(Bloomberg) -- A.P. Moller-Maersk A/S, one of the world’s largest oil consumers, will reach its goal of becoming carbon neutral ahead of a 2050 deadline because the green transition in shipping is turning out to be easier than expected, its chief executive said.
“It will go a lot faster,” CEO Soren Skou said. The Copenhagen-based company will probably announce a new target at an investor day, planned for March, that will focus on environmental and social issues, he said.
Maersk, the world’s largest shipping line, consumes about 12 million tons of marine oil per year, roughly equal to all the oil produced in the world in a single day. The company is betting it will be able to replace that with carbon-neutral fuels such as methanol or ammonia, the CEO said.
“We initially thought the challenge would be to develop a new way to run ships,” Skou said. “But now we think we can keep the concept of the combustion engine we already know and then use methanol, or perhaps ammonia, with relatively few modifications.”
Earlier this year, Maersk ordered eight new ships that can run on methanol, for $1.4 billion. That’s a premium of about 10% to normal vessels, an extra cost that is “manageable,” Skou said. In addition, Maersk expects to be able to retrofit existing ships with the new technology.
“That means we don’t need to replace all our 730 ships,” he said. “It will make it easier.”
Read more on Maersk’s green shift:
Maersk Buys Stake in Electrofuel Startup in Race to Ditch Oil
Maersk Joins Buffett to Invest in Startup Promising Green Fuel
Maersk Makes $1.4 Billion Green Bet on Methanol-Fueled Ships
Maersk’s Green Shipping Plan Runs Up Against Scarce Cooking Oil
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