Ørsted nets up to $100 million in federal funding for e-methanol plant in Texas

Clean energy developer Ørsted has been selected by the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations to receive up to $100 million in federal funding to construct its power-to-x facility, called Star e-Methanol, along the Texas Gulf Coast.

Ørsted’s project is one of 33 projects selected across more than 20 states to demonstrate commercial-scale decarbonization solutions needed to move energy-intensive industries toward net zero.

It is one of a subset chosen for funding that, according to the DOE’s Funding Opportunity Announcement, represents a “world-leading, first-or early-of-a-kind, full facility build resulting in significant emissions reductions up to net-zero operations.”

Star e-Methanol is planned to produce up to 300,000 metric tons of e-methanol annually which can be used directly as a marine shipping fuel, or as an input in sustainable aviation fuel or in chemical production.

As explained, the project consists of multiple components to reach a net-neutral carbon solution. This includes building new onshore wind and solar projects in Texas to power the electrolysis of green hydrogen, capturing biogenic carbon from an industrial facility, and synthesizing the captured biogenic carbon with green hydrogen to create e-methanol. The resulting e-methanol will reduce CO2 emissions by more than 90% compared to conventional marine fuel.

“The production of e-methanol will be critical to achieving rapid decarbonization for the most hard-to-electrify sectors, and we are thrilled to have the U.S. Department of Energy’s support to develop and scale this new industry,” said Melissa Peterson, Head of Onshore and P2X Americas at Ørsted. 

“Beyond decarbonization, Ørsted’s investments in Texas and in the e-fuels industry will create new American jobs and deliver economic value and benefits to local communities.”

In Sweden, Ørsted is also building FlagshipONE, Europe’s largest e-methanol project. The large-scale methanol production facility will supply growing fleet of methanol-powered vessels.

Expected to become operational in 2025, FlagshipONE will produce around 50,000 tonnes of e-methanol each year.

In addition, the company is developing the Green Fuels for Denmark project in Copenhagen, which is expected to produce significant volumes of e-methanol to enable the decarbonization of shipping.