Sizable uptick in methanol bunkers ahead: Methanol Institute COO
Methanol is set to play a “sizable role” in the global bunker fuel mix by 2050, but its short-medium term prospects have also received a boost after A.P. Moller-Maersk announced plans to have eight large ocean-going container vessels capable of being operated on carbon neutral methanol, said Chris Chatterton of the Methanol Institute.
“This is a very strategic investment in a highly innovative, proven technology which will deliver significant, net GHG reductions and which will require a corresponding build out of methanol bunkering capacity in select ports,” Chief Operating Officer Chatterton told S&P Global Platts in an interview.
“We’ve already noticed a sizable uptick in interest around methanol bunkers – both conventional, carbon neutral and lower carbon methanol,” Chatterton said.
There are 12 methanol-fueled ships currently operating internationally with at least that many more scheduled for delivery over the next 18 months, not counting the recent Maersk order, Chatterton said.
Many shipping companies based in Asia are also mulling over methanol-fueled ships.
Recently Japan’s Mitsui O.S.K. Lines established a strategic partnership with Vancouver-based Methanex Corp. for the commercialization of methanol as a bunker fuel by agreeing to buy a 40% stake in Methanex’s subsidiary — Waterfront Shipping.
In March, Singapore-headquartered Eastern Pacific Shipping said it had inked an agreement with OCI N.V. and MAN Energy Solutions to develop methanol and ammonia as marine fuels to promote sustainable shipping.
Methanol was approved for inclusion in the International Maritime Organization’s IGF Code in November 2020. So, the recent orderbook seems to indicate a very strong first year performance for methanol-fueled vessels, Chatterton said.
By 2050, we may see additional forms of propulsion technology introduced, such as large, hydrogen fuel cell battery hybrid platforms, where methanol can also play a critical role as an efficient hydrogen carrier, he said.
Fuel cells are being discussed and set for approval currently at IMO’s upcoming 7th session of IMO’ sub-committee on carriage of cargoes and containers, or CCC 7, and within this technology platform, hydrogen reforming technology that is reformed from methanol will play a critical role, Chatterton added.
Methanol scores over other alternatives
The additional capital expenditure for a methanol, dual-fuel vessel of any type, whether retrofit or new build, is marginal, Chatterton said.
Running costs for methanol as a fuel are competitive with MGO on an energy equivalent basis, although for lower carbon or carbon neutral methanol, prices are expected to be more, as all lower carbon fuel will be, at least to start, until it reaches scale, Chatterton said.
CFR China methanol averaged around $315/mt in August while CFR Southeast Asia was assessed at an average of $387.9/mt for the same month, Platts data showed.
Methanol’s handling is very similar to that of distillate fuel, with the exception for the lower flash point. So, it is not more challenging to safely handle, only ‘different’ slightly, Chatterton said.
Methanol is cost competitive on an energy equivalent basis and has multiple sustainability pathways based on different feedstocks, which means it can be produced almost anywhere. Most of the infrastructure for storing and distributing methanol is largely in place or can be readily re-purposed.
It is bio-degradable [miscible in water] and is a significant carrier of hydrogen, which lends itself well to hydrogen fuel cell systems, Chatterton said.
When asked how hydrogen and ammonia stacked up vs. methanol as zero carbon fuel options, Chatterton noted that both hydrogen and ammonia are zero carbon fuels on a tank-to-wake basis, but are actually more carbon intensive than methanol on a well-to-wake, unless produced through a ‘green’ platform such as renewably powered electrolysis.
Additionally, on a net GHG or CO2 equivalent basis, methanol performs better than hydrogen or ammonia, and methanol is a superior carrier of hydrogen than hydrogen itself in either gas or liquid form, he said.
Accelerating methanol bunkering
In order to provide an impetus to methanol as a marine fuel, there is a need to push policy which fully supports decarbonization as vessels are already on the water with more being ordered, Chatterton said.
Ports can also provide a boost to methanol bunkering by perhaps starting to launch a couple of pilot boat projects using harbor craft, where they can be bunkered as well, Chatterton said.
“These are relatively fast projects to put into play as we have demonstrated in the Ports of Antwerp and Rotterdam recently, on a methanol fueled tug and on a methanol bunkering demonstration of a product carrier which was also Singaporean flagged,” he said.
Chatterton’s advice to the industry is to “start with small, inexpensive steps to gain knowledge and experience and then scale up safely and cost effectively.”