Shipping line CMA CGM, Engie plan biomethane production in France

PARIS (Reuters) -Shipping line CMA CGM and energy group Engie plan to launch biomethane production in France in 2026 as they look to develop the renewable fuel for vessels.

The French firms are looking to build a facility at the port of Le Havre to produce 11,000 tonnes of biomethane annually using wood waste, they said in a statement on Thursday.

An investment decision on the project, expected to cost 150 million euros ($157 million) and in which CMA CGM and Engie are the main shareholders, is due at the end of the year.

CMA CGM and Engie, which formed a partnership last year to develop lower-carbon fuels, aim to produce up to 200,000 tonnes per year of renewable gas by 2028 to supply CMA CGM and other shipping operators, the companies said.

CMA CGM has adopted liquefied natural gas for some recent vessels as less-polluting than fuel oil traditionally used to power ships.

However, standard gas offers limited gains on carbon emissions and CMA CGM is looking at biomethane and synthetic gas as lower-carbon options that are compatible with its current gas-powered ships.

The firm announced in early June it had made a first order of vessels to be powered by methanol, a fuel also being explored by larger rival Maersk as shipping lines try to decarbonise their fleets.

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(Reporting by Gus TrompizEditing by Jan Harvey and Mark Potter)