Singapore’s Global Energy and Hong Kong’s Towngas join forces to disrupt energy supply chain

HONG KONG: In a significant step towards promoting green energy, Hong Kong’s sole gas provider, Towngas, has partnered with Global Energy Trading, a leading marine fuel and logistics provider from Singapore, to create a green methanol supply chain. This collaboration, announced in a memorandum of understanding (MOU) on Monday, aims to support the region’s energy transition efforts.

According to a recent South China Morning Post report, the partnership marks a pivotal moment in decarbonising the maritime fuel industry. Combining Towngas’ expertise in green methanol production with Global Energy’s proficiency in supply chain management and market operations, the two companies are laying the foundation for an innovative platform to accelerate the shipping industry’s journey toward sustainability.

Towngas, a key player in Hong Kong’s energy sector, has set ambitious goals to reach carbon neutrality and reduce the carbon intensity of the gas it supplies by 36% by 2035. Towngas invests in low-carbon fuels, including green naphtha, methane, methanol, and hydrogen, as part of its broader energy transition strategy.

Last year, Towngas took significant steps toward its commitment to clean fuels, signing several agreements to provide environmentally friendly alternatives for the aviation and maritime industries. These industries are working to meet net-zero carbon emissions by 2050. The company has already made strides in commercializing its technology to transform waste into green fuel, successfully delivering its first green methanol batch to overseas marine customers in October 2023.

Global Energy Trading, which made history as the first Singaporean company to own and operate dedicated methanol bunkering tankers, provided an impressive 4.7 million tonnes of marine fuel in 2024. This adds further momentum to the green methanol project, which could revolutionize the fuel landscape for the maritime sector.

Towngas’ green methanol comes from its Ordos plant in China’s Inner Mongolia autonomous region. This facility converts biomass and municipal waste into sustainable fuel. It is projected to produce 150,000 tonnes of green methanol annually by 2025 and will soon double its capacity, driven by retrofitting and efficiency improvements.

Experts suggest that Towngas’ strategy, which includes turning a previously loss-making facility into a profit-generating green methanol hub, could yield significant returns—the higher market value of green methanol than fossil-fuel-based products positions the company for a more sustainable future.

Towngas’ green methanol also offers a substantial environmental benefit—its carbon footprint is 70% to 80% lower than conventional fossil fuels. This aligns with the Hong Kong government’s Green Marine Fuel Action Plan, which aims to reduce emissions from the city’s ships by 11% by 2026 and ensure that at least 7% of ships use eco-friendly fuel by 2030.

Further expanding its green energy efforts, Towngas signed a framework agreement with Foran Energy Group, a natural gas distributor in mainland China, to raise US$1.4 billion in funding for additional green methanol plants nationwide. The combined production capacity from these plants is expected to reach 1 million tonnes annually.

While experts acknowledge that methanol is not yet a significant profit driver for Towngas, its growth potential in the green energy sector remains promising. This partnership with Global Energy Trading is poised to play a critical role in the future of sustainable maritime fuel, further advancing Towngas’ goals of leading the energy transition in Hong Kong and beyond.

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