HMM readies order for methanol-powered newbuilds

South Korean shipping major HMM is preparing an order for new containerships powered by alternative fuels as part of its future growth strategy.

The strategy was announced in July this year with HMM assigning $11.3 billion for future investments, including expansion of its eco-friendly ships from the current 820,000 TEU to 1.2 million TEU by 2026.

The likely candidates to build the vessels will be Korean shipbuilding heavyweights in line with the Korean government’s strategy to interlink its shipping and shipbuilding sectors securing work for its shipbuilders as the maritime industry pushes forward in building green ships.

Specifically, the company has reportedly invited tenders from four of its compatriot shipbuilders: Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI), Daewoo Shipbuilding and Marine Engineering (DSME), and HJ Shipbuilding and Construction. The shipyards have been asked to provide their best prices for a batch of up to nine 8,000 TEU methanol-fuelled vessels slated for delivery between 2025 and 2026.

“We are exploring the possibility of securing containerships using alternative fuels, including methanol-powered containerships, in line with our mid and long-term strategy announced in July this year,” an HMM Spokesperson confirmed to Offshore Energy.

South Korean flagship firm did not confirm the potential size of the containerships being considered.

HMM is following in the footsteps of its European and Asian counterparts, Maersk, CMA CGM and COSCO which have backed methanol as the alternative fuel for the maritime industry that can bring down emissions today.

Methanol engine technology is available and proven in operation, the fuel is relatively easy to handle and safety challenges have been deemed manageable, which means that the bunkering procedure is relatively simpler and less expensive when compared to ammonia.

What is more, methanol is biodegradable which is another advantage in cases of fuel spills as it would not be harmful to the marine environment. Conventional methanol from natural gas is widely available, and estimates show that it can cut NO_x by 60%, and CO₂ emissions from the vessel’s operations by up to 15% on a tank-to-wake basis, compared to conventional marine fuels.

The availability of green methanol remains a challenge, and companies like Maersk have been working hard on securing the supply by building partnerships with producers and ensuring the demand would be there to avoid the chicken-and-egg scenario.

HMM has been investing heavily in LNG as a potential bridging fuel for its vessels as it eyes carbon neutrality for its operations by 2050. Last year, HMM welcomed into the fleet the first of eight LNG-ready 16,000 TEU containerships, HMM Nuri.

The delivery was followed by a contract with DSME and HHI for twelve 13,000 TEU container vessels, worth $ 1.57 billion. Under the agreement, DSME and HHI will build six vessels, respectively, scheduled for delivery in the first half of 2024. All ships will be installed with hybrid scrubbers and designed to be LNG-ready. Over 80% of HMM’s fleet is scrubber-fitted.

The company has also been exploring the benefits of biofuel on its ships with trial voyages carried out last year. In 2021, HMM joined hands with POSCO, Lotte Global Logistics, Lotte Fine Chemical, Korean Register, and KSOE to develop green ammonia. Under the cooperation deal, KSOE plans to develop an ammonia-powered ship, which will be certified by the Korean Register, while HMM and Lotte Global Logistics will take charge of testing and operating the vessel.