Connect with us

Methanol

Argus Media: Low-carbon methanol costly EU bunker fuel option

Despite GHG emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels.

Admin

Published

on

resized argusmedia

Ship owners are ordering new vessels equipped with methanol-burning capabilities, largely in response to tightening carbon emissions regulations in Europe. But despite the greenhouse gas (GHG) emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels.

17 May 2024

Ship owners operate 33 methanol-fueled vessels today and have another 29 on order through the end of the year, according to vessel classification society DNV. All 62 vessels are oil and chemical tankers.

DNV expects a total of 281 methanol-fueled vessels by 2028, of which 165 will be container ships, 19 bulk carrier and 14 car carrier vessels. Argus Consulting expects an even bigger build-out, with more than 300 methanol-fueled vessels by 2028.

A methanol configured dual-fuel vessel has the option to burn conventional marine fuel or any type of methanol: grey or low-carbon.

Grey methanol is made from natural gas or coal. Low-carbon methanol includes biomethanol, made of sustainable biomass, and e-methanol, produced by combining green hydrogen and captured carbon dioxide.

The fuel-switching capabilities of the dual-fuel vessels provide ship owners with a natural price hedge. When methanol prices are lower than conventional bunkers the ship owner can burn methanol, and vice versa.

Methanol, with its zero-sulphur emissions, is advantageous in emission control areas (ECAs), such as the US and Canadian territorial waters. In ECAs, the marine fuel sulphur content is capped at 0.1pc, and ship owners can burn methanol instead of 0.1pc sulphur maximum marine gasoil (MGO). In the US Gulf coast, the grey methanol discount to MGO was $23/t MGO-equivalent average in the first half of May. The grey methanol discount averaged $162/t MGOe for all of 2023.

Starting this year, ship owners travelling within, in and out of European territorial waters are required to pay for 40pc of their CO2 emissions through the EU emissions trading system. Next year, ship owners will be required to pay for 70pc of their CO2 emissions. Separately, ship owners will have to reduce their vessels' lifecycle GHG intensities, starting in 2025 with a 2pc reduction and gradually increasing to 80pc by 2050, from a 2020 baseline.

The penalty for exceeding the GHG emission intensity is set by the EU at €2,400/t ($2,596/t) of very low-sulplhur fuel oil equivalent. Even though these regulations apply to EU territorial waters, they affect ship owners travelling between the US and Europe.

Despite the lack of sulphur emissions, grey methanol generates CO2. With CO2 marine fuel shipping regulations tightening, ship owners have turned their sights to low-carbon methanol.

But US Gulf coast low-carbon methanol was priced at $2,317/t MGOe in the first half of May, nearly triple the outright price of MGO at $785/t. Factoring in the cost of 70pc of CO2 emissions and the GHG intensity penalty, the US Gulf coast MGO would rise to about $857/t. At this MGO level, the US Gulf coast low-carbon methanol would be 2.7 times the price of MGO. By comparison, grey methanol with added CO2 emissions cost would be around $962/t, or 1.1 times the price of MGO.

To mitigate the high low-carbon methanol costs, some ship owners have been eyeing long-term agreements with suppliers to lock in product availabilities and cheaper prices available on the spot market.

Danish container ship owner Maersk has led the way, entering in low-carbon methanol production agreements in the US with Proman, Orsted, Carbon Sink, and SunGas Renewables. These are slated to come on line in 2025-27. Global upcoming low-carbon methanol projects are expected to produce 16mn t by 2027, according to industry trade association the Methanol Institute, up from two years ago when the institute was tracking projects with total capacity of 8mn t by 2027.

By Stefka Wechsler

 

Photo credit and source: Argus Media
Published: 21 May 2024

Continue Reading

Methanol

Mitsubishi Shipbuilding receives orders for Japan’s first methanol-fuelled RoRo cargo ship duo

Two ships will be built at the Enoura Plant of MHI’s Shimonoseki Shipyard & Machinery Works in Yamaguchi Prefecture, with scheduled completion and delivery by the end of fiscal 2027.

Admin

Published

on

By

Mitsubishi Shipbuilding receives orders for Japan's first methanol-fuelled RoRo cargo ship duo

Mitsubishi Shipbuilding Co., Ltd., a part of Mitsubishi Heavy Industries (MHI) Group, on Wednesday (19 June) said it has received orders from Toyofuji Shipping and Fukuju Shipping for Japan's first methanol-fueled roll-on/roll-off (RORO) cargo ships. 

The two ships will be built at the Enoura Plant of MHI's Shimonoseki Shipyard & Machinery Works in Yamaguchi Prefecture, with scheduled completion and delivery by the end of fiscal 2027.

The ships will be approximately 169.9 meters in overall length and 30.2 meters in breadth, with 15,750 gross tonnage, and loading capacity for around 2,300 passenger vehicles.

A windscreen at the bow and a vertical stem are used to reduce propulsion resistance, while fuel efficiency is improved by employing MHI's proprietary energy-saving system technology combing high-efficiency propellers and high-performance rudders with reduced resistance. 

The main engine is a high-performance dual-fuel engine that can use both methanol and A heavy fuel oil, reducing CO2 emissions by more than 10% compared to ships with the same hull and powered by fuel oil, contributing to a reduced environmental impact. 

In the future, the use of green methanol(2) may lead to further reduction in CO2 emissions, including throughout the lifecycle of the fuel. Methanol-fueled RORO ships have already entered into service as ocean-going vessels around the world, but this is the first construction of coastal vessels for service in Japan.

In addition, the significant increase in vehicle loading capacity and transport capacity per voyage compared to conventional vessels will provide greater leeway in the ship allocation schedule, securing more holiday and rest time for the crew, thereby contributing to working style reforms.

Mitsubishi Shipbuilding, to address the growing needs from the modal shift in marine transport against the backdrop of CO2 reductions in land transportation, labor shortages, and working style reforms, will continue to work with its business partners to provide solutions for a range of societal issues by building ferries and RORO vessels with excellent fuel efficiency and environmental performance that contribute to stable navigation for customers.

 

Photo credit: Mitsubishi Shipbuilding
Published: 20 June, 2024

Continue Reading

Methanol

Maersk and Nike to christen methanol-fuelled boxship at Port of Los Angeles in August

Powered by methanol for its maiden voyage and capable of carrying more than 16,000 containers, the vessel will get its new name at a private ceremony at Port of Los Angeles Outer Harbor.

Admin

Published

on

By

Maersk

A.P. Moller – Maersk (Maersk) on Wednesday (19 June) said it will be christening one of the world’s first methanol-enabled vessels when it arrives in Los Angeles this August.

The firm invited the public to go aboard the container ship in Los Angeles.

Powered by methanol for its maiden voyage and capable of carrying more than 16,000 containers (TEU), the vessel will get its new name at a private ceremony at the Port of Los Angeles Outer Harbor on Tuesday, August 27. 

Maersk’s CEO Vincent Clerc will be on hand, alongside special guest speakers from Nike and leading state and local officials. Nike is a partner in the name-giving event.

“Nike is committed to protecting the future of sport and we leverage science-based targets to guide us through our Move to Zero journey,” said Venkatesh Alagirisamy, Nike Chief Supply Chain Officer.

“Operating one of the largest supply chains in the world, we have a responsibility to advance the innovation and use of more sustainable methods that get us closer to zero carbon and zero waste. By working with suppliers like Maersk, who share our commitment to sustainability, we are scaling our use of biofuels in ocean transportation, our main first-mile delivery channel.”

“This event is not only an opportunity to celebrate a remarkable engineering achievement, but the chance to highlight that we can navigate towards more sustainable supply chains if we work together,” said Charles van der Steene, Regional President for Maersk North America.

On Wednesday, August 28, Maersk invites the public to tour the 350-meter-long vessel, which will be sailing from Asia. Visitors will be able to see the Sailors’ living quarters and even stand on the bridge from where the captain controls the vessel. Public tours will require visitors register for a free ticket via an online registration site that will be activated and announced in August.

This is the fifth container vessel in Maersk’s fleet that can sail on green methanol bunker fuel.

 

Photo credit: A.P. Moller – Maersk
Published: 20 June, 2024

Continue Reading

Methanol

Methanol Institute: Innovative developments and strategic collaborations (Week 24, 10-16 June 2024)

This week highlights notable advancements in methanol fuel technology, strategic partnerships, and industry analyses, underscoring the maritime sector’s ongoing commitment to sustainable fuel solutions.

Admin

Published

on

By

Methanol Institute logo

The Methanol Institute, provides an exclusive weekly commentary on developments related to the adoption of methanol as a bunker fuel, including significant related events recorded during the week, for the readers of bunkering publication Manifold Times:

The past week saw further additions to the potential capacity for production of methanol with announcement of a new facility using waste biomass to create biomethanol for the maritime market. Elsewhere, plans for additional port storage was announced at key ports in China. Finally, analysis by Ship & bunker shows that almost half of the bunker capacity represented by the newbuilding orderbook will be powered by alternative fuels.

Methanol marine fuel related developments for Week 24 of 2024:

Norway to Develop Bio-e-Methanol Production Facility

Date: June 10, 2024

Key Points: Glocal Green and Norwegian Hydrogen are partnering to build a bio-e-methanol plant in Øyer, Gudbrandsdalen, Norway. The facility will produce 150,000 metric tonnes of bio-e-methanol annually, using hydrogen and CO2 from bio-waste and wood waste. The project aims to support the maritime sector's transition to green fuels, leveraging local renewable resources to create sustainable methanol, thus contributing to Norway's environmental goals and the broader global push for cleaner energy solutions.

Green Marine Fuels and Vopak Collaborate on Green Methanol Storage Facilities

Date: June 12, 2024

Key Points: Green Marine Fuels Trading and Vopak have announced a strategic partnership to develop green methanol storage facilities at key ports, including Shanghai Caojing and Tianjin Lingang in China. This collaboration aims to expand the infrastructure needed to support the growing demand for green methanol as a sustainable marine fuel. The facilities will enhance the supply chain for green methanol, aligning with global efforts to decarbonize the shipping industry and promote the use of alternative fuels.

Global Orderbook Analysis: Conventional vs. Alternative Bunker Fuel Demand

Date: June 13, 2024

Key Points: An analysis of the global newbuilding orderbook, conducted by Ship and Bunker, reveals that of a total 33.8 million tonnes (mt) of bunker demand, alternative fuelled ships represent 46% or 15.6mt of bunker demand.

Methanol accounts for 3.2 mt (10%) compared to 10.5mt (31%) for LNG, a figure skewed by the vast orderbook for LNG carriers which partly use their cargo as fuel.

The data from DNV Alternative Fuels Insight indicates a significant shift towards alternative fuels, driven by containerships and LNG carriers, reflecting the maritime industry's continuing focus on reducing carbon emissions and adopting greener fuel options.

 

Photo credit: Methanol Institute
Published: 20 June, 2024

Continue Reading
Advertisement
  • RE 05 Lighthouse GIF
  • EMF banner 400x330 slogan
  • Consort advertisement v2
  • SBF2
  • Aderco advert 400x330 1
  • v4Helmsman Gif Banner 01

OUR INDUSTRY PARTNERS

  • 102Meth Logo GIF copy
  • SEAOIL 3+5 GIF
  • Singfar advertisement final
  • HL 2022 adv v1
  • Triton Bunkering advertisement v2


  • PSP Marine logo
  • intrasea
  • Central Star logo
  • Auramarine 01
  • Trillion Energy
  • E Marine logo
  • Synergy Asia Bunkering logo MT
  • Golden Island logo square
  • Innospec logo v6
  • metcore
  • Headway Manifold
  • Advert Shipping Manifold resized1
  • 400x330 v2 copy
  • VPS 2021 advertisement

Trending