Host: Jim Hagemann Snabe
Category: ⚡ Renewable Energy
Podcast’s Essential Bites:
[0:41] “A few months ago, my daughter asked me a very simple question. Who are your heroes, Dad? I said, well, besides my father, hoping she would get the hint, one of my big heroes is Malcolm McLean. […] In 1955, McLean invented a metal box that changed the world - the shipping container. That invention reduced the cost of shipping cargo by more than 90%. And as a consequence, global trade increased 200 times and lifted hundreds of millions of people out of poverty by connecting their goods to global markets, at very, very low cost.”
[2:13] “McLean's dream was to transform the cargo transportation industry, by making it affordable. It is time to transform it again. We urgently need to make it sustainable. More than 9% of CO2 emissions globally come from transporting goods around the world. So what is the dream? In 2018, the management team of A.P. Moller - Maersk, the global shipping company, I lead as the chairman, made a commitment to make the company carbon neutral by 2050. For some people 2050 sounded like a long time into the future. But in fact, this was a very ambitious dream for a shipping company. To be carbon neutral by 2050, we needed to invent a zero carbon container vessel by 2030. Because then it would take roughly 20 years to replace all of the 750 vessels that we operate.”
[3:26] “In 2018 […] we had already focused a lot of attention on reducing CO2 emissions from shipping. In fact, we had achieved more than 40% reduction per container moved since 2008. That was done by building bigger and more efficient vessels and by slow steaming, which means sailing the vessel slower, so it consumes less fuel. But we were reaching the limit. […] Now, some of the first humans who sailed the big oceans that people from Polynesia had figured out zero carb on shipping by using sails. And it is true that sails can reduce the fuel consumption somewhat, but it cannot deliver on the efficiency and accuracy needed in today's global supply chains. Another alternative is batteries. But for the large vessels sailing the big oceans, the batteries would take up 60% of the capacity of the vessel.”
[5:11] “We knew we had to look for other solutions, and we realized we couldn't do it alone. To help us find a solution, our main shareholder, the A.P. Moller Foundation, donated 400 million Danish Krone to create a global center for zero carbon shipping in Copenhagen. That center would bring together companies and specialists from all over the world, not just from the transportation industry, but also from energy, chemicals, and engineering. And now, less than three years after our big dream, we have found a solution. It is called Power-to-X.”
[5:53] “Power-to-X is not a new technology, nor did we invent it. It is a combination of known chemical processes to convert green electricity to a green fuel. First, you convert the green electricity from solar or wind to green hydrogen. That is done through electrolysis. And then the green hydrogen can be converted to various types of green fuels through chemical processes. The benefit of Power-to-X is that it produces a green fuel that is liquid at normal temperature and can be used in a combustion engine. So instead of spending 20 years to replace all of our 750 vessels, and create a big pile of waste, we believe we can retrofit existing vessels by adding a combustion engine designed for green fuel. And with that achieve zero carbon shipping much, much earlier.”
[7:03] “On top of that Power-to-X is actually a very nice solution for one of the biggest problems in renewable energy systems - the storage problem. When there's too much wind and sun, you can convert the unused electricity to a liquid green fuel that can be used in many different industries. So what are the challenges? […] I often hear the same concern when it comes to sustainability. Can we afford it? And yes, it is true that this green fuel is more expensive than the bunker fuel we use today. In fact, it is two to three times more expensive with current technology. Like always, we need to scale these solutions to get the cost down. But even if the green fuel would be two times more expensive than the bunker fuel, it should not be a showstopper […]. Even at that price, a pair of sneakers transported from Asia to the US or Europe would only cost five cents more.”
[8:14] “So for me, the argument around affordability is just a bad excuse for not making the necessary decisions and investments. And if we had a price on CO2, let's say around $150, the affordability argument would disappear. I urge governments to show leadership and implement a global price on CO2 now. Because we could focus all of our attention on the real issue, which is not the price, but the scale.”
[8:59] “Our fleet today consumes 10 million tons of bunker oil. To replace that with green fuel, we estimate that we need 220,000 gigawatt hours of green electricity. That is the equivalent of 10% of the installed base of solar and wind in 2019. And Maersk is 20% of the cargo shipping industry. So to fuel the cargo shipping industry alone would consume 50% of the entire installed base of green electricity. And that's just cargo shipping. In other words, we need a dramatic exponential scale of installations of solar, of wind, of hydrogen production, of green fuel production to solve this problem.”
[9:52] “We estimate that the total investment will be in the neighborhood of $2 trillion, which is a lot of money. But actually, it is the equivalent of four years of capital expenditure in the oil and gas industry today. I predict that for the next 10 years, the demand for green fuel will be significantly higher than the supply. Isn't that wonderful? Higher demand and supply normally means great business opportunities for everyone who chooses to participate. And it proves one of my key assumptions in today's world - it has become good business to invest in sustainable solutions.”
[10:37] “My conclusion is very simple. We have the technologies needed to create a sustainable future. What we need is leadership. Leadership to get us there faster. On the first of July 2021, Maersk ordered the first vessel designed for green fuel. It will be delivered in 2023. Only two months later, we ordered another eight large vessels and made our first investments in green fuel production. What seemed to be an impossible dream only three years ago, is becoming reality now, seven years ahead of the original plan.”
Rating: ⚡⚡⚡⚡
🎙️ Full Episode: Apple | Spotify
🕰️ 12 min | 🗓️ 01/12/2022
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Additional Links:
TED Climate Video: Jim Hagemann Snabe
