Canadian firm Methanex, one of the largest methanol producers, told Argus how it sees the future of biomethanol in the shipping industry, and the challenges the development of this new fuel could face. The firm recently completed what it dubbed the first ‘net zero’ shipping voyage fuelled by biomethanol blend.

27 March 2023

What role do you think renewable methanol will play in achieving net zero emissions in the shipping industry?

Methanol has emerged as a leading alternative marine fuel as shipping companies recognise its low-carbon potential. Currently, there are more than 125 vessels operating or on order and many more projects under development for methanol newbuilds and conversions.

As most new vessels are starting to come online over the next couple of years, regulations and bunkering infrastructure are being developed in ports globally to support the transition. Because methanol is already used in over 120 ports and is handled and bunkered similarly to diesel, we expect the transition to be relatively straightforward for methanol compared with other alternative fuels.

How was the ‘net zero’ of your first biomethanol voyage counted?

During the 18-day voyage, net-zero greenhouse gas emissions on a lifecycle basis — including the production process — were achieved through the use of a fuel blend, comprised of 80pc ISCC certified bio-methanol with 20pc natural gas-based methanol.

The bio-methanol used in this voyage was produced from renewable natural gas (RNG) derived from captured methane from animal manure feedstock, which would have otherwise been emitted into the atmosphere. Instead, burning it as a fuel, which releases CO2, has a far lower warming effect than the previously captured methane, which is 25x more potent than CO2 according to the EPA. Marine gasoil (MGO) was also used as a pilot fuel, representing approximately 5pc of the fuel used.

Bureau Veritas then conducted an audit of the greenhouse gas emission calculations from the biomethanol fuel blend — plus all the other fuels — consumed during the voyage. Also, the Climate Neutral Commodity, an independent certification party validated the net-zero voyage against best practices as defined by the ISCC and issued the certification.

Do you see the demand for renewable methanol mainly coming from the shipping industry or elsewhere?

We see significant demand potential emerging in the marine sector as a large and growing number of shipping companies are ordering — or considering — methanol vessels as greenhouse gas regulations become more stringent. We are also seeing increasing interest in lower-carbon methanol for use in other fuel and chemical applications.

How does the demand for green methanol compare with green ammonia? Does green methanol have a competitive advantage, if any?

One of the unique qualities of methanol versus ammonia is that it is a liquid fuel under ambient conditions. This makes methanol easy to transport, store and bunker using standard safety procedures that are similar to the well-established procedures for diesel. Thus, the cost of methanol-fuelled vessels and land-based infrastructure to store and supply methanol is significantly lower than other alternative fuels that require pressurization or cryogenics.

Methanol also has a higher volumetric energy content than alternative fuels such as ammonia or hydrogen and requires less frequent bunkering as well as being more environmentally benign compared with other options as it dissolves in water and biodegrades rapidly.

What are your future plans for green methanol production?

While today we produce methanol from natural gas, methanol can also be made from renewable sources, such as renewable natural gas, biomass, and green hydrogen combined with recycled carbon dioxide. Because our manufacturing facilities have a lifespan of several decades, and the process to make methanol remains largely the same regardless of feedstock used, we can easily modify existing infrastructure to produce lower-carbon methanol. Methanex is currently exploring pathways to gradually decarbonise our existing plants using alternative feedstocks or renewable electricity.

In addition, pursuing staged investments allows us to adjust production based on product demand and feedstock availability. We also plan to invest an additional $1 mn in 2023 to refine the potential scope and for a Carbon Capture and Storage (CCS) investment in Geismar, Louisiana.

This year, we will also conduct a technical and economic feasibility study using green hydrogen at existing plants to produce methanol with a lower carbon intensity. If the concept proves viable, lower-carbon methanol could be produced alongside conventional methanol at some of our sites, to match the growing market needs for low-carbon methanol.

What challenges are you facing in achieving these plans?

‘The green premium’ refers to the gap between the cost to produce lower-carbon methanol and what customers are willing to pay for it. While we are seeing the gap narrow, this remains a key challenge to scaling the production of blue or green methanol.

We are currently working to develop concepts, test feasibility and liaise between customers and suppliers on this. As markets and regulations shift and government incentives evolve, we are continually working to understand what solutions our customers want, gauge their willingness to pay a premium for blue or green methanol, and facilitate the supply needed to meet demand.

By Portia Kentish

Photo credit and source: Argus Media
Published: 30 March, 2023