SINGAPORE - French shipping giant CMA CGM will invest US$1.5 billion (S$2.12 billion) over the next five years to accelerate its energy transition across its transport and logistics businesses, a senior company executive said.
Mr Farid Trad, vice-president of bunkering and energy transition, said in a recent interview with The Straits Times while he was in Singapore that the investment would be set up as a fund that would support the shipper’s initiatives to meet its net-zero targets by 2050.
He said the investment fund will focus on fast-tracking the use of renewable fuels for the company’s marine, air cargo and trucking businesses.
Mr Trad added that for its land transport vehicles, the company is exploring the use of hydrogen, in addition to electrification and adopting biofuels.
He said the company, which is privately owned by the family of the late French shipping magnate Jacques Saade, also owns and operates warehouses and terminals which require decarbonisation solutions.
“We need to be energy efficient, energy autonomous, we need to find ways to massively reduce our emissions with these assets,” said Mr Trad.
The fund will help to support innovation start-ups and projects like its investment in Energy Observer, a racing boat propelled by hydrogen.
Hydrogen is a limitless energy source that generates up to four times more energy than coal, and three times more than diesel, said Mr Trad.
He added that the green hydrogen used by Energy Observer is made from seawater using renewable sources of electricity generated on board by solar, wind and power. It is widely accepted that producing and burning hydrogen does not result in any greenhouse gas or fine particle emissions.
Another key area of investment with the fund would be to expand training opportunities for the company’s 150,000 employees around the world, said Mr Trad.
The company wants to create greater awareness of the core challenges in energy transition and global trade and the ways in which its employees can contribute to achieve its net-zero target by 2050.
Mr Trad also highlighted that the company would open a new centre called Tangram in Marseille, France, for training and innovation in late 2023.
The goal of the new training facility for the company’s employees worldwide is to transform the shipping and logistics sectors, he said.
“When you have 150,000 people scattered around the world, across more than 100 countries, every single one of them could be an ambassador to the mission we are trying to accomplish at CMA CGM,” he said.
“By doing this, we create a community that will work in the right direction collectively and this will help accelerate the energy transition and fulfil our climate ambitions.”
The company is investing in the building of new container ships that will run on liquefied natural gas (LNG).
“LNG is a great transitional fuel because the infrastructure is there and it’s a mature technology, and for LNG bunkering, the infrastructure is expanding globally as well. It’s readily offered in Europe, Singapore, China and the United States,” he said.
He said the company is currently building 45 vessels which will run on LNG and e-methane, which is produced from decarbonised hydrogen and captured carbon dioxide.
These ships are expected to be operational by 2026. The shipper has 32 vessels currently operating on LNG and e-methane.
Mr Trad said the vessels being built are large ones at around 15,000 to 23,000 TEUs (20-foot equivalent units). CMA CGM operates a fleet of 583 ships.
While LNG prices have surged due to rising demand in Europe amid the Russia-Ukraine war, Mr Trad said the company remains confident in its decision to bank on LNG as a transitional fuel for its fleet.
“There will be ups and downs in the commodity markets. We are used to that and this volatility will not change our long-term view that LNG is absolutely the right solution for the transition.”