25 August 2021

A.P. Moller - Maersk accelerates fleet decarbonisation with 8 large ocean-going vessels to operate on green methanol 

Danish shipowner Maersk has ordered eight new vessels capable of running on green methanol from Hyundai Heavy Industries. The $175 million vessels are due for delivery in early 2024, with an option for four more the following year. That makes it the first container shipping company to order large carbon-neutral vessels capable of sailing from China to Europe and across the Pacific, having ordered a small carbon-neutral feeder vessel in February. Each vessel costs about 10-15% more to build than a traditional ship as it will be able to run on both bunker fuel and carbon-neutral methanol, which costs about double bunker fuel. Maersk’s press release includes supporting statements from H&M, HP Inc. and Unilever, and the company cites support for the concept from Amazon, Disney, Levi Strauss, Microsoft, Novo Nordisk, and Procter and Gamble.

The announcement received significant international attention, which included an editorial by the Financial Times, referring to Maersk’s decision and crediting the EUs proposal to extend its emissions trading system to the shipping industry.

Henriette Hallberg Thygesen, Head of Fleet and Strategic Brands for Maersk explains that the technology advances at shipbuilders have increased in recent years. “We are putting our money where our mouth is. We do feel sufficiently secure that the technology is there to order this series of vessels. Now the biggest challenge was to secure enough green methanol for the vessels. “We need a significant ramp-up in production. We do feel there has been a lot of chicken and egg. So we find by going out with this announcement that we can break this cycle.” (press release, Financial Times, Financial Times)

Ørsted wants to build wind power for billions, but awaits new regulations

Ørsted wants to invest tens of billions in Sweden. But its ambition is to build several giant offshore wind farms requires reforms to facilitate large-scale expansion of offshore wind power, the company told Dagens Industri.

According to Peter Obling, European Business Development Manager for Offshore Wind at Ørsted, the company is working on two different concrete projects, one off the south coast of Skåne and one south of Gotland. The one off Ystad in Skåne could be up to 1.5GW in size, supplying energy into southern Sweden, which suffers from shortages and high prices. If all goes well, the wind park would be in operation in 2029. The area off Gotland would be similar in size, but the project is not as advanced as the Skåne one.

However, the development is dependent upon a proposal to reduce the connection costs for offshore wind. This was part of a 2016 Energy Agreement, where several political parties agreed that Sweden will have 100% renewable electricity by 2040. The government presented a proposal this February, which was meant to enter into force on 1 August this year, but a final regulation has not yet been presented.  

Obling commented that “Sweden has no support for offshore wind power, lacks political objectives and legislation that is adapted for offshore wind power. The proposal from the government is therefore an important signal and a cornerstone for being able to release the private investments that are prepared to build this large-scale infrastructure "

The Government's initial proposal, which was based on the state-owned grid operator, Svenska kraftnät being commissioned to expand the national high-voltage network to areas within Sweden's maritime territory where there are good conditions for connecting offshore wind power, has received a lot of criticism and objections during the consultation round. Actors such as the Energy Market Inspectorate, the Swedish Armed Forces and the Confederation of Swedish Enterprise, rejected the proposal. Hence, while the Government is reviewing their objections, Ørsted and other operators need to wait until they can see the final regulation.

Interest in constructing offshore wind in Sweden is huge, with Svenska kraftnät reporting that it had received new applications for 120 GW. In comparison, there is currently a total of just over 16 GW of installed hydropower in Sweden, approximately 10 GW of wind power and 6.9 GW of nuclear power. (Dagens Industri, Dagens Industri)

Hydro, Panasonic and Equinor's evaluating battery factory abroad, as alternative to Norway

Late last year, Hydro, Panasonic and Equinor announced that they were exploring possibilities for establishing a sustainable and cost-competitive European battery business in Norway. The three companies, working as the Joint Battery Initiative, received more than 100 proposals for plots that could house a Norwegian battery factory, and have selected some plots that they have decided to move on with.

However, a Norwegian battery investment may be threatened by the Brexit agreement. Anders Hegna Hærland, who leads Equinor's battery investment says that “At the same time as we are now reducing the number of plots in Norway, we will also look at possible plots abroad. The background is a serious concern related to the risk of punitive tariffs on electric cars with Norwegian-produced batteries between the EU and the UK.”

According to the Financial Times, Norwegian policymakers, have sounded the alarm about the future of the battery industry in Norway after discovering that any cars built in the EU containing Norwegian batteries would face tariffs of 10% to enter the UK from 2027 and vice versa.

Notwithstanding, Tom Jensen, the CEO of competitor Freyr Battery, said that his company was committed to its plans to build five gigafactories in northern Norway “It has not caused us to change our plans whatsoever … But it doesn’t mean we’re not paying attention to it. We are supporting the [Norwegian] government in dealing with a potential problem. We are very confident reason will prevail.” Iselin Nybo, Norway’s minister of trade and industry, said the country has “initiated dialogue with the European Commission and the UK in an attempt to find solutions to the issue”.

In a letter to one municipality, the Joint Battery Initiative wrote, "A battery investment in Norway will depend on us achieving competitive framework conditions compared with other European battery cell manufacturers, and that includes full access to the market in the EU and the UK,"

Green Hydrogen Systems receives the first electrolyser order in Norway

Green Hydrogen Systems, which supplies pressure-based alkaline electrolysers used in hydrogen production for the production of renewable electricity, has signed an agreement with Liquiline for the supply of electrolysis equipment for a project in Norway. Green Hydrogen Systems says that it will be the first GHS Hyprovide electrolysis contract for the Norwegian market. (Cleantech Watch)

OKQ8 plans to open 10 hydrogen stations

Retailer, OKQ8 has initiated a collaboration with Denmark’s Everfuel for the development of the hydrogen market in Sweden. The goal is to enable a hydrogen network at OKQ8 in the coming years, with an ambition to have opened 10 stations by 2024. (Klimatsmart)

What we’re reading

• What Greenland’s record-breaking rain means for the planet (The Conversation)
• Rich nations lagging on climate goals may face higher borrowing costs (Sydney Morning Herald)

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