Maersk Offers $ 150 Million Public Relations Gain to Shipping Industry with Purchase of Methanol Vessels

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Global industry is responsible for about 3.1% of global CO2 emissions, and that number increases when you consider black carbon emissions, as soot and unburned hydrocarbons have global warming potential (GWP ) over 20 years of 4,470, and a potential 100-year GWP of 1,055 to 2,240. Yes, our Amazon purchases and salads come with carbon debt.

So what is Maersk doing? It has ordered 8 post-Panamax container ships capable of carrying 15,000 containers each from the South Korean company Hyundai Heavy Industries, with delivery scheduled for 2024. The ships will be able to burn methanol or bunker fuel in their engines. Methanol is believed to be carbon neutral.

However, Maersk operates more than 700 ships, so the 8 ships powered by methanol powertrains make up around 1% of its fleet. Not exactly to get rid of bunker fuel quickly.

Methanol is interesting as the fuel of choice. It is made from natural gas through one of the steam reforming processes, similar to hydrogen in this regard. About one tonne of CO2 is produced for every tonne of methanol produced, and currently 0% of it is captured. When one ton of methanol is burned, 0.6 ton of additional CO2 is emitted. Maersk’s press release talks about carbon neutral methanol, which suggests using carbon capture from the fumes and follow-up sequestration of the CO2 produced in the steam reforming process.

Bubble plot of scale of CO2 problem versus author capture and use

As I have published extensively on global carbon capture and sequestration programs, I am confident that almost 0% of the CO2 from the manufacture of methanol from natural gas and its combustion as fuel will be captured, used and sequestered in the future.

The energy density of methanol is also interesting. The energy density of bunker fuels is approximately the same as that of diesel cited in the related source. Methanol requires much more space and weight on a ship for the same miles traveled as traditional fuels.

Operating at a cruising speed of 20 to 25 knots, a Panamax container ship will use approximately 63,000 gallons of marine fuel each day. Assuming US gallons (they’re smaller, so it’s the safe choice), that’s about 240 tons of fuel per day with diesel or bunker fuel. Freight vessels travel an average of 40 to 50 days, although some are at lower speeds where fuel consumption drops significantly. Assuming 40 days, that’s almost 10,000 tonnes of fuel.

For methanol, roughly double for 20,000 tonnes of fuel, and comparable less cargo space. Methanol from natural gas with no carbon capture costs is more than double what bunker fuel does too, over $ 1 per gallon compared to about $ 0.50 per gallon.

This means that the same trip will cost 4 times as much in fuel and will also emit a lot of CO2.

What methanol provides is cleaner burning fuel. Bunker fuel is a nasty stuff, and ships usually get the cheapest, lowest, and barely refined crap they can buy. Carbon black – soot and unburned hydrocarbons – is a major pollutant and has enormous global warming potential, as noted above. Much less black carbon from methanol than bunker fuel. Ditto sulfur, which is another harmful substance to ships with implications for acid rain. Finally, there is a high global warming potential in nitrous oxide, which is much lower than with bunker fuel.

Today, ships are fitted with scrubbers that capture a lot of sulfur, particulates and nitrous oxide, at least when they are in operation. After speaking to an engineer who designs, builds and installs them on ships, the focus is on the white appearance of the stack emissions, like water vapor. The appearance of cleanliness, if not the actual cleanliness.

However, CO2 is still emitted. The CO2 per unit of methanol burned is about 40% of the bunker fuel, however, since it takes twice as much to get the same energy, this represents about 80% of the emissions. It is not a CO2 saving that is worth noting if the methanol is made from natural gas. It’s more of a value proposition if the CO2 is captured from flue gases, air or vegetation, but it leads to the very high cost of “green” synthetic methanol.

It is possible to make greenish methanol. You can capture CO2 somewhere, crack water with electricity to create hydrogen, and then fuse them into methanol. I delved into this topic a few years ago while reviewing Carbon Engineering, a direct air capture fig leaf for various fossil fuel companies.

Green methanol manufacturing table

Green methanol manufacturing table by author

This turns out to be close to $ 3 per gallon just for the cost of manufacturing at the best of times, compared to just over $ 1 for natural gas-based methanol. Instead of 4x the cost of a trip for fuel, it would be 12x the costs.

Let’s put this in perspective. Today, with the cheapest bunker fuel you can get, fuel costs are 50-60% of operating costs. Methanol from natural gas without carbon capture makes up about 80%. Methanol from natural gas with carbon capture would bring it close to 90%. Green methanol is well over 90%.

So, will the shipping world stop and notice that Maersk will buy 8 methanol-powered ships? Yes, they will. They know mathematics and economics much better than I do, because they experience it every day. They know that the 8 ships represent a fig leaf for Maersk. They will note that the ships are dual fuel, capable of running on methanol or bunker fuel, and will know that outside of demonstration trials, Maersk will operate them entirely on bunker fuel for the vast majority of their lifetimes.

They will probably be happy that Maersk does public relations for the global shipping industry. And there won’t be a big queue for South Korean services from Hyundai Heavy Industries to build more at 10-15% markups on normal shipbuilding costs.

Long-haul maritime transport remains a difficult problem for decarbonization. The purchase of Maersk is not going to fix this. The approximately $ 150 million extra that he paid for the 8 ships represents about 0.4% of Maersk’s annual revenue, or about 1.5% of his expected profit in 2021. This is within the spending range of Maersk. majors of fossil fuels for carbon capture, i.e. fig leaf PR territory, and ships will no doubt run on bunker fuel, not methanol, for the vast majority of their miles of freight.

Featured Image Credit: Maersk

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