Shipping Positioned to Benefit From Green Fuel Markets Built by Other Sectors

The Kassø e-methanol plant in southern Denmark runs at full capacity, producing every liter it can make. The 52-megawatt facility, which has been operating for roughly eighteen months, sells out completely. Demand outpaces supply. This is no longer a theoretical market—it is a working commercial reality, and it reveals something unexpected about shipping's path to decarbonization: the industry may not be the one building it.

Torben Nørgaard, who now leads partnerships and offtake strategy for power-to-X fuels at European Energy, has watched this shift from both sides of the industry. He spent five years as chief technology officer at the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping before joining the Danish renewables company. He has built methanol, ammonia, and hydrogen plants. He understands the machinery—both literal and structural—that moves fuel markets. What he sees now is shipping being overtaken by other sectors in the race to secure green fuels.

The Kassø plant counts Maersk, Novo Nordisk, and LEGO among its founding offtakers. It produces 42,000 metric tons per year. Yet the real demand driver is not shipping. It is German road transport. Germany's 0.1 percent blending mandate for renewable fuels of non-biological origin in gasoline, which took effect in January, requires roughly 150,000 metric tons of compliant methanol annually just to meet that single requirement. Non-compliance carries a penalty equivalent to about €2,400 per tonne of methanol—a price signal that creates genuine market pull. That mandate is set to climb toward five to ten percent over the next decade, spreading to other European countries and into industries like steel production.

Shipping, by contrast, has lost regulatory momentum. The industry was positioned to become the first sector with a global, legally binding net-zero framework. That agreement collapsed last October. Nørgaard does not frame this as catastrophe. He frames it as a structural reality that shipping has misunderstood about itself. The industry is not well-positioned to create markets for green fuels. It is fragmented, global, and lacks the concentrated demand or regulatory authority to stand behind a new fuel market for five to ten years—the commitment required to attract the capital and liquidity that makes a market function. Creating a functioning fuel market requires traded volumes, depth, and a market maker willing to absorb risk. That is difficult for any single sector to deliver alone. It is nearly impossible for one as dispersed as shipping.

But this is not new. Shipping has never built the energy systems it runs on. The industry did not invent coal or create demand for it; coal became available because other industries developed it. Diesel followed the same path. LNG's supply chain was built to serve power generators in Japan and Korea; shipping simply tapped in when those routes opened. Even heavy fuel oil, the fuel that defined modern shipping, was largely a leftover product that other industries did not want. The wind did not start blowing because shipowners built sailing vessels. The pattern is consistent: shipping runs on energy systems that nation states and regions build to serve multiple industries at once.

Nørgaard sees this not as a limitation but as shipping's actual strength. The industry benefits from flexibility. It can adopt whatever fuel becomes available at scale. Road transport and industrial sectors are now creating that scale through regulation. Germany's blending mandate, the EU's FuelEU Maritime framework with its proposed auctioning mechanism for compliant fuels, and similar policies across Europe are building the market infrastructure that shipping can then enter. The Kassø plant demonstrates this is working. Demand exceeds supply. The question is no longer whether green fuels are viable at commercial scale. It is how quickly supply can expand as regulation spurs adoption across multiple sectors simultaneously.

Nørgaard is relaxed about bioethanol entering the marine fuel market as electric vehicles reduce road demand, potentially freeing five to ten million metric tons for other uses. Bioethanol delivers carbon reductions ranging from near zero to seventy percent depending on production methods, placing it in a different category from e-methanol's deeper emission reductions. Different fuels will play different roles. For European Energy's next projects, the fundamentals are clear: access to biogenic carbon dioxide, low-cost renewable electricity, land, and increasingly, access to markets created by regulation. The company has nothing public to announce, but the logic is set.

Shipping's orderbook suggests the industry understands this intuitively. Owners are building optionality into their fleets, positioning themselves to use whatever fuels become available at scale. The next step is regulatory frameworks that allow shipping to compete fairly with road transport and industry for low-emission fuels. If that happens, demand from multiple sectors can help bring the scale that makes these fuels more accessible to everyone. Shipping is doing the right thing, Nørgaard believes. It is keeping its options open and waiting for the markets others are building.