PORTLAND could be the home of a facility worth hundreds of millions of dollars, producing a low carbon shipping fuel alternative for the Port of Melbourne.
Melbourne-based company HAMR Energy this week made its plans for the Portland plant public, signing a Memorandum of Understanding with the Port of Melbourne and some of the world’s biggest shipping companies to explore the commercial feasibility of establishing a green methanol bunkering (ship refuelling) hub.
Green methanol emits around 90% less carbon into the atmosphere than traditional shipping fuel, and many international shipping companies have shown interest.
To make green methanol, put simply, two ingredients are required – hydrogen extracted from water using renewable energy in a process called electrolysis, and carbon dioxide, which in this case would come from by-products of the forestry industry, both very energy intensive processes.
The shipping industry is currently responsible for around 2% of the world's annual carbon emissions, twice that of Australia as a whole.
HAMR Energy Director and Company Secretary David Stribley said his company has been working for around 18 months on the project, which is estimated to cost $700-$950 million and would create 80 jobs and start shipping out 200,000 tonnes per year of the fuel from 2027.
Portland is the best location in Australia for the plant, he said.
“Portland's really unique in some of the aspects, particularly around its forestry, one of the biggest sustainable forestry industries in Australia, probably in the world,” Mr Stribley said.
That combined with the deepwater port, 500kV power connection, access to renewable energy and proximity to Melbourne fill in the pieces of what is needed.
“The other element we’ve found is through our engagement with the community, particularly business leaders and the council.
“The overwhelming support for what we've been trying to do has been really, really good, and the fact that the community has an existing skilled workforce is really a differentiator as we try and build something like this.”
There is not yet a location set aside though Mr Stribley said they are looking at a number of spots in the industrial areas of Portland for the plant, which would look something like a scaled down version of a gas refinery.
Compared to green hydrogen, a much-touted alternative fuel source of recent years, Mr Stribley said green methanol is safer, less toxic and easier and more efficient to store and transport, as it is a liquid.
A mechanical engineer who had previously worked for fossil fuel company Exxonmobil for over a decade, Mr Stribley founded the company with fellow engineer Alex Smith two years ago to produce low emission liquid fuels in Australia.
But it was a chance meeting that led to landing on Portland as the place to set up.
“My wife's family is originally from the Hamilton area, her sister is still there.
“As we started to work through this journey on how to create green methanol, being down there and actually just talking to one of their mates down at the beach (in Port Fairy) about what we were trying to do.
“He said I need to come out and see the forestry industry down here, and we went and visited that with him, and we actually started to see those resources at the scale that is needed to make these things work.”
The plan is to use around 300,000 tonnes per year of forestry industry by-product, such as damaged goods, or product from plantations that have had a fire go through, and to mostly ship out the fuel through the Port of Portland, bound for Melbourne.
Mr Stribley acknowledged that projects of similar scale and ambition have been announced in the area previously and not come to fruition, but said industry demand for green methanol gives him confidence.
“We're really confident it’s a sure thing, and why I'd say that is that the shipping industry alone has now invested $12 billion in new vessels, there'll be over 100 methanol powered vessels in operation by 2027.
“That's likely to have a demand of 5-6 million tonnes of green methanol, and today globally we’re producing 0.2, so unlike potentially some of those other announcements, we've looked at it a different way where there is demand for the product.
“The biggest challenge (for) the ship lines is getting supply, in fact most of them ask us how can we produce more and sooner.”
As for where the money to build the plant will come from, Mr Stribley said HAMR are currently looking for partners to invest and expects to have an announcement around August, but is not able to give the amount raised so far, as commercial negotiations are ongoing.
The MoU will result in a report, expected withing the next 12 months, that details how and if the Port of Melbourne should go about supplying green methanol to ships. Port of Melbourne Commercial Executive General Manager Shaun Mooney said that he expects it will be recommended.
“Certainly that demand is very apparent from majority of our shipping line customers, so at present of the top ten containerised shipping lines that visit Melbourne, in excess of 65% of those shipping lines have ordered new vessels that will be powered by green methanol,” Mr Mooney said.
Also included in the MoU is another green methanol project based in Tasmania, and Mr Mooney said these two were sought out to be included due to their proximity to Melbourne as well as being the clear leaders in producing the fuel domestically.
He said that the industry transitioning to renewables in the coming years is inevitable, due to emission restrictions being introduced by international shipping regulators, as well as taxes on transport emissions which are being spearheaded by the European Union.
“(Green methanol) seems to be the preferred choice at the moment, but what is apparent is that the future won't be one size fits all as fuel is today for the maritime sector.
“There will be different options or there are different options, we may not have even seen some of those future options yet.
“For us, it's about listening to the needs of our customers…which is consistent with our aspirations in the area of sustainability as well.”
