Maersk Enters Long-Term Green Methanol Agreement with LONGi to Lower Fleet Emissions

Maersk has secured a long-term bio-methanol offtake agreement with LONGi Green Energy Technology Co., Ltd., which will aid in reducing greenhouse gas (GHG) emissions from Maersk's expanding fleet of dual-fuel methanol container vessels. This partnership underscores the growing importance of bio- and e-methanol as viable alternative fuels in the shipping industry, particularly as the sector aims for significant decarbonization in the coming decade.

Rabab Raafat Boulos, Chief Operating Officer of A.P. Moller - Maersk, emphasized the significance of this agreement, stating, "Bio- and e-methanol continues to be the most promising alternative shipping fuels to scale up in this decade, and the agreement with LONGi serves as a testament to this." She emphasized the key challenge confronting global shipping in reaching net-zero emissions: the cost difference between conventional fossil fuels and cleaner alternatives. Boulos urged the member states of the International Maritime Organization (IMO) to create a more equitable environment by implementing a global green fuel standard and a robust pricing mechanism, both of which are crucial for the industry's transition to sustainable fuels.

With the addition of the volumes sourced from LONGi, Maersk is making substantial strides in securing sufficient methanol for its dual-fuel fleet, which currently includes seven operational vessels. The company's methanol offtake agreements are expected to meet over 50% of the demand for the dual-fuel methanol fleet by 2027. This agreement is part of Maersk's broader strategy to build a global portfolio of alternative fuels, with several methanol projects already in advanced stages of development.

Emma Mazhari, Head of Energy Markets at A.P. Moller - Maersk, noted, "While we believe that the future of global logistics will see several pathways to net-zero, this agreement underscores the continued momentum for methanol projects pursued by ambitious developers across various markets." She acknowledged China's leadership in this field while also expressing optimism about strong market developments in other regions, particularly the United States, where Maersk is actively engaging with promising projects.

The bio-methanol supplied through the LONGi agreement will be produced at a facility located in Xu Chang, Central China, utilizing residues such as straw and fruit tree cuttings. This sustainable production method ensures that the bio-methanol will meet Maersk's stringent sustainability criteria, including achieving a minimum of 65% reduction in GHG emissions over its lifecycle compared to fossil fuels. This partnership is a significant step forward in Maersk's commitment to sustainability and its goal of reducing emissions in the shipping industry.

The bio-methanol agreement between Maersk and LONGi Green Energy Technology Co., Ltd. is set to take place in Xu Chang, located in the Henan province of Central China. LONGi, a leading global manufacturer of photovoltaic (PV) products and developer of solar energy projects, has partnered with Maersk throughout its growth, making this agreement a significant milestone in their collaboration. The first volumes of bio-methanol are expected to be available in 2026, with full production projected to commence by the end of the decade. This long-term deal will extend into the next decade, with production beginning from residues such as straw and fruit tree cuttings. The bio-methanol will meet Maersk’s stringent sustainability requirements, achieving at least a 65% reduction in greenhouse gas emissions over its lifecycle compared to fossil fuels, which corresponds to a reduction of 94 g CO2e/MJ.