The Week in Alternative Fuels
Here are some key developments in alternative bunker fuels from the past week.
PHOTO: Model of a future methanol-fuelled COSCO Shipping Lines container ship. At 24,000 TEU, these ships will become among the biggest in the world. COSCO Shipping
Ammonia is considered to be the most scalable green fuel of choice by several prominent academics. But as both engine technologies and safety guidelines for ammonia have yet to mature, it is more of a medium- to long-term choice. For near-term deployment shipowners have increasingly been looking to methanol for carbon emission reductions. Vessels can run on this hydrogen derivative with only minor modifications, which could significantly reduce their energy transition costs.
While there are only some 25 methanol-fuelled vessels currently in operation or on order for delivery this year, this figure is set to more than triple to 84 by 2028, according to classification society DNV.
Methanol has been in the spotlight and grabbed several headlines this week, as both supply and demand developments support its rosy future.
Hong Kong-based Orient Overseas Container Line and the China's COSCO Shipping Lines have placed a combined order for 12 massive 24,000 TEU methanol-ready container ships to be delivered from 2026, which are set to create a bigger future bunker market methanol.
Global Energy Group plans to launch Singapore's first dedicated methanol bunkering vessel in 2023 in order to expand the nation's presence in the low-carbon bunkering market. Methanol will give Singapore's bunker market a "new dimension," Stellar Shipmanagement's Kelvin Kang said.
Danish shipping company A.P. Moller - Maersk has taken the lead in stimulating methanol production for bunkering. After partnering with Egyptian authorities last week to boost methanol production, it has now turned its attention to Spain. In collaboration with the Spanish government, Maersk will explore how Spain can produce 2 million mt/year of green methanol for bunkering in its northern Galicia and southern Andalusia regions.
By Konica Bhatt
Here is our selection of five top alternative fuels stories from this week:
OOCL orders seven methanol-ready container ships
Hong Kong-based Orient Overseas Container Line (OOCL) has become the latest container line to opt for methanol as an alternative fuel, with seven massive 24,000 TEU methanol-ready ships for $1.68 billion.
The methanol-ready container ships will be built by Chinese shipbuilding company Nantong COSCO KHI Ship Engineering and delivered from the third quarter of 2026.
OOCL’s chief operating officer Kenny Ye says that these methanol-compatible vessels will be an important step in the company’s “decarbonization journey towards a greener future.”
Classification society DNV’s data shows that the number of methanol-fuelled vessels currently in operation or on order for delivery this year stands at 25.
This number will more than triple over the next few years. A total of 84 methanol-fuelled vessels are registered as in operation or on order towards 2028.
Methanol has been gathering momentum as an alternative fuel choice among container liners in particular recently. Several liners have joined projects to launch green corridors between major ports like Rotterdam and Singapore.
Their incentive to do so has partly come from freight heavyweights like Amazon, IKEA and Unilever, which launched the Cargo Owners for Zero Emission Vessels (coZEV) consortium last year. The consortium pledged a move to zero carbon shipping by 2040.
China's COSCO Shipping Lines (a COSCO subsidiary like OOCL) placed a similar order for five 24,000 TEU dual-fuel container ships that can run on methanol.
Last month, A.P. Moller - Maersk put in an order for six 17,000 TEU dual-fuelled methanol container ships, bringing its total orderbook to 19. And Hong Kong-based dry bulk shipping company Pacific Basin Shipping chose methanol as the preferred fuel for its dual-fuel dry bulk carriers.
In July, Norway-headquartered feeder shipowner MPC Container Ships (MPCC) ordered two methanol-ready 1,300 TEU vessels for delivery in the second half of 2024.
COSCO places massive order for 12 methanol-powered container ships
Chinese shipping company COSCO Shipping Lines has placed orders for a dozen 24,000 TEU dual-fuel container ships that can run on methanol.
Out of the 12 methanol-powered container ships, seven are set to be delivered to COSCO’s subsidiary Orient Overseas Container Line, and the remaining five to COSCO Shipping Lines.
These vessels will be built by China’s Nantong Cosco Khi Ship Engineering (NACKS) and Dalian COSCO KHI Ship Engineering, with deliveries expected to commence from 2026 onwards.
COSCO now joins other container giants such as A.P. Moller - Maersk and CMA CGM, which have placed orders for methanol-powered container ships.
Earlier this month, Maersk placed an order for six additional dual-fuelled methanol ships, bringing its total order book to 19 now.
Singapore's first methanol bunkering vessel will debut in 2023
Global Energy Group will introduce Singapore's first dedicated methanol bunkering tanker by the end of next year through two of its subsidiaries.
Bunker supplier Global Energy Trading and shipping company Stellar Shipmanagement are both subsidiaries of Global Energy Group.
Sasaki Shipbuilding will build the 4,000-dwt vessel, which will carry both biofuel and methanol. It will be classified by Bureau Veritas.
Global Energy Group's group managing director Loh Hong Leong says the upcoming vessel could pave the way for the next generation of bunker tankers.
As a bunker fuel, methanol adds a "new dimension" to Singapore's bunker market, according to Kelvin Kang, general manager of Stellar Shipmanagement.
Singapore is already looking to extend its leadership as the world’s largest bunkering port into the low-carbon bunkering market, which could help expedite the global shipping sector’s move towards decarbonisation goals.
According to Singapore's Senior Minister of State for Finance and Transport Chee Hong Tat, Singapore has carried out over 40 biofuel bunker operations, with more than 70,000 mt of biofuel blends supplied to ocean-going vessels by the beginning of October.
Meanwhile, Singapore's Maritime and Port Authority (MPA) recently joined a consortium that includes A.P. Moller - Maersk aimed at accelerating the use of ammonia marine fuel in Singapore.
The consortium will jointly develop an ammonia bunker vessel design that has been approved in principle by the classification society ABS. Singapore-based PaxOcean Engineering and bunker vessel operator Hong Lam Marine have also agreed on the design of an ammonia bunker vessel.
Furthermore, Singapore's MPA has signed an agreement with the Dutch Port of Rotterdam to create a green shipping corridor.
Maersk eyes large-scale green methanol production in Spain
Danish Shipping company A.P. Moller - Maersk is looking to produce up to 2 million mt/year of green methanol in Spain to supply its fleet and reduce emissions.
Maersk has collaborated with the Spanish Government to explore the value chain from renewable energy sources to the bunkering of vessels in the Andalusia and Galicia regions of Spain.
Maersk has 19 vessels capable of running on green methanol that will come into operation between 2023-2025. Approximately 750,000 mt of green methanol will be required to supply these vessels. It has already secured seven strategic partnerships so far this year to secure the initial volumes needed for these vessels.
Maersk has been working towards its goal of attaining net zero emissions by 2040 and needs nearly 6 million mt/year of green methanol to attain its 2030 fleet emissions target.
Even larger quantities are needed to attain a net zero level of emissions by 2040, it says.
The company says wider availability of green fuels at competitive price levels remains the primary hurdle in the path to decarbonize shipping.
Maersk’s chief executive Soren Skou says the project has the potential to ease these hurdles as Spain “holds key characteristics to help solve this challenge with its great hydrogen ambitions and aspiring sustainability goals.”
Spanish President Pedro Sánchez said that the project “is perfectly aligned with Spain's strategy of reindustrialisation” and will advance “the fulfillment of the common commitment of decarbonisation of the European Union.”
Hafnia, Clean Hydrogen Works partner to produce blue ammonia as a fuel
Singapore-based tanker company Hafnia has partnered with project developer Clean Hydrogen Works (CHW) and others to develop a new clean fuel production facility on the Mississippi River in Louisiana, US.
It will produce around 7.2 million mt/year of "blue" ammonia – using hydrogen and natural gas feedstocks – from late 2027. The ammonia is blue because CO2 emitted during its production has been captured.
Hafnia will then transport this blue ammonia to global markets from 2028.
As a result, companies like Norway-based Amon Maritime, which is preparing to launch an ammonia-fuelled vessel fleet, could potentially benefit from this supply-side development.
CHW says ammonia can play a critical role in the global energy transition by drawing on and complementing renewables to decarbonise critical sectors, including the marine sector.
According to the International Energy Agency (IEA) and the classification society DNV, ammonia will dominate the bunker fuel transition and will overtake biofuels as the preferred fuel for green shipping by 2050.
During its production process, Hafnia and CHW's Mississippi River facility is projected to capture an estimated 12 million mt/year of carbon dioxide (CO2) at a capture rate of up to 98%.
This means that nearly 98% of the CO2 from the facility will be captured and stored, which is high compared to current industry norms.
"Today's standard carbon capture technology can capture 90% of carbon emissions but achieving zero emissions in the coming decades will require capturing the remaining 10%." explains the IEA.
Moreover, Hafnia and others are exploring additional technologies that could result in a "zero-carbon or carbon-negative hydrogen-ammonia production facility".
"The closer a carbon capture and storage system gets to 100% efficiency, the more challenging and more expensive it becomes to capture additional carbon dioxide," according to Howard Herzog, a senior research engineer at MIT's Energy Initiative.
CO2 captured at the Mississippi River facility will be transported and stored by Denbury Carbon Solutions, a US-based pipeline operator.
As of today, only a handful of carbon capture projects have achieved capture efficiencies greater than 95%, with ION Clean Energy's 98% demonstration rate being the most notable.
