Spanish renewables energy giant Iberdrola and the Australian government are to invest €1.1bn ($1.2bn) in developing a green hydrogen and methanol plant in Tasmania to produce marine fuel.
The new facility, one of the largest in the world, will eventually produce up to 300,000 tonnes of methanol in northern Tasmania.
ABEL Energy, which aims to develop a series of Power-to-X synthetic fuel projects throughout Australia using its abundant solar and wind energy resources, is also a partner in the Bell Bay Powerfuels project.
Iberdrola said the plant will initially produce 200,000 tonnes of green methanol in its first phase, rising to 30,000 tonnes in the second.
Currently, around 90 plants around the world produce about 110m tonnes of methanol for use in a range of industrial and consumer products.
But the global market for cargo shipping fuel is about 229m tonnes worth $130bn a year, and as methanol has less than half the energy content of heavy fuel oil (HFO) the volumes required for shipping will be much greater.
Methanol’s price is also much higher at about $2,556 per tonne, compared with $602 for HFO in Singapore currently.
But Danish shipping giant AP Moller-Maersk has made a number of orders for large methanol-powered ships and others are starting to follow suit. Maersk has also gone into supply deals with producers.
About 6,013 cargo ships made around 34,000 port calls in Australia in 2018- 2019, with more than 98% coming from overseas ports.
Industry association Shipping Australia chief executive, Captain Melwyn Noronha said: “The green shipping revolution is well and truly on its way to Australia.”
