Maersk announce investment into biomass research
Shipping giant Maersk has announced an investment into biomass research in a bit to reduce its bunker fuel consumption.
According to the company, which has an annual fuel bull of USD 7 billion, there has been no prior research into the possibility of using biomass in the shipping industry.
Following extensive investment into greater vessel efficiency, the company is now looking into alternative fuel sources through two major projects.
The projects focus on realising the marine fuel potential of one of the worlds most abundant and sustainable biomass resources: lignin.
Potential in a relatively uncharted area
In nature, lignin is a complex organic polymer found in plants. The more lignin there is in wood the sturdier and stronger it is and the more efficiently it burns. But lignin is also released in large quantities as a residue during the production process of paper as well as advanced bio-ethanol.
“Lignin has a variety of industrial uses already because of its chemical characteristics, energy content and its abundance; yet its potential as a marine diesel fuel is a relatively uncharted area,” says Peter Normark Sørensen, with Maersk Oil Trading, the Maersk Group’s oil buying arm.
In February, Maersk signed a memorandum of understanding (MOU) with Progression Industry—a spin-off company of Eindhoven University of Technology—to develop a viable marine fuel from lignin that meets stringent parameters on price, technical performance, sustainability and emissions.
Opportunities and challenges in biomass
A separate project called ‘Biomass for the 21st Century’ is co-funded by the Danish National Advanced Technology Foundation and involves Maersk , DONG Energy and several other companies and academic institutions.
Professor Claus Felby at the University of Copenhagen is leading the project, which is also looking at lignin as a potential marine fuel as well as other sustainable sources of biofuel with consideration for logistics and scale production challenges.
A detailed report released in September outlined the scope of the project: “If either of these projects is able to make a biofuel that meets our requirements that would be very exciting and could let the industry and markets focus on the challenges that would follow—the scale and logistics required to make it a commercial alternative,” says Sørensen.
Maersk will buy 50,000 tonnes
The agreement between Maersk and Progression Industry states that if Progression can produce a lignin based fuel that meets Maersk’s criteria then Maersk will buy 50,000 tonnes of this fuel.
“For the past 75 years, the shipping companies have used oil, but looking at the next 75 years this is likely to change. In the longer term oil is simply going to run out, so we need to start looking for alternatives,” says Jacob Sterling, head of Environment and CSR in Maersk Line.
“The great thing about biofuels is that they would not only secure a future fuel supply, they will also greatly reduce our CO2 and SOx emissions ,” says Sterling.
XPO Logistics Completes Spin Off of GXO Logistics
XPO Logistics has completed its spin-off of GXO Logistics, creating two independent public companies.
GXO Logistics today marked the occasion by ringing the opening bell on the New York Stock Exchange. GXO leadership and board members were in Manhattan to mark the “exciting milestone in GXO’s history”, opening Wall Street and celebrating the business’s first day of regular way trading.
“We consider it a privilege to launch GXO as a new company at the top of the industry — the world’s largest pure-play logistics provider,” said chief executive Malcolm Wilson, in a statement. “We have a powerful platform for future growth, including our culture of innovation, strong customer relationships, seasoned leaders and a world-class team. This is day one of unlocking vast new potential for our company.”
GXO Logistics in Brief
- CEO: Malcolm Wilson (formerly CEO, XPO Logistics Europe)
- Employees: 94,000 approx.
- Warehouse capacity: 208m sq.ft
- Key customers: Apple, Nike, Whirlpool, Nestlé
XPO’s Pure-Play Strategy
XPO Logistics announced plans to spin off its logistics division in December 2020, with the intention of creating two pure-play entities focussed on contract logistics (GXO) and freight transportation (XPO).
In an interview last month, GXO Chief Investment Officer Mark Manduca said there is “massive scope” for growth both organically and through M&A activity. "A deep pool of potential new business exists for GXO, both through share gain and penetration,” he added, explaining that companies are increasingly looking to outsource logistics as supply chains become ever complicated.
GXO is a leader in logistics automation and robotics, leveraging AI and machine learning to ‘turn logistics into a competitive advantage’ for its customers. It has approximately 94,000 employees, and counts Apple, Nike and Whirlpool among its blue chip customers. The company says it will also look to strengthen its presence in other high-growth areas, primarily ecommerce, apparel, technology, food and beverage, and consumer electronics. The company has 208m+ sq.ft of warehouse space across 869 locations in 27 countries.