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Maersk Joins Forces with Industry Peers, Customers to Develop Next-Gen Shipping Fuel

A.P. Moller - Maersk has partnered with BMW, H&M, Levi Strauss and more to explore LEO — a blend of lignin and ethanol — that could be part of a solution for sustainable shipping.

From the phone, tablet or computer you are reading this on, to the fruit you eat, the trousers you wear or the car you drive — roughly 80 percent of the goods you use every day are delivered to you by sea.

Shipping accounts for 2-3 percent of global CO2 emissions, a proportion that is set to increase as global trade continues to grow at a sluggish but steady pace — hence, the urgent need for the industry to reduce its environmental impact.

So, shipping giant Maersk and Wallenius Wilhelmsen — a leader in RoRo shipping (roll-on/roll-off shipping for cars and other vehicles) and vehicle logistics — have teamed up with Copenhagen University; as well as major customers including BMW Group, H&M Group, Levi Strauss & Co and Marks & Spencer to form the LEO Coalition, which will explore the environmental and commercial viability of LEO fuel (a blend of lignin and ethanol) for shipping.

As part of the global recognition of the importance of sustainably meeting the world’s demand for goods, leading companies in many sectors are actively exploring solutions to reduce emissions along their entire value chains — and the transportation and logistics sector, which delivers those goods, is a vital player. But marine shipping has very different fuel requirements than automotive or aviation.

“Shipping requires bespoke low-carbon fuel solutions which can make the leap from the laboratory to the global shipping fleet. Initiatives such as the LEO Coalition are an important catalyst in this process,” explains Søren Toft, COO of Maersk, which also just signed onto the UN Global Compact's Sustainable Ocean Principles, committing to take action to secure a healthy and productive ocean.

Lignin. a structural bio-polymer that contributes to the rigidity of plants, is isolated in large quantities as a byproduct of lignocellulosic ethanol in pulp and paper mills. The polymer, which has been gaining popularity in recent years as a sustainable feedstock for bioplastics, is also often incinerated to produce steam and electricity.

“Our customers’ ambitions on sustainability are increasing rapidly, and we applaud this development. Clearly, LEO would be a great step forward for supply chain sustainability, and it has the potential to be a viable solution for today’s fleet, and not just a future vision,” says Wallenius Wilhelmsen CEO Craig Jasienski.

Sea transport logistics plays an important role for the BMW Group's vehicle production and distribution processes all over the world. As the company fosters sustainability along its entire value chain, participation in the LEO project is a valuable commitment.

“Climate change is an ongoing reality and a key challenge to all industries, including fashion,” says H&M COO Helena Helmersson. “We are aware of our responsibility to stay within the planetary boundaries; and are committed to reduce our impact in every aspect of our value chain, including how our products are shipped to consumers around the world. This coalition gives us the opportunity to explore the development of a low-carbon fuel for shipping today."

Copenhagen University is currently running the laboratory-scale development of this potential marine fuel. The project aims to move into phase II — testing the fuel on actual vessel engines — in the second quarter of 2020. Following a successful phase II, phase III — the scaling up of LEO fuel production — will begin.

As John Kornerup, Maersk's Chief Advisor for Climate Change, told Supply Chain Dive, as LEO fuel is still in the developmental phases, it's too early to know if the fuel will result in higher rates or surcharges for shippers: "It is widely agreed that from a cost perspective, sustainable fuels will be more expensive than fossil fuels. But we must always have into consideration the high price paid by society in relation to the indirect costs of CO2 emissions."