Methanol bunkering could soon become a reality in Singapore as six companies form a partnership that aims to establish Asia’s first green e-methanol plant.

The plant will convert captured biogenic carbon dioxide into green e-methanol, a low-carbon fuel that is being touted as one of the pathways to decarbonise shipping.

The consortium consists of Denmark’s AP Moller-Maersk, Thailand’s PTT Exploration & Production Public Co, France’s Air Liquide and Singapore-based YTL PowerSeraya, Oiltanking Asia Pacific and Kenoil Marine Services.

The six companies have signed a memorandum of understanding (MoU) on a Green Methanol Value Chain Collaboration that will explore the feasibility of establishing a green e-methanol pilot plant with a minimum production capacity of 50,000 tonnes per annum, the first of its kind in South East Asia.

In a statement released on Wednesday, the consortium said the MoU marks a “pivotal step towards transforming captured biogenic CO2 and green hydrogen produced from renewable electricity into green e-methanol” and it will “make this low-carbon fuel commercially accessible for the maritime industry”.

The pilot plant will be set up in Singapore, pending the conclusion of feasibility studies that are expected to be completed this year. The studies will examine the technical and economic aspects of the plant.

The project plans to leverage Singapore’s hub port and research ecosystems to conduct feasibility studies and run bunkering trials on green e-methanol, which is described as potentially yielding a substantial carbon reduction impact for shipping.

“As one of the world’s premier maritime bunkering hubs, Singapore will serve as an ideal location to take this important step towards exploring alternative future fuel solutions to advance the multi-fuel transition of the global shipping industry,” the consortium said.

The project is described as having the “strong potential to support industry adoption and realisation of climate neutrality goals, making a meaningful contribution to the global efforts to reduce greenhouse gas emissions”.

Maersk has ordered a dozen 16,000-teu, dual-fuel vessels that can run on methanol and conventional fuels for delivery in 2024 and 2025. It also has a methanol-fuelled 2,200-teu boxship on order for delivery next year.

The liner giant said green methanol is the only market-ready and scalable available solution today for shipping.

Maersk announced last month that it has set up strategic partnerships with six methanol producers in China, the US and South America to secure 730,000 tonnes of green methanol per year by the end of 2025.