21 September (Lloyd's List) - CHINA Cosco Shipping Corp, Shanghai International Port Group, State Power Investment Corp, and China Certification & Inspection Group have agreed to work together to build a green methanol supply chain.

The four state-owned companies will work together on the production, transport, refuelling, and certification of green methanol for ships, according to a statement from Cosco Shipping, which did not specify how much methanol would be made, or by when.

This project marks China’s first such effort in establishing an all-inclusive green methanol industrial chain for marine fuel, the statement said.

As the global order for methanol-powered ships has surpassed 200, Cosco Shipping highlighted that the project is positioned to meet increasing demand. Cosco Shipping ordered 12 methanol dual-fuel container ships in the past October, each with a capacity of 24,000 teu. 

The project is focused on producing bio-methanol, which is derived from methane captured from decomposing organic waste at landfills, according to sources familiar with the deal.

It will be situated in northeast China, which is renowned for its ample farmland, providing an abundant supply of crop straw, a key feedstock for bio-methanol, the sources said. 

Cosco Shipping’s statement said the four parties would exploit their advantages in different sectors to establish a stable and sustainable green methanol industrial chain that complies with domestic and international standards. 

As one of China’s big-four state-owned power generators, which together contribute nearly half of the country’s electricity supply, SPIC holds the highest proportion of renewables in its fuel mix compared with the other three, according to a rating report released by Fitch Ratings in April. 

CCIC, the international inspection, testing, and certification enterprise group, provides services in a wide range of industries, including transportation and new energy, according to its website. 

Leading companies in China’s shipping sector have made attempts at green methanol application. This activity has included Shanghai International Port Group and Maersk signing a memorandum of understanding in March to explore green methanol fuel vessel-to-vessel bunkering operations.

AP Moller Holding, the parent company of Maersk, has established C2X, a methanol production company, with the goal of achieving a capacity exceeding 3m tonnes per year by 2030.