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Beyond 2020: Why methanol will take its place in the marine fuels mix

Chris Chatterton of the Methanol Institute explains to Manifold Times why bunker buyers should be looking at methanol post 2020.

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The following article below is written by Chris Chatterton, Chief Operating Officer, Methanol Institute:

It is a truism in shipping that investors and operators build assets for the long term but must take a short term view of the markets in which they will operate. Seen in this context, the 2020 fuel switch, while important and potentially painful, is the start of the conversation, not its end.

The shipping industry is rightly focussed on the short term impact of the 2020 global sulphur cap. The likely effects of this piece of regulation extend beyond its intended environmental goals to impact refining capacity, supply and demand – and thus the tanker markets – as well as having potential implications for vessel operations.

Despite being shrouded in the fog of often contradictory news reporting, opinion and analysis, we can comfortably assume that bunker prices will rise into 2020, whether for gasoil or low sulphur fuel oil. We can also see shortages and pinch points where supply and demand are out of step.

The operational/compliance/enforcement-related impacts are less clear but while IMO has pushed the agenda by banning the carriage of HSFO as fuel on vessels without a scrubber fitted, there may be problems for owners who adopted a wait-and-see approach.

In the past, owners have tended to go where the bunkers are low cost – even if that means some risk to quality – but given the supply position, it seems less likely that they will be able to source LSFO or gasoil without having long term agreements in place.

How long the squeeze persists is anyone’s guess – though the refiners will be looking to manage their risk as well as taking the opportunity to control supply of compliant fuel so as to shorten payback on their investments.

Even after supply/demand normalises, the post-2020 era will be one of higher fuel prices, changes that make alternatives more attractive to owners planning for newbuildings in the next few years.

From March 1 this year, all vessels trading globally must report their fuel consumption in line with the IMO’s Data Collection System, information which will be used to formulate its longer term plans to tackle climate change. From March 1 they must do the same for the IMO Data Collection System.

In January 2021, the North Sea and Baltic Sea Nitrogen Emission Control Areas will take effect, putting further pressure on permissible emissions of NOx from shipping in these areas.

By 2023, the IMO will have set out its carbon strategy, at which point the options for the industry are likely to become even tighter – pay a levy for continuing to use fossil fuels or adopt alternatives that offer a cleaner long term solution.

A sustained high price for LSFO or marine gasoil, especially when the cost of a carbon tax is added, might be a boost to LNG but could also make Methanol competitive as a marine fuel for newbuildings and conversions in specific shipping sectors.

Granted, we may not see early adoption of methanol on tramping bulkers or large tankers, but as the marine fuel market moves from a spot business to one defined more by long term supply with respect to some fuels with lower availability, it becomes more attractive.

Short sea shipping, ferries, inland waterways and workboats – all sectors that have flirted with LNG as a fuel – are all potential markets for methanol. The environmental argument is irrefutable: unlike LNG which only solves the SOx/NOx emissions problem, methanol offers a future pathway to a zero carbon emissions profile, so makes no contribution to global warming in addition to being compliant in terms of SOx and NOx.

Several existing plants are already producing low-carbon methanol through a carbon capture/re-injection production loop. Methanol production offers a wide range of feedstock and process technologies for ’future proof’, zero-carbon marine fuels. 

Biomass, like municipal solid waste and forestry residues can be gasified to produce methanol, while biomethane captured from landfill or wastewater treatment plants can be turned into methanol.  Renewable electricity from wind, solar, geothermal and hydropower plants along with waste CO2 and even atmospheric CO2 can be used as the building blocks for renewable methanol or “e-fuels” production.

As a low flashpoint fuel, Methanol is subject to the revision of Marpol Annex VI and should have full regulatory approval by 2023. Equipment manufacturers have responded, with engine maker MAN BW Diesel investing substantially in a dual fuel, main engine capable of burning a range of low sulphur fuels efficiently and safely, with an impressive emissions scorecard to date for seven vessels already running on Methanol (with four more on order). Chevron Marine Lubricants has developed a range of cylinder lubricant oils designed especially for dual fuel engines burning low sulphur fuels such as methanol.

To generate a like-for-like comparison of the costs of methanol versus LNG or LSFO, the industry still requires a better means of pricing than the current link to the IMPCA petrochemical benchmark.

To do this, the Methanol Institute has been working with Lloyd’s Register to develop a fuel comparison model, which will soon be officially launched as an online calculator available free of charge to the industry, enabling owners and operators to understand the comparative fuel costs associated with HFO, LSFO, and LNG, versus operating methanol-based propulsion.  

Using the calculator, potential users of methanol can examine the opportunity in detail, including by type and size of ship, by geographic region or trading area.

The 2020 deadline is focussing minds on the short term, but it is clear that the marine fuels market will not escape disruption in the longer term too.

Methanol may not be the fuel of the masses by 2020, but it could be the marine fuel of choice for a broad category of vessels through the remainder of the century and beyond – especially for those spending the majority of their time within ECAs.

Owners who are able to think beyond the next few years to the next phase of regulation should be considering what the marine fuel market will look like, and how alternatives such as methanol fit into that future.

Photo credit: Methanol Institute
Published: 23 March, 2018

 

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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