AP Moller – Maersk has agreed to acquire a minority stake in a green-fuel startup WasteFuel, which is funded by Warren Buffett, as the world’s largest container line latches on to present-day technologies for its fleet decarbonisation. Maersk didn’t disclose the size of the deal.
The Denmark-based shipping company reported that its investment in California-based WasteFuel is a portion of a wider strategy to commit funds toward developing energy that doesn’t contaminate.
Morten Bo Christiansen, Director in Charge of cutting CO2 emissions at the Copenhagen-based shipping firm said in an interview, “We need green fuels from all over the world and we need them in huge quantities. WasteFuel, which converts trash into green bio-methanol, sustainable aviation fuel, and renewable natural gas, is at the forefront in its field and we hope that one day we can make an off-take agreement with them.”
Maersk consumes approximately 12 million tonnes of marine oil per year, which is nearly equal to all the oil produced in the world in a single day. The company needs to find eco-friendly alternatives for all that fuel by 2050 when it plans to be carbon neutral.
Christiansen noted, “It’s a chicken-and-egg problem. No one is making green methanol because there’s no demand to consume it, but there are no vessels to consume it because there is no methanol to buy. We are trying to break the situation by helping create a market.”
Christiansen also announced Maersk plans to purchase more green fuel startups in the time to come.
“We definitely expect to invest in more because so much needs to happen. We want to stimulate the market in all technologies and in all geographies.”
Maersk expects the investment to assist WasteFuel to build bio-refineries, with the first fuel expected to be set in 2024. Buffett’s Berkshire Hathaway Inc. invests in WasteFuel via its private-plane unit, NetJets.
Some Green Fuel Projects of Maersk:
- Biodiesel which is sourced from food waste such as used cooking oil. Maersk is already utilizing it in some ships but the problem is it’s becoming scarce, as stated by the CEO Soren Skou said last month.
- E-Methanol which is sourced from green hydrogen and captured CO2. Maersk expects this fuel may be what turns shipping carbon neutral in the long term because it has scalability advantages. Maersk signed its first contract for the fuel for a ship that will operate in 2023 last month.
- Bio-Methanol which is sourced from sustainable biomass such as feedstock. This is the type that WasteFuel develops and it’s cheaper than E-methanol so Maersk sees this as a key short- and medium-term solution to cutting CO2. In the long-term, biomass shortages may pose limitations.
- Ammonia for which Maersk hasn’t yet started experiments but sees it as a potential green marine fuel of the future. The advantage is that it’s already being produced for other uses while the main disadvantage is that it’s highly toxic.