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Hapag Wins Tender from Leading Brands to Provide Biomethane Shipping

Hapag-Lloyd
Hapag-Lloyd won the first tender from a collective of major brands to provide low-emission shipping services

Published Apr 17, 2024 5:14 PM by The Maritime Executive

 

In a first-of-its-kind initiative designed to demonstrate the potential of collective efforts to drive the decarbonization of shipping, a group of leading consumer and manufacturing companies banded together to contract for shipper services from Singapore to Rotterdam. The Zero Emission Maritime Buyers Alliance (ZEMBA) reports Hapag-Lloyd won its first tender for ocean shipping.

Under the terms of the agreement, well-known brands including Amazon, Patagonia, Bauhaus, New Balance, Nike, REI, and others agreed to purchase over one billion TEU miles on the route between Singapore and Rotterdam in 2025 and 2026. Hapag as the winner of the tender has agreed to provide an independently certified and exclusive waste-based biomethane service. 

According to the organizers, the project will achieve at least a 90 percent reduction in greenhouse gases on a lifecycle basis relative to fossil fuel-powered shipping. ZEMBA expects to avoid at least 82,000 metric tonnes of CO2 emissions over the two years of the agreement.

ZEMBA and Hapag will utilize a book and claim system to facilitate verification and credible and appropriate allocation of the environmental attributes of the biomethane shipping service. The program highlights that ZEMBA members and Hapag are working with the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping and RMI on the development of a best-in-class, nonprofit maritime book and claim system.

“Our collective procurement approach is working, and we look forward to continuing to push the boundaries of what’s technically and economically feasible in subsequent tenders, with a strong focus on maritime e-fuels,” said Ingrid Irigoyen, President and CEO of ZEMBA. “Through this first set of deals, ZEMBA members are reducing emissions in the near term, which is critical.”

Hapag CEO Rolf Habben Jansen points to this project as a demonstration of the partnership required to support the shipping industry’s efforts for decarbonization. Hapag this week as part of its 2030 strategy reiterated a goal of net-zero ship operations by 2045 with Jansen saying today that partnerships such as ZEMBA will help to push the boundaries of what is possible.

The consortium made up of many of the largest and best-known consumer brands launched a request for proposals for zero-emission shipping services in September 2023 six months after the project was launched. The RFP provided for 600,000 TEU calling for sufficient capacity from the carriers to cover aggregate demand for 6,000 nautical miles over three years. ZEMBA said it would negotiate a “green premium” for the aggregated demand of its members. The green premium accounted for the added cost of operating a vessel using zero-emission fuels.

Based on forecasts that e-fuels and nonbiological fuels will enter the market by 2027, ZEMBA decided to revise the first tender to focus on 2025 and 2026. A second tender is planned for later in 2024 focusing on e-fuel. ZEMBA reports they are currently working with participants across the maritime value chain to develop e-fuel infrastructure, bunkering, ship design, and other details. 

They believe the ZEMBA’s tender process will also provide insights to inform the development of a global maritime decarbonization policy. The Aspen Institute will work with cargo owners to convey lessons learned from ZEMBA’s tender process to support the International Maritime Organization’s development of lifecycle assessment guidelines. The group worked with organizations including Lloyd’s Register Maritime Decarbonization Hub to develop the tender program.