The project aims to be operational in 2025 with a final investment decision coming as soon as 2023.
Ørsted representatives did not respond to questions about the specific location for the planned facility.
“To transition towards decarbonization, we need a significant and timely acceleration in the production of green fuels," said Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands, A.P. Moller – Maersk. "Green methanol is the only market-ready and scalable available solution today for shipping."
In addition to its partnership with Ørsted, Maersk will five other companies -- CIMC ENRIC, European Energy, Green Technology Bank, Proman, and WasteFuel -- to source at least 730,000 tons of green fuel per year by the end of 2025.
Power-to-x is a process of converting electricity generated by renewable energy sources, like wind and solar, to "different types of energy carriers for use across multiple sectors, or to be reconverted back into power," according to the International Renewable Energy Agency.
Power-to-x opportunities include power-to-hydrogen and power-to-gas, like what has been announced by Ørsted and Maersk, as a means to clean up difficult to decarbonize sectors like marine transport.
Ørsted and Maersk also have a partnership to develop a 1,300 MW green fuels facility in Copenhagen, Denmark. The Gulf Coast facility would be Ørsted's entrance into the U.S. power-to-x market.
Difficult to decarbonize
In 2021, the International Maritime Organisation set a goal of cutting the carbon intensity of all ships by at least 40% by 2030. For the first time ever, the group established an energy efficiency rating system for ships. The goal is for key stakeholders -- port authorities and administrators -- to provide incentives for ships with higher energy efficiency ratings.
The global maritime shipping industry contributes about 3% of global greenhouse gas emissions every year.
Availability of alternative fuels, like green hydrogen, are in short supply and will likely require government assistance to meet climate goals.
In the U.S., $9.5 billion for green hydrogen hubs and electrolysis manufacturing programs was included in the Bipartisan Infrastrastructure Law. The Biden administration has said it hopes to cut the cost of clean hydrogen to $1 per 1 kilogram in one decade. Green hydrogen makes up only 5% of the hydrogen produced in the U.S. with the rest coming from natural gas.
The U.S. Department of Energy's (DOE's) National Energy Technology Laboratory determined that U.S. clean hydrogen production and use must increase 50 fold by 2050 in order to meet the country's decarbonization goals.
Report findings noted while many opportunities exist for hydrogen's growth, government leadership would be critical in achieving decarbonization goals. This would include tax credits and incentives, research, development, and demonstration funding.
In February, a leading clean energy developer said it will explore developing a green hydrogen hub along the Texas Gulf Coast to support the decarbonization of heavy industry.
Apex Clean Energy, which manages more than 2 GW of clean energy projects in multiple states including Texas, entered into a nonbinding memorandum of understanding with investment manager Ares Management Corporation, energy infrastructure developer EPIC Midstream Holdings, and the Port of Corpus Christi to explore prospects of the "gigawatt-scale" project.
The group said the project would aim to produce green hydrogen and derivative green fuels "in volumes not yet seen" in the U.S. The project would feature green hydrogen production, storage, and transportation, including a newly constructed pipeline and green fuels hub to be located at the Port of Corpus Christi, they said.
John Engel is the Content Director for Renewable Energy World. For the past decade, John has worked as a journalist across various mediums -- print, digital, radio, and television -- covering sports, news, and politics. He lives in Asheville, North Carolina with his wife, Malia.
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