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Green fuels are more expensive, but you need to think long term: CEO of Maersk

The container ship MORTEN MÆRSK leaves for Hamburg on 22 April 2020.

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Shipping giant Moller-Maersk’s CEO admitted to CNBC on Thursday that switching to green fuels would be costly, but stressed the importance of focusing on the bigger picture rather than short-term concerns.

Soren Skou’s comments came a day after his company said it wants the entire business to achieve zero greenhouse gas emissions in 2040, 10 years ahead of its previous target.

“When we hit the road to carbon neutrality, we are going to use … clean fuels,” said Skow of Squawk Box Europe on CNBC. As a starting point, these fuels were “probably two to three times … much more expensive,” Skow said.

“But we have been looking at this for 20 years and so we think the inflationary impact will be very modest when it comes to the consumer.”

“For example, today we spend about $ 400 on each container of fuel,” Skou said. “If it triples, we will need to spend another $ 800 for each container.”

“That’s a lot, of course, but … inside a container you have, for example, 8,000 pairs of sneakers, so that’s 10 cents for a pair of sneakers. That’s why I think … it will be acceptable to the consumer. “

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According to the International Energy Agency, international shipping – the most important screw in the global economy – accounted for roughly 2% of “global energy-related CO2 emissions in 2020”.

With growing concerns about sustainable development and the drive of large economies and businesses around the world to reduce emissions and reach zero targets, the sector will need to find new ways to reduce the environmental impact of its operations.

Back in August, Maersk announced that it was ordering a number of large ocean-going vessels capable of running on so-called carbon neutral methanol. The firm said the vessels will be built by South Korea’s Hyundai Heavy Industries and will be able to carry around 16,000 containers.

Maersk said the ships will be powered by a dual-fuel engine, driving up costs.

“The additional capital investment … for the dual-fuel capability, which allows it to run on methanol as well as conventional low sulfur fuels, will be in the range of 10-15% of the total cost,” it said.

Shipping is not a unique attempt to find more sustainable ways to support operations. In aviation, for example, there has been a lot of discussion about the potential for green aviation fuel, or SAF.

Last October, Ryanair CEO Michael O’Leary acknowledged the need for ambitious targets for sustainable aviation fuel, but also raised concerns about how that might affect food prices.

During a discussion at CNBC’s Sustainable Future Forum, O’Leary said his firm is investing “a lot of money” with Trinity College Dublin in SAF research.

In April 2021, the two organizations opened a Sustainable Aviation Research Center with the support of an airline donating € 1.5 million ($ 1.72 million). In addition to SAF, the center will focus on noise mapping and zero-carbon propulsion for aircraft.

Ryanair itself has set a goal to have 12.5% ​​of its flights with SAF by 2030. But speaking to CNBC’s Steve Sedgwick, O’Leary said he thought it was “very there.”

He went on to articulate his thoughts on the broader implications of increased use of SAF. “That said, I’m worried about the longer term sustainable aviation fuel … how will this affect food prices in the future?”

“I think in the next 10 or 20 years we will reach a point where there will be problems not only for the aviation industry, but for the industry as a whole, related to sustainable aviation fuels, which can have a positive impact on food. Prices. ”


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