Cost and availability among concerns in methanol adoption: DNV
Methanol is increasingly being seen as a practical and scalable sustainable bunker fuel alternative, but cost and fuel availability remain some of the significant hurdles in its wide scale adoption, a report by class society DNV has said.
IMAGE: Waterfront Shipping's methanol-fuelled Savonetta Sun. Waterfront Shipping
In the study, DNV noted that current methanol-fuelled engines and related technical systems have reached a high level of readiness.
DNV counted about 83 methanol-capable ships already in operation and another 367 on order. Methanol-capable vessels are second only to LNG-capable vessels among alternative fuels, according to its tally.
Most are container vessels, with several car carriers, chemical tankers and bulk carriers also included.
According to DNV, 40 of these ships, mostly containerships, are conventional fuelled vessels that have been converted, or are scheduled for conversion, to operate on methanol.
DNV also highlighted significant improvements in methanol engines and related fuel technologies.
While ship-related challenges have eased considerably in recent years, the report pointed to insufficient progress in areas such as fuel demand, fuel availability and energy costs.
For regulatory compliance and emissions reduction, methanol adoption needs to focus on methanol with low greenhouse-gas (GHG) intensity, such as bio-methanol or e-methanol.
Most methanol used on ships to date has been fossil methanol, which has a higher well-to-wake GHG intensity than fuel oil. Demand for low-GHG methanol has remained modest, with only small volumes of bio-methanol bunkered since 2023, DNV said.
Current global green-methanol production capacity of 2.2 million mt is more than sufficient for today’s demand, but far below the levels expected to support a future fuel transition, according to the analysis.
The report estimates that if the IMO’s net-zero framework is adopted, demand could rise to as much as 50 million mt by 2040.
Renewable methanol’s competitiveness on price with conventional fuels remains a major challenge. Bio-methanol is currently priced at around $2,500/mt MGO equivalent, almost three times the price of MGO, DNV noted.
Future cost estimates from DNV indicate that producing and distributing bio-methanol could cost between $1,200 and $2,050 per mt MGO equivalent in 2050.
The key barrier to scaling up green-methanol bunkering is not production capacity, but the need for strong and sustained demand to unlock that capacity, the class society concluded.
By Nachiket Tekawade
Please get in touch with comments or additional info to news@engine.online
