Shipping giant Maersk plans to produce up to two million tonnes of e-methanol a year in Spain by 2030 to supply its fleet of cargo ships and reduce its carbon footprint, the Spanish government said on Thursday.

The project will require an investment of about 10 billion euros ($9.75 billion), according to Spanish government calculations, and Spain may enter as a strategic investor.

An agreement on the project, which will be partly financed by EU recovery funds, was signed on Thursday in Madrid by Maersk CEO Søren Skou and Prime Minister Pedro Sanchez.

It forms part of an objective by Maersk, the world’s second-largest container shipping firm, to achieve net zero emissions in its business by 2040. With global shipping accounting for nearly 3% of the world’s CO2 emissions, the sector is under growing pressure to reduce its carbon footprint.

As the company looks to switch from diesel, finding a reliable supply of greener fuels remains one of its key challenges and has pushed the company to opt for producing its own fuel in strategic locations.

Sanchez said the project was “perfectly aligned” with Spain’s reindustrialization and energy transition strategies, adding it would help meet the EU’s commitment to decarbonization.

The project will begin in the second half of 2024 and is currently securing financing from banks and investors.

“If we enter the shareholding, it would be to give a signal to other companies and investors,” said a senior government source.

The added demand will mean Spain will need to speed up the procurement of renewable plants, but the Spanish government pointed out that Maersk can also opt to buy farms that are already in operation to speed up the process.

Last year, Maersk announced the launch of the world’s first carbon-neutral liner vessel, which will begin operating in 2023. It has said all future ships will be built with dual fuel technology installed, allowing them to run on either e-methanol or low-sulphur fuel oil.

Shipping giant AP Moller Maersk has completed the acquisition of e-commerce supply chain firm LF Logistics in a deal with an enterprise value of $3.6bn.

Hong Kong-headquartered LF Logistics employs 10,000 people, operates an extensive Pan-Asian network across 223 warehouses and specialises in B2B and B2C distribution solutions within retail, wholesale, and e-commerce.

Ditlev Blicher, regional managing director of Asia Pacific at AP Moller Maersk, said: “Maersk in Asia has historically been primarily focused on ocean transportation out of Asia and related logistics services.

“Transporting and managing goods manufactured in Asia for consumer markets in the West and beyond. With the addition of LF Logistics, Maersk gains unique and best-in-class capabilities to servicing the important and fast-growing consumer markets in Asia.

“Furthermore, LF Logistics expertise in omnichannel fulfilment positions us well with the global e-commerce market.”

As part of the transaction to acquire LF Logistics, Maersk has entered a strategic partnership with Li & Fung to develop a comprehensive range of end-to-end global supply chain services with Li & Fung focusing on the upstream supply chain and Maersk focusing on the downstream supply chain.

Cash-rich Maersk has made a series of acquisitions in the logistics sector over the last year as it looks to extend its ability to offer services across the supply chain.

In June, the company completed the acquisition of Senator International for $644m to boost its presence in forwarding and airfreight.

This followed the purchase of Pilot Freight Services in May.

The company has also launched its own airline.

A.P. Moller-Maersk said on Monday it has agreed to sell its 30.75% stake in Russian port operator Global Ports Investments to Russia’s largest container operator Delo Group, which also owns a 30.75% stake in the firm.

After the divestment, which needs regulatory approval, Maersk’s port unit APM Terminals would “no longer be involved in any entities operating in Russia or own any assets in the country,” Maersk said in a statement.

Maersk put its stake in Global Ports up for sale in March as it decided to quit Russia because of its invasion of Ukraine.

A.P. Moller – Maersk reported strong results for 2020 both in terms of financial performance and in transforming the company.

Despite low volumes during most of 2020, profitability grew throughout the first nine months and ended the year with record Q4 results in the Logistics and Terminals division, while the Ocean division delivered an exceptional quarter driven by the increased volumes and current, temporary supply chain disruptions.

Søren Skou, CEO of A.P. Moller – Maersk, commented: “2020 will forever be remembered for the COVID-19 pandemic that negatively impacted our lives, jobs, businesses and the global economy. I am proud that we have accelerated our transformation and delivered earnings growth during every quarter of 2020, despite very different market conditions, beginning with negative COVID-19 impact in the first half to a rebound in Q4,”

The company grew underlying earnings before interest, tax, depreciation and amortisation (EBITDA) 44 pct. to USD 8.2bn and revenue grew to USD 39.7bn in 2020 compared to USD 38.9bn last year. While the demand surge in the second half of year created supply chain bottlenecks, including vessel and container shortages, and led to higher rates that contributed approximately USD 1.5bn to results, Ocean further improved its intrinsic performance by focusing on costs, agile capacity management and launching new digital offerings.

Logistics & Services grew to USD 7bn, compared to USD 6.3bn last year, and EBITDA improved 110 pct. to USD 454m, supported by the acquisition of Performance Team as well as improved performance in intermodal, air freight forwarding and warehousing and distribution.

“Our customers want us to help them build more resilient supply chains and buy more end-to-end services. Consequently, our logistics business more than doubled earnings in 2020. We are today a profitable, growing logistics company with a broad offering of ocean and air transportation, port services and logistical capabilities, including warehousing, custom services and lead logistics,” added Søren Skou.

Gateway terminals saw a decrease in revenue of 3.9 pct. to USD 3.2bn in 2020 because of lower volumes due to impact from the pandemic. EBITDA increased by 8.3 pct. to USD 989m, reflecting an improved EBITDA margin to 31 pct. driven by higher revenue per move and cost reductions in several terminals.

Søren Skou concluded: “Financially, we left 2020 with a very strong balance sheet and little debt, which will allow us to continue to invest in our transformation and grow profitably. We are well equipped to deal with the ongoing market volatility and also to benefit from a world that hopefully starts to re-open.”

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