LNG Bunker Supporters Criticise Maersk's Approach to First Methanol Voyage

Maersk's 2,100 TEU feeder vessel is set to be the world's first container vessel to sail on green methanol. Image Credit: AP Moller-Maersk

Supporters of LNG as a bunker fuel have taken issue with container shipping and logistics firm AP Moller-Maersk's approach to procuring bunkers for the maiden voyage of its first methanol-fuelled ship.

Maersk's first methanol-fuelled boxship, a 2,100 TEU feeder vessel, will make its way from South Korea to Denmark later this year.

The company announced this week that OCI Global would supply bio-methanol for the voyage.

But supporters of LNG bunkering have raised questions over the green credentials of the fuel. The actual fuel being used will be produced using fossil natural gas, with the GHG reduction credits of bio-methane produced elsewhere in OCI's network being swapped on a 'mass balancing' basis to the account of the fossil gas to give it its overall green credentials.

Maersk has said a mass balancing approach will be used for the bio-methane used in the production of bio-methanol for the voyage. Image Credit: AP Moller-Maersk

Green bio-methanol and 'grey methanol' produced from fossil gas or coal are chemically identical, and the distinction between the two comes from the level of net GHG emissions resulting from the full cycle of their production and use. Mass balancing refers to the process of shifting on paper the environmental benefits of some methanol in one part of the world to product elsewhere in the world.

In this particular case the mass balancing is being applied to the methane used in the production of the methanol, rather than the final product, but the principle is the same.

LNG bunkering supporters discussing the news on LinkedIn this week suggested this approach goes against Maersk's general scepticism towards LNG and its green alternatives.

"What bothers me is the inefficiency in the decarbonisation path that Maersk has chosen due to its stance against LNG which for all intent and purpose is methane," Saheera Ahmad, head of business development for marine LNG at Shell, said in a LinkedIn post on Wednesday.

"I have no issue with mass balancing, in fact within certain conditions it allows for decarbonisation to be achieved economically.

"What is concerning to me is that all this while Maersk has been saying it will be using e-methanol produced from green hydrogen.

"If Maersk accepts biomethane, then why not start its decarbonisation journey with LNG, a fuel which produces much lower GHG emissions versus VLSFO and the grey methanol that will end up in the fuel tank of this new vessel?

"The route Maersk has chosen is more energy intensive and, in my humble opinion, wasteful."

John Lindquist, head of LNG bunkering at GAC Bunker Fuels, raised similar concerns.

"There's some nuance to their plans, it seems, and it's not easy to see the sleight of hand," he said.

"They're content on burning grey methanol onboard, while still needing to procure the green credentials upstream through the biomethane chain.

"So it likely will take substantially more biomethane to offset the production of grey methanol (even after accounting for negligible methane slip onboard an LNG fuelled-vessel)."

Maersk has said that it was initially concerned that it would not be able to secure green methanol for this voyage, and that the approach that it has taken for this particular stem will delver about 65% lower net GHG emissions than using conventional fuel would. The company has not committed to using synthetic or e-methanol in significant quantities any time soon, but is hopeful that this product will become available in due course.

Maersk intends to transport at least 25% of its ocean cargo using green fuels by 2030, and has signed deals with green methanol producers around the world to guarantee supply. But it has previously suggested that a mass balancing approach will be needed some of the time to ensure the product is available at the right locations for its ships.