The adoption of methanol as a bunker fuel reached “a significant turning point” in 2022 due to developments led by A.P. Møller – Mærsk A/S, also known as Maersk, states the Chief Operating Officer at Methanol Institute.
“The Maersk announcement was significant because they are the number one shipper in the world and the decision by them to adopt methanol as the first fuel out of the gate indicates logic in doing so,” Chris Chatterton told bunkering publication Manifold Times.
“Their decision is not purely based on lowering carbon emissions but also based on broader aspects and economics including the ability to introduce methanol far into the future with much less risk than other alternative fuels.
“Maersk was the one to start the ball rolling and this had a ripple effect prompting many competitors to seriously consider methanol as a bunker fuel at different levels [targeting IMO 2030/2050].”
Methanol Institute, which serves as the trade association for the global methanol industry, has meanwhile been heavily involved in advising on enquiries from shipowners and bunkering firms – all keen to jump onto the methanol bandwagon, shares Chatterton.
“We know new vessels are coming and they require methanol as a bunker fuel at certain trading ports; hence, we have been very busy attending enquiries advising on locations for bunkering companies to establish market presence since the beginning of 2023,” he notes.
“For starters, we believe Singapore will make very good sense for methanol bunkering operations to launch simply because the republic is well known as a top bunkering port and it has everything available for players to support methanol refuelling activity.”
A Singapore project closely being monitored by Methanol Institute is the detailed feasibility study of methanol bunkering logistics in Singapore by Mitsui & Co., Ltd., Mitsui & Co. Energy Trading Singapore Pte. Ltd., Maersk Oil Trading, and American Bureau of Shipping.
The similar study features Singapore-based bunker player Kenoil Group of Companies (Kenoil) which is advising on last-mile delivery solutions for methanol bunkering.
“This study is considered by the Methanol Institute as the second major milestone for the adoption of methanol as an alternative bunker fuel for the shipping sector,” believes Chatterton.
The Methanol Institute says it is also working closely with class on a potential study for Singapore port operator and supply chain company PSA International Pte Ltd targeting methanol bunkering for smaller vessels.
“Reduction of emissions by local Singapore shipping firms will present them with a stronger case when approaching big shipping firms as a strategic partner,” he explains.
“This is the kind of work we are carrying out in the background to help domestic maritime businesses improve on their competitive advantage when serving these large international fleets – whose clients have a very big focus on sustainability and third-party emissions.”
Moving forward, Chatterton notes the return of shipping rates to pre-Covid levels and the introduction of Carbon Intensity Indicator (CII) requirements (taking effect from 2023) encouraging shippers to explore economic avenues for reducing operating costs [i.e. bunkers].
“That will translate into even more interest in methanol as a bunker fuel because the material, which is already a compliant marine fuel, is much more efficient to transport and store when compared to other alternative marine fuels,” he says.
“We need to look at today what we can do. In general, the economics of the shipping market will be the key driver enabling methanol to be adopted at a higher pace going forth over next couple years as market begins to return to more normal rates.”
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Photo credit: NYK, Waterfront Shipping, Vopak, TankMatch
Published: 27 January, 2023
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