Vale and Shandong Marine Shipping have signed a time charter party for the world’s first ocean-going triple-fuel ethanol/methanol vessels.

　　Recently, Vale and Shandong Shipping Corporation ("Shandong Shipping") signed a charter contract for a new batch of ethanol/methanol tri-fuel Guaibamax vessels. The new ships will be built by China State Shipbuilding Corporation's Qingdao Beihai Shipbuilding Co., Ltd., with the main engine development undertaken by CSSC Power (Group) Co., Ltd., and are scheduled for delivery starting in 2029.

　　This marks the first time in the shipping industry that ethanol is being used as the primary fuel on ocean-going vessels. Compared to the marine fuel commonly used in the shipping industry, the use of ethanol is expected to reduce greenhouse gas emissions by approximately 90%. This move reinforces Vale's commitment to reducing carbon emissions across its entire value chain and promoting decarbonization in the shipping industry, aligning with ongoing discussions by the International Maritime Organization (IMO).

　　The 25-year charter contract signed between Vale and Shandong Shipping involves the construction of two new second-generation Guaibamax vessels, with an option to build more ships. The second-generation Guaibamax vessels are 340 meters long, have a deadweight capacity of 325,000 tons, and are part of Vale's multi-fuel strategy. These vessels can use ethanol, methanol, or marine fuel as fuel, and their design allows for future retrofitting to use liquefied natural gas (LNG) or ammonia as fuel.

　　"Vale's pioneering efforts in shipping decarbonization follow a strategy that combines flexibility and efficiency. Using ethanol as fuel on the vessels transporting our ore, along with adopting rotor sails to harness wind energy, will position Vale uniquely in the global shipping industry's energy transition over the coming decades, while also encouraging similar initiatives within the industry," said Rodrigo Bermelho, Vale's Shipping Director.

　　From a full fuel lifecycle perspective (from well to final product), ethanol (using second-generation ethanol as an example) can reduce carbon emissions by approximately 90% compared to marine fuel. In addition to iron ore shipping, Vale is also testing ethanol in other logistics operations, including trucks at several mining sites and locomotives on the Vitória-Minas Railway (EFVM).

　　In 2025, Vale and Shandong Shipping signed multiple 25-year charter contracts involving a total of 10 newly built dual-fuel (methanol and marine fuel) Guaibamax vessels, scheduled for delivery starting in 2027. The newly built ethanol-powered ships and the dual-fuel ships currently under construction are all second-generation Guaibamax vessels. Each ship will also be equipped with five rotor sails to harness wind energy and reduce fuel consumption. They will feature more efficient main engines, hydrodynamic energy-saving devices, shaft generators, variable frequency inverters, advanced silicone coatings, and other energy efficiency measures, which are expected to reduce greenhouse gas emissions by approximately 15% compared to the first-generation Guaibamax vessels currently in use.

　　The technologies and alternative fuels being tested are part of the "EcoShipping" program. "EcoShipping" is a research and development initiative launched by Vale to support the decarbonization of the shipping industry and improve the efficiency of the company's chartered fleet, which currently includes first- and second-generation Valemax vessels and first-generation Guaibamax vessels. These vessels rank among the most energy-efficient ships in the world, with greenhouse gas emissions up to 41% lower than standard Capesize vessels.

　　Since 2020, Vale has invested approximately $1.4 billion in reducing Scope 1, Scope 2, and Scope 3 emissions. The company is committed to reducing Scope 3 net emissions associated with its value chain by 15% by 2035.