Ørsted has abandoned its ambitious FlagshipONE e-methanol project in Sweden, dealing a significant blow to the development of green fuels for the shipping industry.

The Danish energy giant made the announcement as part of its first financial results since a strategic review of its business in February. The company cited slower-than-expected growth in the European market for low-carbon e-fuels as the primary reason for the decision.

FlagshipONE was intended to produce 55,000 tonnes of e-methanol annually, utilising captured biogenic CO2 and renewable hydrogen. British carbon capture specialist, Carbon Clean, had been contracted for the project. The plant was expected to be a cornerstone in the decarbonization of the shipping industry.