Danish oil and shipping major Maersk is seeking technologies to use lignin-based biofuel as a new renewable energy source for shipping.

The company is keen to reduce its reducing fuel consumption as well as fuel costs given its annual fuel bill of $7bn for vessel operations.

Maersk stated that it had inked a memorandum of understanding (MOU) with Progression Industry to develop a viable marine fuel from sustainable bio-mass source, lignin following which the former would purchase 50,000 tonnes of the fuel.

Maersk Line CSR and environment head Jacob Sterling remarked that the shipping companies have used fossil fuel since decades but it was now time for a change.

"In the longer term oil is simply going to run out, so we need to start looking for alternatives.

"The great thing about biofuels is that they would not only secure a future fuel supply, they will also greatly reduce our CO2 and SOx emissions," elaborated Sterling.

Lignin is known to meet strict federal parameters on price, technical performance, sustainability and emissions, company added.

Maersk is also part of the ‘Biomass for the 21st Century’ project alongside Danish National Advanced Technology Foundation exploring lignin and other potential sources for bio-fuel.