Vale and Shandong Shipping Corporation have signed a Contract of Affreightment for new ethanol/methanol tri-fuel Guaibamax vessels, which are scheduled for delivery starting in 2029.

It's the first time in the maritime industry that ethanol will be used as the primary fuel on an ocean-going vessel.

With the potential to reduce greenhouse gas emissions by around 90 percent compared to the use of bunker, commonly utilized in shipping, the initiative reinforces Vale's commitment to reducing its carbon emissions across the value chain and promoting decarbonization in the maritime sector, the company said.

The 25-year contract between Vale and Shandong involves the construction of two second-generation Guaibamax vessels, with an option for additional ships.

The vessels, which are 340 meters long and have a capacity of 325,000 tons, will be capable of using ethanol, methanol or bunker as fuel, and their design also allows for conversion to use liquefied natural gas or ammonia as fuel.

"Vale's pioneering efforts towards decarbonization in maritime transport are guided by a strategy that combines flexibility and efficiency," Rodrigo Bermelho, Vale's director of Shipping, said.

"The use of ethanol as fuel in the ships that transport our ore, combined with the adoption of rotor sails to harness wind energy, places Vale in a unique position for the energy transition in global shipping over the coming decades, whilst driving similar initiatives in the sector," Bermelho said.