Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

French shipping giant accelerates energy transition with €1.5bn investment

© Shutterstock / FrankHHCMA CGM cargo ship.

French logistics and shipping company CMA-CGM aims to accelerate its energy transition by investing €1.5 billion in new fuels and low-emission transport, over the next five years. It has also lowered its cargo rates to France in response to a government call to help reduce inflationary pressures after its second quarter profits doubled.

CMA-CGM will invest in a 100,000 tonne biomethane production plant by 2025, with further investments to double output by 2027.

The shipping industry accounts for 3% of global GHG emissions and faces pressure to decarbonise as supply chain emissions come under scrutiny.

The company is investing in gas and methanol-powered ships and will partner with energy group Engie on renewables to reach its 2050 net-zero goal.

Decarbonising shipping, inland and logistics

CMA-CGM detailed four areas of focus for the fund, aimed at decarbonising its shipping, inland and logistics operations globally. Called the Special Fund for Energies, the fund will also aim to drive innovation by working with start-ups, SMEs and academia to develop new fuels and low-emission mobility solutions.

CMA has partnered with energy group Engie (PAR:ENGIE) to build a biomethane  production facility at the port of Le Havre with an annual capacity of 11,000 tonnes by 2026, which will use wood waste. This partnership also aims to produce 200,000 tonnes of renewable gas annually — CMA CGM favours biomethane and synthetic gas as lower-carbon options to standard gas, as they are compatible with its current gas-powered ships.

Rodolphe Saadé, Chairman and CEO of the CMA CGM Group, said: “The CMA CGM Group has been acting to protect the environment for many years. It is at the heart of my convictions and of our strategy. However, in the face of the climate emergency it is our duty to do more and accelerate our actions.

He continued: ” This fund will enable us to make substantial investments in innovative projects to decarbonize our business. We have allocated the resources needed to accelerate our energy transition and that of the entire shipping and logistics industry.”

CMA-CGM’s four lines of focus for sustainability

CMA will deploy the €1.5 billion investment primarily in the development and production of alternative fuels for transport, which it calls renewable fuels. It already has several projects underway to drive the industrial-scale production of biofuels, biomethane, e-methane, and carbon-free methanol, among others. 

A second focus of the fund will be accelerating the decarbonisation of port terminals, warehouses and truck fleets. The group operates over 700 warehouses in 50 ports globally, and targets their energy self-sufficiency via the development of wind, solar, biomass and hydrogen fuels.

Investing in innovation via supporting the development of prototypes and trials forms the third area of focus of the fund. As an operator of ports and heavy transport, it is no surprise that developing hydrogen is one such area.

Lastly, the fund will also focus on driving internal sustainability improvements at the company, aimed at improving the carbon footprint of the group’s 150,000 employees.

Transport’s decarbonisation burden requires fast answers

As one of the heavy emitters and regarded as a hard-to-abate industry, transport companies have a heavy decarbonisation burden to bear. Further, with rising economic activity following the pandemic, as well as challenges to supply chains globally, changing the way the industry operates will not be easy.

The IEA’s Tracking Transport report calls for a 20% reduction in sector emissions by 2030, in order to meet the 2050 net zero scenario. Based on IEA’s analysis, shipping, along with heavy trucks and aviation, will see a slower rate of decline in emissions by 2030, based on the nascent stage of development of their efforts to decarbonise.

The International Maritime Organisation (IMO) has ambitions of targeting a 40% reduction in CO2 emissions per transport unit by 2030, and a 70% reduction by 2050. Goal based measures from the IMO targeting the energy efficiency of ships carbon intensity based on amount of cargo carried over distance travelled are due to be implemented from January 2023.

In response, CMA is reviewing its strategy, and has set up a program called Roadmap 2023/2030, to comply with these regulations.

Privately controlled by the Saadé family, CMA-CGM is the largest shipping company in France. As such, it will have to publicly disclose ESG metrics beginning in 2023, to determine the proportion of its activities that fall under the EU’s green taxonomy, followed by publishing key performance indicators starting in 2024.

CMA shows largess towards SMEs with its windfall profits

Its size and importance to the French economy required CMA to respond to the government’s call for help on softening inflationary pressures, which it did by reducing its rates to cargoes bound for France. 

Its second quarter 2022 profits doubled to $7.6 billion; it planned to ringfence 90% of the $18 billion in profits it made in 2021 for growth. Since 2020, CMA has seen its profits swell, and it also has been accused of unfairly driving up prices by US lawmakers.

In response, the company decided to allocate dedicated capacity to small and medium sized companies (SMEs) at a negotiated rate in markets where it perceived SMEs suffered the most from supply chain tensions – Europe and North America. These rates, it said, were only available for much larger shipment volumes.

Every little helps.

More from SG Voice

Latest Posts