By Brazil Stock Guide – Vale SA (VALE3 BZ) has signed a long-term charter agreement with Shandong Shipping Corporation to deploy the world’s first transoceanic vessel powered primarily by ethanol, marking a milestone in maritime decarbonization.
The vessels, part of the Guaibamax class, are scheduled for delivery starting in 2029 under 25-year contracts covering an initial two ships, with options to expand the fleet. The initiative positions Vale among the early adopters of alternative fuels in large-scale iron ore shipping.
According to the company, second-generation ethanol could reduce greenhouse gas emissions by up to 90% compared with conventional heavy fuel oil when assessed on a full lifecycle basis. The move aligns with global efforts led by the International Maritime Organization to curb emissions across the shipping industry.
The newbuild vessels will measure 340 meters in length and carry up to 325,000 tons of cargo. Designed under a multi-fuel strategy, they will also be capable of operating on methanol and conventional fuels, with future conversion options to liquefied natural gas or ammonia.
“The use of ethanol as fuel in vessels transporting our iron ore, combined with the adoption of rotor sails to harness wind energy, places Vale in a unique position for the energy transition in global maritime transport in the coming decades,” said Rodrigo Bermelho, Vale’s Director of Shipping.
The ships will be equipped with five rotor sails and additional efficiency technologies, including hydrodynamic devices, shaft generators, frequency inverters and silicone-based hull coatings. These features are expected to deliver an additional 15% reduction in emissions compared with the current generation of vessels.
The project is part of Vale’s Ecoshipping program, which focuses on research and development of low-carbon logistics solutions. Since 2020, the company has invested approximately R$7.4 billion ($1.4 billion) in emission reduction initiatives and targets a 15% cut in Scope 3 emissions by 2035.
Vale is also expanding ethanol testing beyond maritime logistics, including applications in trucks and locomotives operating on the Vitória-Minas Railway.
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