Shanghai kicks off green methanol production projectShanghai kicks off green methanol production project

The new green methanol production facility is being built at Shanghai Chemical Industry Park and is seen as a significant move to boost Shanghai International Shipping Hub development. 

Completion of construction is scheduled for the end of December this year and the project will enable Shanghai port to provide refueling services with locally-produced green methanol for the first time. 

The green methanol project aims to convert wet waste and animal manure into biomethane, then fed into the city's gas pipeline. The natural gas is subsequently extracted from the pipeline and transformed into green methanol for use by ships.

Shanghai released a plan in October 2024 to boost green transformation of maritime fuels and will establish a green fuel supply system for shipping by 2030 servicing for both domestic and international markets. The bonded LNG bunkering capacity at Shanghai port is estimated to reach 1m cubic meters, while bunkering capacities for green methanol and ammonia are also expected to reach 1m metric tons.

Last April, Maersk and Shanghai port achieved a milestone as the large methanol-enabled vessel Astrid Mærsk berthed at Yangshan port in Shanghai, for the first green methanol bunkering with simultaneous cargo and bunkering operations in China.

Maersk has been a pioneer in the use of methanol as alternative fuel for large container ships, and many other companies followed suit with newbuilding orders in 2023. However, there are concerns over the lack of availability of green methanol at scale which saw owners turn back to ordered LNG dual-fuel newbuildings, including Maersk which had previously eschewed natural gas powered ships as they are still powered by fossil fuels.