Maersk says efforts to cut emissions from ocean shipping need government support Reuters

By Lisa Baertlein

LOS ANGELES (Reuters) – The Alette Maersk was the first container ship powered by low-carbon methanol fuel to cross the Pacific Ocean – a milestone in the shipping industry’s effort to reduce its impact on the climate.

But when the 1,148-foot (350-meter) ship arrived at the port of Los Angeles in China last week, there was nowhere in the U.S. to buy more green fuel, forcing it to rely heavily on marine fuel on fuel base for the return journey.

At a one-day ship naming event on Tuesday, representatives from AP Moller-Maersk said the industry, which accounts for nearly 3% of global greenhouse gases, needs more and cheaper green fuel if it is to decarbonise at the rate scientists and world governments say is needed to combat climate change.

“We are on a clock,” said Maersk CEO Vincent Clerc.

Maersk aims to achieve net zero greenhouse gas emissions by 2040 and has become a leader in its sector’s energy transition, with five green methanol vessels on the water and another 20 on order.

Even so, that’s only a fraction of the 700 owned and chartered vessels. The new ships are also dual-fuel, meaning they are equipped to run on fossil fuels when necessary, such as when green methanol is too expensive or unavailable.

Green methanol can be obtained from agricultural and food waste or from carbon dioxide and hydrogen using renewable electricity.

The fuel now costs two to three times more than fossil fuels, Maersk officials said, and global production is currently low.

China’s Goldwind has secured supplies of green methanol for the first of Maersk’s 12 large ships to burn the fuel, with deliveries starting in 2026.

But would-be supplier Orsted ( CSE: ) is scrapping plans to build Europe’s largest e-methanol plant under construction, saying the green fuel market is developing more slowly than expected. E-methanol is produced with CO2 captured from renewable sources.

Maersk also plans to replace up to 60 additional vessels with dual-fuel vessels that run on renewable fuels, including liquefied biomethane. That low-emission fuel from renewable sources is controversial because it is chemically identical to fossil methane, so any leakage releases a powerful greenhouse gas.

Most Maersk ships can also run on biodiesel, a replacement fuel that has been available for years but still makes up a small portion of marine fuel.

Family shippers love it NIKE (NYSE: ), Amazon.com (NASDAQ: ), H&M (ST: ) and Nestle have partnered with Maersk on green-fueled deliveries to help drive adoption that can justify investment in manufacturing.

“Nobody can do this alone,” Venkatesh Alagirisamy, Nike’s chief supply chain officer, said at the event on Tuesday, where officials urged regulators and governments to act.

Clerc said Maersk has asked US President Joe Biden’s administration to use the Inflation Relief Act to boost green marine fuel, as it has done for the shipping and aviation sectors.

Maersk and peers CMA CGM, Hapag-Lloyd and MSC have also proposed a regulatory framework to the International Maritime Organization. This includes a plan to charge a “green balance tax” to carriers that gain a competitive advantage by hanging on to lower-cost fossil fuels.

“We need regulations and legislation to level the playing field,” said Saba Takidar, Maersk’s lead partner for commercial sustainability. “The whole fuel ecosystem has to change.”