maersk announced last week that Equinor, the Norwegian state-controlled oil and gas major, would supply it with green methanol for the first months of the new vessel’s life.
C2X will not produce enough green methanol for Maersk’s own demand — estimated to be up to 5mn tonnes by 2030 — but will aim to supply the chemical industry with a fossil fuel-free alternative and potentially other shipping companies.
Davis said it was not a defensive move by Maersk. “It hasn’t been conceived out of a fear of lack of supply. The business case is so compelling. What it really needs is people to step up and make it,” said Davis, who worked at Shell for more than 30 years.
C2X has already recruited a team of 60 from the chemicals and renewable energy industries. Its chief financial officer will be Alastair Maxwell, a former banker at Morgan Stanley and Goldman Sachs.
Maersk has ordered up to 19 green methanol-powered ships as it targets net zero emissions by 2040 — the most advanced of any large container shipping group — but all will be capable of burning fossil fuels too.
Critics of green methanol point out the need for CO₂ for the production of the e-fuel. Davis said finding a “biological” and not fossil source of carbon was “very hard” and that C2X would probably need to get it via carbon capture projects. He estimated that demand for green methanol could reach more than 150mn tonnes by 2050.
C2X and Maersk declined to comment on how large its series A financing round had been. But Davis said C2X would need billions of euros to bring its projects to fruition by 2030 and so would need external partners.
“There is a pressing environmental requirement to scale the production of green methanol. C2X was founded to enable the energy transition in several hard to abate industries, including plastics, glues, textiles, and fuels,” said Robert Uggla, chief executive of AP Møller Holding and chair of Maersk as well as the fifth generation of the shipping group’s founding family.
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