The nation's first batch of large-scale green methane will be produced and applied in bunkering a commercial logistics vessel in July, marking the fact that a closed-loop from R&D to application of this clean fuel has been established, according to a senior executive of the green methane producer.

A demonstration project located in Taonan in Northeast China's Jilin province is expected to produce the first barrel of green methanol in July, which will subsequently be transported to Shanghai Port to bunker the commercial logistics vessels under French shipping and logistics group CMA CGM, according to Ni Jianjun, deputy general manager of Shanghai Boiler Works Co Ltd, a unit of Shanghai Electric Group Co Ltd.

"The Taonan site has an annual production capacity of 50,000 metric tons, and we have plans to build more capacity to meet soaring market demand," said Ni.

As a type of clean and renewable energy, green methanol is produced mainly from renewable energies featuring high efficiency, clean emission, renewability, easy storage and transportation convenience.

Despite rising demand for green transition across the global shipping industry, production capability of clean energies remains limited.

Throughout 2024, orders for 515 vessels using alternative fuels including liquefied natural gas (LNG) and methanol were placed, up 38 percent year-on-year, with 166 ships to be powered by methanol, reported the Shanghai-based newspaper Jiefang Daily citing data from international certification and classification body DNV.

Among the 180 million tons of methanol produced worldwide in 2023, merely 500,000 are green methanol, including some 300,000 tons produced in China, according to a Shanghai Observer report.

According to Ni, apart from the Taonan project, a much bigger project with an annual production capacity of 200,000 tons of methanol is in the pipeline.

What's noteworthy is that all the core technologies and key equipment used in the Taonan project are researched and developed by Shanghai Electric, Ni added.

"CMA CGM's demand for green methanol is much bigger than the 50,000 tons we are going to provide. In fact, there is a supply shortage in terms of green methanol globally," Ni said.

Public information shows the demand for green methanol is projected to surpass 10 million tons by 2030, while production is only approaching 500,000 tons annually for the moment.

In addition to the innovative application of green energy in the shipping industry, Shanghai Electric has plans to develop sustainable aviation fuel and will continue to introduce more green fuel solutions for various sectors, Ni said.

On its way to building itself into an international shipping hub, the port of Shanghai is also seizing the emerging opportunities that green transition creates.

A simultaneous ship-to-ship bunkering of green methanol for dual-powered container ship HMM Green under South Korean logistics company was conducted in March at Shanghai's Yangshan Port, becoming the first bunkering of domestically produced green methanol, according to Shanghai International Port (Group) Co Ltd.

The bunkering was conducted by the Hai Gang Zhi Yuan tanker, the nation's first and largest methanol bunkering vessel in operation. In comparison with the bunkering conducted by Hai Gang Zhi Yuan for Danish shipping and logistics services provider A.P.Moller-Maersk's Astrid Maersk in April 2024, the latest bunkering involves a greater amount of green methanol, about 2,900 tons, and the green energy is produced in the Inner Mongolia autonomous region.

Considering its safety, sophisticated technology and scale production capability, green methanol is regarded as one of the prime options as the global shipping industry strives to achieve carbon neutrality.