AP Moller-Maersk is building the ships and hoping the carbon-neutral methanol infrastructure will come along with it.

In splashing out $2.1bn on as many as 12 methanol-fuelled boxships, the Danish containership giant is betting it can supercharge so-called green methanol production and build an entirely new fuel supply chain before the first ship is delivered in 2024.

Berit Hinnemann, head of decarbonisation business development at Maersk, said: "The technology is there, but the demand is not. With the announcement of the vessels, we are putting the demand there."

She said Maersk is confident it can kick-start green methanol production and scale it, but it is also realistic.

"We realise it's a challenge," Hinnemann said. "This is very, very real now that we're building ships. We really believe this is the decade of action and we need to take action."

Until Maersk's move for eight 16,000-teu newbuildings at Hyundai Heavy Industries plus options to order four more, methanol as a marine fuel had only found limited footing among methanol producers already moving the chemical as cargo aboard their ships.

The fuel bears similarities to more popular fossil fuel-based competitors such as LPG and LNG — the latter favoured by liner operators such as CMA CGM and Hapag-Lloyd — in that it reduces emissions versus conventional fuel. But it does not eliminate emissions completely like ammonia or hydrogen do for carbon.

However, methanol breaks from LPG and LNG in that it is easier and cheaper to produce using alternative sources of CO2, like biomass and carbon captured from the air.

This method, producing what is called green methanol, slashes emissions when both production and use is taken into account offsetting the carbon emitted on board.

This is the methodology, known as life-cycle analysis or well-to-wake accounting, that Maersk relies on when saying its newbuildings will be carbon neutral.

DNV senior business development manager Christos Chryssakis said carbon neutral methanol is possible so long as producers and buyers take care in sourcing the CO2 and clean hydrogen. He identified price and infrastructure as issues.

“What makes methanol more attractive in this, is that methanol is a simple molecule. It can be produced more easily," Chyssakis said.

Christos Chryssakis, senior business development manager at DNV. Photo: DNV

He added that the cost of producing clean methanol can be lower than producing another alternative such as clean diesel fuel, but the cost is still high as methanol can be more expensive than conventional fuel.

It also takes more methanol to complete a journey than conventional fuels.

He said the benefit comes in green methanol when the life-cycle cuts can be factored in.

"Methanol is still a hydrocarbon," Chyssakis said. "We talk about methanol as a green fuel, but this is a hydrocarbon, when you burn it, you emit CO2. You really need to produce it as green methanol to get the carbon benefits."

Hinnemann said Maersk intends to power the newbuildings with green methanol from the start, although they can also burn conventional very low-sulphur fuel.

That would require a considerable scaling up of production, as, according to industry trade group The Methanol Institute, just 200,000 tonnes of green methanol is produced annually versus 98m tonnes of methanol produced each year.

Maersk has secured some already for a smaller feeder vessel under construction through an agreement with European Energy and its subsidiary REintegrate for 10,000 tonnes of green methanol.

Conceding that Maersk would need "huge amounts" of the chemical for the larger newbuildings, Hinnemann said the company was in discussions with companies from several sectors with an eye on building partnerships to produce even more green methanol.

She said the focus would be on scaling up the infrastructure with an aim of bringing costs down and ensuring methanol production is from renewable sources.

Hinnemann seemed to rule out the use of fossil fuel-based methanol should green methanol not be available immediately.

"We think we can move beyond the chicken and the egg," she said. "Now we can have serious conversations on how to scale up the production of the fuel.

"I think it’s a huge step. Building up this supply chain for green fuels, that is a big challenge and a very, very important challenge."