In a significant move towards green shipping, French mainline operator CMA CGM has placed an order for eight 9,200 teu methanol-propelled containerships at Shanghai Waigaoqiao Shipbuilding (SWS) in China. This deal, valued at $1bn, was confirmed by SWS's immediate parent, China CSSC Holdings, in a recent Shanghai Stock Exchange filing. The new vessels are scheduled for delivery in 2027.
These ships, the largest box ships to be built by SWS, are likely to be assigned to mid-haul lanes, such as the Far East-Persian Gulf route. This marks the first time SWS will build methanol-fuelled vessels.
This order represents CMA CGM's fourth round of methanol-powered newbuilding orders. The company ordered six 15,000 teu ships from Dalian Shipbuilding in August 2022 for $1.05bn, with delivery expected in late 2025. Following this, in February 2023, there was an order for twelve 13,000 teu ships at South Korea's Hyundai (OTC: HYMTF ) Samho at $2.05bn and another six 15,000 teu vessels from Jiangnan Shipyard at $1.05bn.
The shipping industry's shift towards green fuel alternatives is highlighted by Alphaliner's report in March that the percentage of methanol-fuelled boxships on order had reached double digits compared to just 1% in the same month the previous year. It indicated that carriers were investing heavily to remodel their fleets for the energy transition, with only 14% of capacity ordered in the second half of 2022 being powered by conventional fuel oil .
CMA CGM currently has 85 LNG-fuelled and six methanol-powered ships on order, demonstrating its commitment to reducing carbon emissions. The company has reported a 50% reduction in its carbon dioxide emissions per teu-km since 2008.
This latest order increases CMA CGM's total orderbook of methanol-fuelled vessels to 32 ships, or 409,600 TEU of capacity, representing 11.7% of the container line's capacity in its current fleet. Methanol as an alternative marine fuel is gaining popularity, with orders for methanol-fuelled tonnage now coming in regularly from diverse shipping segments. The primary challenge for this market will be ensuring the supply of green methanol scales up in time to meet the demands of the new ships as they are delivered.
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