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How Green Is Maersk’s Bio-Ethanol Shipping Fuel?

Exploring the climate impact of Maersk’s new bio-methanol shipping fuel and what it means for the shipping industry’s quest for greener solutions.

By Sneha Tete, Integrated MA, Certified Relationship Coach

Created on Sep 27, 2025

Exploring the climate impact of Maersk’s new bio-methanol shipping fuel and what it means for the shipping industry’s quest for greener solutions.

In a bid to decarbonize the maritime industry, Danish shipping giant Maersk has announced it will fuel its vessels with bio-methanol, a move framed as a significant step toward reducing global shipping emissions. As the world’s second-largest container shipping company, Maersk’s actions ripple across the supply chain, influencing suppliers, customers, and competitors alike. But how green, scalable, and transformative is bio-methanol really?

The Urgency to Decarbonize Shipping

Global shipping is responsible for approximately 3% of worldwide greenhouse gas emissions, rivalling the output of entire developed nations. Most cargo ships traditionally burn bunker fuel—a dense, carbon-heavy residual oil left over after traditional diesel and gasoline production. With mounting pressure from governments, consumers, and corporate clients to cut emissions, shipping companies are searching for effective low-carbon alternatives.

In 2023, Maersk committed to achieving net zero across its operations by 2040.
More than 60% of Maersk’s largest customers have their own tangible net-zero targets, which amplifies the demand for solutions that reduce logistics-related carbon footprints.

What is Bio-Methanol?

Bio-methanol is a type of alcohol-based fuel produced by converting biomass—such as agricultural waste, straw, or wood—into methanol.

Unlike conventional marine fuels, bio-methanol can be produced from waste products that would otherwise go unused, including straw, fruit tree clippings, and wood waste.
It can be used in specially designed dual-fuel engines capable of burning both conventional fuel and methanol, enabling a smoother transition for the industry.

This fuel is considered to be a “drop-in” solution, meaning ships designed or retrofitted to run on methanol can switch between bio-methanol and fossil alternatives depending on availability.

How Is Maersk Sourcing Its Green Methanol?

Maersk’s bio-methanol supply chain is built around partnering with leading producers worldwide. The company recently signed a significant long-term deal with LONGi Green Energy Technology Co., Ltd, a partnership focused on producing bio-methanol from straw and fruit tree cuttings at a facility in Xu Chang, Henan province, China.

FIRST VOLUMES: Expected in 2026, with production ramping up towards the end of the decade.
SUSTAINABILITY REQUIREMENT: At least 65% reduction in GHG emissions over the fuel’s lifecycle compared to fossil fuels.
DUAL-FUEL FLEET: As of 2024, Maersk operated seven dual-fuel methanol-enabled vessels, with dozens more on order.
GOAL: By 2027, Maersk’s contracts will cover over 50% of the projected dual-fuel fleet’s methanol demand.

The Lifecycle Emissions Perspective

The core climate advantage of green methanol is its ability to sharply reduce lifecycle greenhouse gas emissions compared to traditional marine fuel. But how is this measured?

Low to very low GHG emissions: Depending on the production method, Maersk defines “green fuels” as those with 65%-95% lower emissions compared to fossil fuel, when evaluated from production through to combustion.
Sustainable feedstocks: Bio-methanol made from wastes and residues avoids competing with food crops—a frequent criticism of first-generation biofuels.
Lifecycle Analysis (LCA): True “green” credentials depend not only on tailpipe emissions but on the impact at every step: feedstock harvesting, production process, distribution, and onboard combustion.

In Maersk’s case, the agreed supply achieves around a 65% reduction over bunker fuel baseline—significant, but not zero, and highly reliant on sourcing sustainability and supply chain transparency.

How Green Is Maersk’s Green Methanol Really?

Aspect	Potential Benefit	Limitations
GHG Emissions	Reduces lifecycle GHG emissions by 65% or more vs. traditional marine fuel	Dependent on sustainable feedstocks; not always zero-carbon
Feedstock	Uses agricultural/forestry waste (no direct competition with food)	Availability and supply scale limited; indirect land use impacts possible
Compatibility	Dual-fuel engines enable ships to use both methanol and oil-based fuels for flexibility	Fleet retrofits and new builds require investment; not all existing ships adaptable
Air Quality	Lower SOx, particulate, and NOx than heavy fuel oil	Methanol still releases CO2 upon combustion (though less than bunker fuel)
Scalability	A step toward industry-wide decarbonization	Current global production (approx. 10.3 million tonnes/year) is a fraction of demand; must reach ~540 million tonnes/year by 2050 for full sectoral shift

Why Methanol and Not Other Alternative Fuels?

Bio-methanol is only one contender in the search for green marine fuels. Maersk and the broader industry have considered, and continue to invest in, various alternatives:

Ammonia: Zero carbon at combustion, but toxic to handle, and its production is currently energy-intensive.
Hydrogen: Clean-burning, but storage, infrastructure, and energy density present practical challenges.
Bio-methanol: Less disruptive to existing ship engine designs and global bunkering infrastructure, and can leverage a growing pipeline of waste-derived supply.
Electrification (batteries): Effective for port operations, ferries, or short crossings, but not for long-haul ocean container shipping due to energy density limitations.

Maersk’s strategy is best summarized as “the future is one of many fuels,” with bio-methanol leading the way for deep-sea container ships, but not necessarily crowding out other options as technology and policy progress.

The Challenge of Supply and Demand

Supply constraint is currently the biggest brake on bio-methanol’s green potential. Demand from major shipping and logistics players is rising, but the production of sustainable methanol is only a small fraction of what would be needed for a large-scale industry shift.

Current annual bio-methanol production: ~10.3 million tonnes worldwide projected by 2029.
Industry requirement for full replacement: ~540 million tonnes annually by 2050.
Prices: Green methanol currently commands a high premium versus fossil bunker fuel; as much as double the cost, depending on region and feedstock.

Ramping up supply will require significant new investment in waste collection, production plants, and supportive infrastructure, as well as supportive policy from governments to level the cost playing field.

Maersk’s Steps Toward a Greener Fleet

Maersk is not simply piloting bio-methanol ships; it is investing in a complete transformation of its vessel operations and supporting infrastructure. Current strategies include:

Fleet Modernization: Dozens of large dual-fuel newbuilds on order, with seven already sailing as of 2024.
Long-Term Fuel Supply Deals: Major contracts with companies like LONGi and OCI Global to secure sustainable bio-methanol supply.
Net-Zero Targets: Obligating suppliers to adhere to strict sourcing criteria to ensure emissions savings, and driving demand via services such as Eco Delivery that allow customers to claim shipping emissions cuts.
Participation in Industry Forums: Pushing for International Maritime Organization (IMO) and government regulations, including green fuel standards and emissions pricing mechanisms.

Maersk also continues to invest in supporting technologies such as electrified port equipment and digital shipping route optimization—essential steps for whole-system emission reductions.

Barriers to Widespread Adoption

High costs compared to fossil fuels: As of now, customers must pay a significant premium for green shipping, challenging widespread uptake.
Feedstock limits: Sustainable residue streams are not infinite; their collection, transport, and conversion come with their own GHG footprint.
Life cycle uncertainties: Indirect effect risks, such as land use change, transportation emissions, and supply chain transparency.
Fuel infrastructure: Though methanol is easier to integrate than hydrogen or ammonia, the current port bunkering network must be scaled rapidly to meet future demand.

The Customer Perspective: Why Multinational Brands Are Onboard

Maersk’s green shipping initiative is driven in part by customer demand. Over 60% of Maersk’s largest customers, including Amazon, Danone, and Volvo, have committed to significant carbon reductions in their supply chain operations to achieve net-zero pledges.

Use of Eco Delivery: Companies can purchase the Eco Delivery service, paying a premium to underwrite Maersk’s investment in lower-emission fuels and to claim the emissions reductions in their carbon reporting frameworks.
Reputational benefit: Brands leverage greener shipping options to market their climate credentials to consumers and investors.

Is Bio-Methanol a Long-Term Decarbonization Solution?

Bio-methanol is a bridge solution. Its robust emissions savings and compatibility with new ship engines provide measurable climate benefits today. However, whether it can serve as a primary solution for the entire marine shipping sector remains uncertain, mainly due to:

Feedstock and production scalability: Long-term supply at the necessary volumes without indirect land use impacts is an unresolved challenge.
Policy landscape: Effective carbon pricing, green fuel mandates, and global standards will be vital to scaling up both demand and responsible production.
Ongoing research and development: The next wave of shipping fuels (such as green ammonia and hydrogen) may become viable at scale over the coming decades, supplementing or even replacing bio-methanol.

For now, bio-methanol represents a transformative lever for shipping giants like Maersk but must be paired with systemic improvements, continued innovation, and strong environmental governance.

Frequently Asked Questions (FAQs)

Q: What exactly is bio-methanol, and how is it made?

A: Bio-methanol is a renewable alcohol produced by converting plant and organic waste (e.g., straw, wood chips) into methanol via gasification and synthesis.

Q: How much does bio-methanol reduce emissions compared to standard shipping fuel?

A: Maersk estimates a 65% greenhouse gas emissions reduction over the full lifecycle compared to typical marine bunker fuel, assuming sustainable feedstock sourcing and best practices.

Q: Can existing ships switch to bio-methanol?

A: Only ships designed or refitted to handle methanol—usually with dual-fuel engines—can switch. Many existing vessels require major retrofits or new builds to accommodate this technology.

Q: Is there enough sustainable bio-methanol to power the entire shipping industry?

A: Not at present. The worldwide supply is only a fraction of potential demand. Substantial scaling of production capacity and sustainable feedstock sourcing is necessary for sector-wide adoption.

Q: What are the environmental risks?

A: Key risks include feedstock over-exploitation, indirect land use impacts, supply chain emissions, and potentially shifting GHGs elsewhere in the system if not carefully managed and verified through independent certification schemes.