The facility was supposed to produce 553,000 mt/year of bio-methanol. Image Credit: SunGas

Energy firm SunGas Renewables has halted further development of its Beaver Lake Biofuels project in Louisiana, citing slower adoption of low-carbon methanol as a marine fuel and uncertainty over carbon capture.

The proposed facility near Alexandria, Louisiana, was designed to convert wood fibre into about 553,000 mt/year of low-carbon methanol, it said in a statement on its website on Friday.

The project also planned to store around 1.1 million mt/year of biogenic CO2 underground.

“This decision reflects a combination of factors that affected Beaver Lake’s ability to advance on the timetable required, including slower-than-expected market adoption of low-carbon marine fuels (specifically low-carbon methanol), uncertainty regarding the carbon capture and storage pathway for the project and clarity on the available regulatory support and financing conditions needed to support a project of this scale,” it said.

In 2023, SunGas announced that the Louisiana facility would supply low-carbon methanol to A.P. Moller-Maersk's dual-fuel methanol-powered fleet.

The company had targeted a final investment decision in 2026 for the project, with start-up expected around 2029.

“We continue to believe low-carbon methanol can help decarbonize the maritime, aviation and chemicals industries, Robert Rigdon, CEO of SunGas, said.

"However, given the current regulatory uncertainty, slower customer uptake and broader financing and infrastructure constraints, we do not believe the conditions are in place to move the project forward successfully."

The project was backed by C2X, a green methanol producer backed by A.P. Moller Holding and Maersk.