Japan's First Zero-Emission Ship Base! Maersk and Mitsubishi Gas Chemical Will Supply Green Methanol in Japan

Danish shipping group Maersk and Japan's Mitsubishi Gas Chemical will build Japan's first green methanol supply base in the port of Yokohama in southwestern Japan, an emerging fuel that will help decarbonize the shipping industry.

The two companies and Yokohama City Port are about to sign a memorandum of understanding on the zero-emission ship base project. The parties plan to start supplying green methanol fuel to Maersk and other ships by the end of 2024. The fuel will be sourced by Maersk from overseas and from Mitsubishi's gas plant in Niigata Prefecture, north of Tokyo.

Green methanol is made from food and livestock waste, and the fuel, along with ammonia energy, will help decarbonize maritime transport between Japan and countries around the world. The International Renewable Energy Agency predicts that by 2050, the project will produce approximately 385 million tons of green fuel per year.

According to the Methanol Institute, a trade group, green methanol can reduce greenhouse gas emissions by 60% to 95% compared with heavy oil, a traditional ship power fuel. However, its low output and high price (2-4 times more expensive than heavy oil) hinder its widespread use.

Maersk started sailing the world's first green methanol-powered ship in October 2023. The company has ordered 25 such ships and plans to put them into service in Asia starting next spring for routes between Europe and North America.

Countries are decarbonizing maritime transportation by establishing "green shipping corridors" and realizing zero-emission transportation routes. The establishment of supply bases is of great significance to ensuring green ship services at domestic ports. In July 2023, the International Maritime Organization issued a statement to achieve zero carbon emissions from ocean-going ships by around 2050.

As companies everywhere face policy pressure to reduce carbon emissions from their supply chains, initiatives to develop less carbon-intensive logistics networks are gathering pace.

From 2024, ships traveling to and from the European region will need to purchase emissions allowances under the continent's emissions trading scheme. The framework will apply to ships operating between EU member states and the European Economic Area (including Iceland, Liechtenstein and Norway) with a gross tonnage of more than 5,000 tons.