Hyundai Books $2B Order for 12 Methanol Boxships Linked to CMA CGM

South Korean shipbuilding group Korea Shipbuilding & Offshore Engineering is reporting the win of a massive $2 billion containership construction contract for a “European shipowner.” While the yard is not identifying the customer, the order is widely being linked to France’s CMA CGM Group as the next step in the carrier’s efforts toward decarbonization.

Reports indicate the contract is for 12 methanol-fueled containerships. The order is said to be vessels with a capacity of 13,000 TEU with the deliveries completed by the end of 2026. KSOE said the vessels will be built at its Hyundai Samho Heavy Industries shipyard in the port of Yeongam.

The order is significant because CMA CGM Group began its efforts by investing heavily in LNG dual-fueled vessels. The line said as of the end of 2022 that it had more than 30 dual-fuel vessels and would reach 77 dual-fuel vessels by 2026. In addition to its construction of the new vessels, the company is also investing in the technologies and the production of alternative fuels including e-methanol.

Interest in methanol as the next fuel source has been rising rapidly over the past year. While for many ammonia is viewed as the ultimate solution the technologies are not yet available but methanol technology is ready even if the sources of the fuel still require more development.

DNV which tracks orders on its Alternative Fuels Insight database reports there are 59 methanol-fueled ships on order due for delivery by 2028 with the bulk of the orders, 47 vessels, in the containership sector. To date, methanol is primarily being used to fuel chemical tankers, although the first applications for tugs and other smaller vessels have also begun. 

“Methanol has reached 13 percent share of alternative fuel orders in record time,” wrote DNV’s principal consultant Martin Wold in a social media posting at year’s end. He predicted, “the interest and pipeline is building.” DNV said there were 35 methanol-fueled vessels ordered in 2022.

Container shipping is emerging as a first mover in the methanol sector. It was selected as the fuel source for nearly a quarter (21 percent) of all the containerships ordered in 2022 according to Clarkson. The new order in addition to contributing to the growth of methanol also demonstrates the carriers' intent to continue to invest in new vessels despite the current slowing in volumes and falling freight rates.

Hyundai is also emerging as one of the leaders in building methanol-fueled containerships. The order from CMA CGM follows the previous large orders from Maersk for methanol vessels. The company reports since the Maersk order in August 2021 it has booked a total of 47 orders for methanol-fueled containerships.