Major investment aims to drive progress with decarbonization via synthetic fuels production

Japan’s shipping giant Mitsui O.S.K Lines (MOL) is to invest in U.S.-based e-fuels producer HIF Global through its wholly-owned subsidiary MOL Clean Energy aiming to reduce carbon emissions by promoting the establishment of a ‘robust’ e-fuel and CO2 supply chain.

As informed, HIF Global has already laid the groundwork for the annual production of 4 million tons of synthetic fuel and e-methanol using green hydrogen derived from renewable energy and recycled CO2 across four countries: four countries: the U.S., Chile, Uruguay, and Australia.

According to a statement from MOL, e-fuels and e-methanol make for ‘extremely’ attractive fuel sources as the entire lifecycle of these products – from production to use of the final product – is projected to ‘substantially’ cut down on carbon emissions, making it adept for rapid commercialization.

In fact, as per Germany’s e-Fuel Alliance, since e-fuels are produced from renewable energy sources (for instance wind, solar or hydroelectric power), they do not release any additional CO2 into the atmosphere, making them suitable for broader adoption, with the chance of e-fuels eventually replacing conventional fuels.

E-methanol is also expected to be adopted as an alternative marine fuel that could contribute to the decarbonization of the shipping industry. While key legislations for renewable hydrogen and its derivatives like e-methanol are still in the making in Europe and elsewhere, certain regulations could give companies like MOL the signal they need to invest more.

One of them is the ‘FuelEU Maritime regulation’, which will be implemented from January 2025. The regulation was adopted by the EU to ‘increase the share of renewable and low-carbon fuels in the fuel mix of international maritime transport within the EU‘ while ensuring the smooth operation of maritime traffic and avoiding interuptions in the internal market.

Within this context, building up to the investment from MOL, HIF Global is expected to start with the wider production of e-gasoline and e-methanol. Additionally, as disclosed, the company is targetting the future production of synsthetic sustainable aviation fuel (e-SAF) and synthetic chemicals, aiming to further contribute to the decarbonization of all types of mobility.

In August 2024, HIF Global’s e-fuel portfolio was given another boost with a whopping $36 million investment from Japan Organization for Metals and Energy Security (JOGMEC) which provided the equity financing via Idemitsu Efuels America Corp. This move is said to be JOGMEC’s ‘first time’ to offer an equity investment for e-fuel projects.

Months before that, in March, MOL reached an agreement on the joint development of an e-fuel and e-methanol supply chain, having signed a memorandum of understanding (MoU) with Idemitsu Kosan, HIF USA (HIF Global’s subsidiary) and HIF Asia Pacific.

The parties involved stated back then that they would work on developing a synthetic fuel/methanol supply chain, including the transportation of CO2 as a raw material. This was mostly to be done via feasibility studies of CO2 marine transport from Japan to HIF’s overseas production plants, a supply chain to transport goods produced by HIF to Japan, and of ‘cost competitive’ mobility of CO2 and synthetic methanol.

Following MOL’s investment and when combines with the investment by Idemitsu and existing shareholders announced in May this year, HIF Global has reportedly secured well over $200 million of new funding year-to-date to fund the development of its e-fuel projects globally.