FlagshipONE Project scrapped as Ørsted retreats from E-Methanol

The Danish energy giant made the announcement as part of its first financial results since a strategic review of its business in February. The company cited slower-than-expected growth in the European market for low-carbon e-fuels as the primary reason for the decision.

FlagshipONE was intended to produce 55,000 tonnes of e-methanol annually, utilising captured biogenic CO2 and renewable hydrogen. British carbon capture specialist, Carbon Clean, had been contracted for the project. The plant was expected to be a cornerstone in the decarbonization of the shipping industry.

However, inflationary pressures, supply chain disruptions, and the overall economic climate have combined to create a challenging environment for green fuel projects. Ørsted’s decision to scrap FlagshipONE follows a broader strategic shift away from high-risk, capital-intensive ventures.

The company has instead opted to focus on renewable hydrogen, a technology it believes is closer to its core competencies and offers greater potential for value creation.

This latest setback for the e-methanol sector comes just months after Shell paused construction of a major biofuels plant, highlighting the challenges faced by the industry as it seeks to scale up production of sustainable alternatives to fossil fuels.