Offshore wind power developer Ørsted has entered into an e-methanol development project in Sweden aimed at decarbonizing the maritime sector.
Denmark’s largest energy company will acquire a 45% stake in Liquid Wind AB’s FlagshipONE methanol project, according to a company statement. It did not provide any sums for the deal or project costs. The two companies see a final investment decision in the project as soon as this year, with commissioning of the plant in 2024.
FlagshipONE will be the first of a series of facilities Liquid Wind plans to be build across Sweden through 2050 that use hydrogen from renewables to develop green fuels.
The maritime sector accounts for about 2-3% of the world’s carbon emissions and is one of the more challenging sectors to decarbonize. Long distance shipping requires cheap, reliable fuels, which are standardized and available globally. Electric power, as seen in electric cars, is not viable due to the massive tonnage and long journeys involved in maritime shipping.
Shippers and fuel suppliers are examining developmental fuels like methanol as alternative options. But they face obstacles in this regard. Methanol fuel tanks, for instance, require about twice the tank capacity compared to diesel for the same fuel endurance. There are different types of methanol, not all of it green – the majority of the commodity currently comes from processing natural gas or coal.
Despite the challenges, industries continue to develop electro-fuels created by wind or solar, as the European Union and the investment community place greater emphasis on ESG norms.
Ørsted’s latest partnership follows on earlier announcements that the company will join the first full-scale green hydrogen project for oil and gas major BP and will power Facebook and McDonald’s with clean energy after purchasing a U.S.-based wind array.
“Like we did with offshore wind, we are at Ørsted ready to be a driving force in maturing the green fuels industry, where we can play a significant role in decarbonising hard-to-abate sectors like maritime transport,” said Martin Neubert, CCO and Deputy Group CEO of Ørsted.
FlagshipONE will produce around 50,000 tonnes of e-methanol a year based on renewable hydrogen and biogenic CO2. The electrolysis manufacturing the hydrogen will be powered by onshore wind. The CO2 will be captured from the combined heat and power plant in Örnsköldsvik, Sweden, where FlagshipONE will also be located.
“Our green fuel will become a dominant fuel for true decarbonisation in the hard to abate shipping sectors, reducing CO2 emissions with more than 90 %,” said Claes Fredriksson, CEO and Founder of Liquid Wind.
It’s a long road ahead for new fuels entering a conservative industry like maritime shipping, where energy reliability is a top priority. Ørsted’s investment decision on FlagshipONE and its aim to produce e-methanol is among the first steps taken by a major energy industry player to turn maritime shipping green.