Maersk-backed C2X has signed a deal to build a giant green methanol production facility in Spain.
It has set up a joint venture project with Cepsa, the Spanish energy giant, to generate 300,000 tonnes of methanol annually, with a maximum capacity of 380,000 tonnes.
The agreement has legal and contractual steps to overcome to become a reality.
The investment is said to be up to €1bn ($1.09bn) and if it gets the green light will lead to developments in Andalusia, southern Spain.
The Andalusian Green Hydrogen Valley is under development by Cepsa and partners to generate up to 3 GW of green hydrogen by 2030. Some of this hydrogen will be used to produce green methanol under this deal, at the Port of Huelva, on the southern coast west of Gibraltar.
The CO2 needed to produce methanol will come either from direct air capture or from agricultural and forestry waste, according to the partners.
The announcement was made during COP28 in Dubai, with Spanish Prime Minister Pedro Sanchez pointing to the ability to use this green methanol as a maritime fuel.
“Green methanol will also allow us to advance in the decarbonisation of hard-to-abate sectors, such as shipping or the chemical industry. In other words, this is a significant step towards a future free of fossil fuels,” he said.
“This investment is fully aligned with Spain’s strategy of reindustrialisation and energy transition. We want 81% of our power generation to come from renewable sources by 2030. Green hydrogen will play a crucial role and, thanks to projects like this, Spain stands as a global reference.”
The legal framework and other details still need to be completed, and sign-off is not expected until 2025.
Cepsa is owned by Mubadala, a state-owned wealth fund in the United Arab Emirates, and US private equity firm Carlyle Group. C2X is majority-owned by AP Moller Holding with AP Moller-Maersk as minority owner.
