Maersk: Creating an Ecosystem for Green Shipping

In the fall of 2023, the Danish shipping company AP Moller Maersk (henceforth 'Maersk') launched the world's first nonfossil-fuelled ship, Laura Maersk. It was the first of 25 container ships ordered by Maersk with dual-fuel engines capable of running exclusively on green methanol. These decarbonized vessels gave Maersk a first-mover advantage on the demand side owing to their appeal to consignees (ie, the recipients and buyers of transported goods) who wanted to reduce their Scope 3 emissions and, thereby, signal a green image to their customers and other stakeholders. On the supply side, however, Maersk risked experiencing a first-mover disadvantage if green methanol turned out to be less economical than other nonfossil fuels, such as green ammonia, green methane, or hydrogen. Hence, Maersk faced a trade-off between the benefits of committing itself to the creation of an ecosystem for decarbonized shipping based on green methanol and the loss of flexibility it would experience in terms of being unable to switch to the most economically viable nonfossil fuel at any point in time. From a global-warming perspective, Maersk's commitment to green methanol appeared praiseworthy. However, from a narrow, corporate-economics point of view, Maersk might have been better off if it had, for instance, followed a wait-and-see strategy instead of betting on green methanol.