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Maersk CEO: LNG won’t play a big role for us as a transition fuel

The world’s largest container shipping company Maersk is likely to opt for a zero-emission alternative to fossil fuels rather than choosing LNG as a bridging fuel for the company’s fleet.

“We don’t believe that LNG will play a big role for us as a transition fuel, because it is still a fossil fuel and we would rather go from what we do today straight to a neutral type of fuel. However, that will be years into the future I suspect,” Søren Skou, Chief Executive Officer of A.P. Møller – Mærsk A/S said during the company’s Q3 2020 Investor and Analyst presentation held on Wednesday Nov 18.

LNG identified by industry majors and DNV GL, as the likely transition fuel for the shipping sector

LNG has been identified by industry majors, including DNV GL, as the likely transition fuel for the shipping sector due to major breakthroughs made over the past few years in the development of the necessary bunkering infrastructure.

There are several promising solutions in the spotlight of the shipping sector’s debate on the potential fuels of the future, including ammonia, hydrogen, and batteries to power global fleets. However, the production and scale of availability of these fuels are yet to be ramped up in order to become viable alternatives.

The company working hard on figuring out what the future fuel should be before ordering any new ships

Skou said the company was working hard on figuring out what the future fuel should be before it starts ordering any new ships.

“We are not planning to order any new ship any time soon, because we still haven’t made up our mind on the potential fuels of the future. We would ideally like to figure out (…) and then start building ships that would fit that type of fuel when we need them. “

The container shipping heavyweight announced at the end of 2018 that it wants to become a carbon-neutral company by 2050. In order to achieve this goal, the industry needs to develop carbon-neutral vessels by 2030, which means carbon-neutral fuels and the relevant supply chains need to be scaled up substantially over the next decade.

Ordering assets with an expected life span of 20-25 years is a very risky endeavor as technologies available today cannot meet the decarbonization goals of 2050 and could end up being a stranded investment.

Hence, the company is pulling up a significant investment in research and development to improve the technical and financial viability of decarbonised solutions.

In line with those efforts, in June this year, Maersk teamed up with ABS, Cargill, MAN Energy Solutions, Mitsubishi Heavy Industries, NYK Lines and Siemens Energy in setting up the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping.

The center’s focus will be the development of new fuel types and technologies with the aim of achieving the IMO 2050 target and eventually fully decarbonize operations.

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