By Isabelle Yr Carlsson
COPENHAGEN (Reuters) - The world’s first commercial-scale e-methanol plant began operations in Denmark on Tuesday, with shipping giant Maersk set to buy part of the production as a low-emission fuel for its fleet of container ships.
The shipping sector is under pressure to find new sources of fuel after a majority of countries gave their backing to measures to help meet the International Maritime Organization’s targets towards eliminating carbon emissions by 2050.
So far zero-emission shipping fuels, such as green ammonia and e-methanol, which are produced using renewable energy, have tended to be more expensive than conventional fuel largely because they are not produced at scale.
"We expect that we will have a price parity with fossil methanol around 2035," Knud Erik Andersen, CEO of Denmark’s European Energy, told Reuters.
Located in Kasso in southern Denmark, the new plant, which has cost an estimated 150 million euros ($167 million), will produce 42,000 metric tons, or 53 million litres, of e-methanol per year, its joint owners Denmark’s European Energy and Japan’s Mitsui said.
Maersk will be a major customer of the Kasso plant. It operates 13 dual-fuel methanol container vessels that can be powered with fuel oil and with e-methanol and has ordered another 13 of the vessels.
It said, the plant’s annual production is enough to power one large 16,000 container vessel sailing between Asia and Europe.
For the smaller Laura Maersk, the world’s first dual-fuel container ship, with a capacity of more than 2,100 twenty-foot equivalent units, requires only 3,600 tons of fuel per year.
The Laura Maersk was scheduled to fuel near Kasso on Tuesday.
Traditional methanol is typically produced from natural gas and coal.
The Kasso plant will make e-methanol using renewable energy and CO2 captured from biogas plants and waste incineration.
Maersk said one of the biggest challenges of switching to sustainable fuel was cost, and it is researching green fuel technologies and more efficient shipping to make the process cheaper.
European Energy CEO Andersen said the company has plans to expand the Kasso facility as well as a pipeline of similar plants in Europe, Australia, Brazil and the United States.
In addition to its use in shipping, e-methanol can replace fossil methanol in plastic production, meaning it can supply other Danish companies.
Drugmaker Novo Nordisk (NYSE:NVO) and toymaker Lego will use e-methanol from the plant for making injection pens and plastic elements, respectively.
Excess heat generated from the e-methanol production will be used to heat 3,300 households in the local area.
($1 = 0.9004 euros)