Maersk’s Parent Launches Methanol Company as OCI Also Expands Production

Demand for green methanol and related fuel products continues to grow not only from the shipping industry but other industries that will be equally hard to decarbonize. Projecting exponential growth from the shipping industry as well as road transportation and industrial applications, companies are moving to create new capacity with both A.P. Moller Group, the parent company of Maersk, and OCI Global becoming the latest to announce efforts to build the supply of green methanol.

Timed to coincide with the naming ceremony for the world’s first dual-fuel methanol containership, A.P. Moller Group announced the launch of a new company, C2X, that will build, own, and operate green methanol production. Moller points out that it will be an incubator for the new company having completed a financing round and being the majority owner. A.P. Moller-Maersk, the public company that owns the shipping and logistics company will also be a 20 percent stakeholder in the new company.

Moller points out that methanol is already used in many everyday products, including plastics, glues, textiles, and other applications. Now the shipping industry and other industrial applications look to be an increasingly larger user of the methanol fuels in the efforts to decarbonize. Both Moller and OCI point to the dramatic growth in the order book for methanol-fueled ships. 

OCI has projected growth in the green methanol market of incremental demand of more than six million tonnes by 2028, due to the adoption of green methanol as a shipping fuel, based on the 225 dual-fueled methanol vessels now on order. Longer term, Moller says it anticipates that annual demand for methanol could triple to some 300 million tonnes, with the majority being green methanol.

“Replacing the existing use of fossil methanol with green methanol, and also meeting the growing demand from the use of green methanol as a fuel, requires a step change in the global production capacity of non-fossil methanol,” highlights Moller. C2X they report is being established to address this challenge through investments in large-scale green methanol production facilities and aims to support a variety of customers in the chemicals and shipping sectors who need green methanol to deliver their own greenhouse gas emission reduction targets.

“C2X was founded to enable the energy transition in several hard-to-abate industries, including plastics, glues, textiles, and fuels,” says Robert M. Uggla, CEO of A.P. Moller Holding. 

They plan to have an annual production capacity of more than three million tonnes by 2030. C2X will develop green methanol from various pathways depending on the specifics of the location, and is presently pursuing large-scale green methanol projects near the Suez Canal in Egypt and the port of Huelva in Spain, as well as other opportunities across several geographies.

C2X launches with a strong management team, including a 35-year energy industry veteran, Drian Davis who joins the company from Shell to become CEO. Alastair Maxwell joins as CFO with 30 years of banking experience including at Morgan Stanley and Goldman Sachs, and they will have an initial team of 60 people.

OCI Global, which reports it is currently the largest producer of green methanol, announced that it will double its production capacity to approximately 400,000 metric tons per year. OCI highlights that its off-takers currently include the road fuels market, where it is used as a fuel-blend to reduce emissions from petrol, as well as a building block in a range of industrial applications, and most recently, as a fuel for shipping.

The scale-up plans for production from the company’s operations in Beaumont, Texas include entering into supply agreements for renewable natural gas (RNG) exceeding 15,000 mmbtu per day, as well as securing the waste and development rights from the City of Beaumont. 

This is OCI’s first upstream RNG production facility and production is slated to start in Q1 2025. OCI HyFuels will add green hydrogen-based e-methanol to its production portfolio for the first time based on the growing demand from numerous high-emission industries.

C2X and OCI join a growing list of companies racing to expand or enter the market for green methanol, Analysts have highlighted the opportunities citing that current production plans lag far behind expected demand.