E-methane—A More Viable Pathway for Decarbonizing Hard-to-Abate Industries, Compared with Green Methanol and Green Ammonia

Misconception 1: Methanol is more economically viable than methane Do not assume that e-methane is inherently less economical than e-methanol simply because it competes with fossil natural gas—when evaluating energy options, we must compare like with like (‘apples to apples’), meaning both should be benchmarked against the same fossil fuel. If e-methane is compared against fossil natural gas, then e-methanol must likewise be compared against fossil natural gas. If e-methanol is deemed worthwhile, then e-methane is equally worthwhile. Consider the recent underperformance of methanol—and revisit Maersk’s actions from last year to the present—for greater clarity: January 2024: Maersk and Hapag-Lloyd signed a new long-term operational cooperation agreement named ‘Gemini Cooperation’, covering a fleet of approximately 290 vessels with a total capacity of 3.4 million TEUs. Hapag-Lloyd is also a proponent of LNG-powered vessels. 2024: Hapag-Lloyd is researching and developing an e-methane project. June 2024: The Maersk Mc-Kinney Moller Center for Zero-Carbon Shipping concluded, after a year-long study, that ‘producing liquefied biomethane (LBM) via biogas upgrading and liquefaction is the cheapest option considered.’ June 2024: According to Manhang Observation Network, Maersk is reportedly negotiating with container ship leasing companies to charter a series of newbuild LNG dual-fuel vessels. The rationale behind this move—and its potential implications—warrants in-depth industry scrutiny. In fact, as early as 2023, we issued a warning: In September 2023, Maersk partnered with CMA CGM to accelerate shipping decarbonization; CMA CGM ordered a large number of LNG-powered vessels and proposed LNG as a transitional fuel—a suggestion Maersk had previously rejected. 2024: CMA CGM and energy company ENGIE are exploring a major partnership based on an e-methane ecosystem. All these developments share a common root cause: falling fossil LNG prices—meaning fossil LNG is not only a competitor to e-methane, but also to e-methanol; both should therefore be benchmarked against fossil LNG. Then consider the price of green methanol contracted by Maersk at RMB 4,000 per tonne. In fact, among green fuels—including biofuels—RMB 4,000/tonne is not particularly expensive. Yet why do shipowners prefer biodiesel? That question lies beyond the scope of this article; however, it does highlight the significant market uncertainty facing externally sourced green methanol. RMB 4,000/tonne methanol = RMB 0.20 per MJ = RMB 0.72 per kWh RMB 7/m³ biomethane = RMB 0.194 per MJ = RMB 0.70 per kWh RMB 2,800/tonne methanol = RMB 0.139 per MJ = RMB 0.50 per kWh RMB 5/m³ biomethane = RMB 0.139 per MJ = RMB 0.50 per kWh Currently, fossil LNG—on an energy-equivalent basis—is even cheaper than low-sulfur fuel oil, and LNG-powered vessels emit significantly less CO₂. In the medium term, they will not incur carbon taxes. Otto-cycle dual-fuel slow-speed engines meet the FuelEU Maritime emission reduction targets for 2030–2034; diesel-cycle dual-fuel slow-speed engines meet the targets for 2035–2039.

Part I Strategy – 6. Energy: A Key Enabler of French Resilience

Crisis has been leveraged to drive industrial renewal. In the wake of crisis, policy priorities have shifted toward addressing systemic challenges and risks confronting the country—and incorporating long-neglected aspects across the entire value chain. • Critical raw materials: The government has supported the creation of Ofremi—the French Observatory for Critical Minerals Value Chains—to monitor and assess supply-chain vulnerabilities in defense, energy, and technology sectors. Ofremi brings together expertise from leading public and private research institutions, aiming to collaborate closely with government and relevant industries. It will also be backed by a public-private investment fund authorized to hold equity stakes across multiple segments of critical value chains. France is further advancing domestic mineral development—especially lithium—while preparing society for acceptance of such industries, as well as for recycling and refining activities. • France has revised its hydrogen strategy: President Macron supports the Spain–France offshore hydrogen interconnection project between Barcelona and Marseille. France has also resisted Brussels’ attempt to exclude nuclear-based hydrogen from EU legislation. The rationale is clear: France lacks sufficient renewable energy to meet its electrification needs; thus, the current EU legislative proposals—led by Germany—would prevent France from producing enough green hydrogen. • The French government did not oppose ENGIE’s effort to sign a second small-scale long-term LNG supply contract with a U.S. LNG supplier. • A law accelerating renewable energy deployment was adopted in March 2023, following intense debate. • RTE—the French electricity transmission system operator—is developing an unprecedented investment plan that could triple annual grid investments and enhance system resilience, digitalization, and energy storage capabilities. • France is also advancing legislation to accelerate construction of nuclear power plants and related infrastructure—primarily targeting shortened permitting timelines and enabling early construction on selected non-core nuclear infrastructure sites, even before final permits are issued. Concurrently, financing mechanisms are being mobilized to support this massive industrial expansion. • The government is assisting France’s top 50 most carbon-intensive industrial enterprises with decarbonization, offering tailored, case-by-case solutions. • Support for biomethane producers is expected to expand: production costs in 2022 already fell below imported natural gas costs, yet optimal production sites have largely been taken; hence, grid connection costs may rise while further cost reductions face limited upside. Overall, biomethane production could increase substantially by 2030—reaching at least 10% of current total demand. • The government is keen to continue attracting clean-tech investment into the country—particularly in battery cells, raw material recycling, solar and wind power, and hydrogen—and supporting European Projects of Common Interest (PCIs). • Regarding clean road mobility, legislation is expected to promote raw-material and environmental sustainability in EV deployment—including incentives for compact vehicles and batteries. • More broadly, the French government is widely leveraging the ‘France Relance 2030’ recovery plan, which allocates €54 billion over five years to boost funding across sectors and projects—and also supports participation in European Projects of Common Interest. • These are important steps—but insufficient. Before a series of pivotal legislative milestones in 2024—especially the update of France’s Multi-Year Energy Programme (Programmation pluriannuelle de l’énergie) and this year’s EU National Climate and Energy Plan—France will need to undertake major strategic planning.

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Engie to build biomethane plant in France to fuel CMA CGM's fleet

Engie to build biomethane plant in France to fuel CMA CGM's fleet

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