Thursday, November 30, 2023
HomeEnvironmentMitsui O.S.K. pours cash into green fuel


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Mitsui O.S.K. pours cash into green fuel

Japanese maritime shipping company Mitsui O.S.K. Lines will double investment in decarbonization efforts to the order of 400 billion yen ($3.5 billion) over three years compared with previous plans, President Takeshi Hashimoto told Nikkei in an interview.

It previously aimed to invest a total of 200 billion yen in greener technologies through March 2024. But this will now rise by 100 billion to 200 billion yen, thanks to a “significant increase in free cash flow” from the global shipping boom, Hashimoto said.

Strong demand for shipping services “has given us more freedom on management decisions,” he said.

The stepped-up investment will speed Mitsui O.S.K.’s shift toward liquefied-natural-gas-powered vessels, which emit 25% less carbon dioxide than ships running on conventional fuel oil. The company plans to launch 90 LNG-powered vessels by 2030 and announced in August an order for four car carriers.

Mitsui O.S.K. is also investing in “green ammonia” as a key carbon-free fuel source for the future. Ammonia is expected to start powering real-world vessels in the late 2020s, but import limitations may pose a challenge for Japanese shipping companies.

“We don’t have enough volume to use ammonia to fuel ships,” Hashimoto said. “We can’t afford to wait for somebody else to produce the material.”

The company announced in May that it would resume transporting ammonia for the first time in half a decade. It is expected to invest in new production and storage facilities, with an eye on markets like Australia, Russia and the Middle East.

Mitsui O.S.K. will also consider producing and exporting ammonia derived from natural gas. “We will look into ammonia-related mergers and acquisitions as well,” Hashimoto said.

The company will announce a new investment plan as early as the spring.

Mitsui O.S.K.’s moves come in response to growing pressure on the logistics sector to reduce carbon emissions. Volkswagen essentially requires shipping companies to be using LNG-powered vessels to even bid on a contract. Honda Motor is urging key suppliers to reduce CO2 emissions by 4% every year from fiscal 2019 levels and to achieve net-zero emissions in 2050.

Logistics providers around the world are now racing to decarbonize. A.P. Moller-Maersk said in February that it would participate in the development of Europe’s largest green ammonia production facility, slated to go online in 2026.

The Danish shipping company also announced in August an order for eight large container carriers that it said can run on carbon-neutral methanol. The vessels are expected to start replacing older ships in 2024 and will together reduce CO2 emissions by about 1 million tons a year.

Meanwhile, Nippon Yusen plans to replace 100 of its 215 large and midsize bulk carriers, as well as 30 to 40 of its 117 car carriers, with LNG-powered vessels by 2030.

The entire update is expected to require around 1.2 trillion yen. “We’ll be able to put in a few hundred billion yen into this thanks to improvements in our performance,” President Hitoshi Nagasawa has said, suggesting that the company may push up its schedule.

In addition to decarbonization, Hashimoto discussed Mitsui O.S.K.’s plans to bolster shareholder returns. Maritime shipping companies can experience dramatic fluctuations in their performance, depending on market conditions. “I want to transform this company into one that can pay out stable dividends totaling about 30 billion yen, even if our financial results fluctuate somewhat,” he said.

Source: Nikkei

Related Posts


Finance & Economy
Shipping News

Euronav: Dividend Distribution For Q3 2023 & Business Update

Euronav NV provides a business and dividend update following the recent board and management changes. The Supervisory board has agreed to distribute USD 0.57 per...

A new chapter for Euronav

Euronav shareholders have approved strategic changes at the company ushering in a new era.

TEN Reports Earnings Results for Q3 & 9M2023

Tsakos Energy Navigation Limited reported earnings results for the third quarter and nine months ended September 30, 2023. For the third quarter, the company reported...

StealthGas posts near-record quarterly profit

STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial...

Golar LNG Reports Third Quarter Net Income of $114 Million

Golar LNG announced its interim results for the period ended September 30, 2023. Highlights include: Golar LNG Limited (“Golar” or “the Company”) reports Q3 2023 Net...

Baltic index extends rally on higher capesize rates

The Baltic Exchange’s dry bulk sea freight index rose on Tuesday for the fourth...

CLIA presents cruise industry’s Action Plan for Greeceto the Greek Government

Representatives of Cruise Lines International Association (CLIA), members of the Government, and key stakeholders...

Baltic index scales 1 and 1/2-year peak

The Baltic Exchange’s dry bulk sea freight index rose on Monday for the third...

Greek merchant fleet up in numbers, down in volume

The Greek merchant shipping fleet rose in numbers but fell in volume in September. More...

Celestyal unveils 3 new countries and 6 new ports for 2024 & 2025

Celestyal the award-winning, number one choice for cruise travelers to the Greek islands and...

Port Houston Breaks Export Record

October was the biggest month ever for loaded exports at Port Houston, up 6% compared to last October. Port Houston’s loaded exports are up...

Port of Piraeus working on first shore power connection slots for 2024

The Piraeus Port Authority (PPA), which manages the largest and busiest port in Greece, announced the first five shore power connection slots for ferry...

Two major US cruise operators interested in buying Lavrio port

The tender for the concession of Lavrio port is set to begin in the next few weeks. Sources tell Kathimerini there are at least two...

Biden Administration Invests Over $650 mln in US Ports to Strengthen Supply Chains

The U.S. Department of Transportation’s Maritime Administration (MARAD) announced over $653 million to fund 41 port improvement projects across the nation under the Port...

APM Terminals & DP World spearhead roadmap for accelerating electrification of port operations in bid for net-zero

APM Terminals and DP World announced an initiative to accelerate decarbonisation of the world’s terminals through the widespread electrification of container handling equipment (CHE)....