Maersk invests in bio-methanol supplier WasteFuel as demand prospects pick up

Container giant Maersk, which announced in August the order of eight new vessels to run on sustainable methanol, had invested in bio-methanol supplier WasteFuel, the Danish company said in a statement.

Maersk's investment will enable WasteFuel to develop bio-refineries that produce sustainable fuels from unrecoverable waste that would otherwise degrade, and release methane and other harmful emissions into the atmosphere, the Sept. 8 statement said.

Fueling ships with renewable methanol will cause fuel bills for those vessels to be roughly twice as high as conventionally fueled ships, Maersk's Head of Decarbonisation Innovation and Business Development Jacob Sterling told S&P Global Platts earlier in September.

Finding appropriate fuel remained difficult, the company has said. "We know that sourcing an adequate amount of green fuel for our methanol-fueled vessels will be very challenging, as it requires a significant production ramp-up globally," Morten Bo Christiansen, VP and Head of Decarbonisation at Maersk, said in the statement.

Ordering a number of vessels that run on sustainable methanol creates demand that should encourage supply projects, Sterling said.

"Collaboration and partnerships are key to scaling the production and distribution of sustainable fuels, and we look forward to doing exactly that with WasteFuel," Christiansen said.

Maersk will take delivery of eight large ocean-going vessels in 2024 that can run on renewable methanol, which should stimulate supply of environmentally friendly fuel, company management said Aug. 24.

The vessels imply annual demand of 300,000-360,000 mt of renewably-sourced methanol, depending on factors like deployment and operational requirements, Sterling said.

There is the potential for an additional four ships in 2025.

The whole Maersk container fleet consumed 10.344 million mt of marine fuel in 2020, the company's annual report showed.

Maersk said in August it had secured supply for its first vessel to be powered by carbon-neutral methanol. REintegrate and European Energy will establish a new Danish facility to produce approximately 10,000 mt/year of the fuel. This will provide enough fuel annually for Maersk's first feeder vessel to run on environmentally friendly methanol, Maersk said in a statement Aug. 19.

S&P Global Platts assessed conventional methanol T2 FOB at Rotterdam at $ 450.47/mt Sept. 7 and delivered 0.5% sulfur fuel oil at Rotterdam at $508/mt. This works out at $20.99/gigajoule and $11.65/gj respectively, showing conventional methanol as almost twice the price of fuel oil.

Platts said Aug. 13 it was proposing to launch daily methanol bunker fuel price assessments, effective Sept. 27.