On The Rise: Methanol-Fuelled Ship Orders

On The Rise: Methanol-Fuelled Ship Orders
July 3, 2024 Hannah Marshallsay

The shipping industry has seen a significant increase in orders for methanol-fuelled ships, marking a notable move towards more sustainable and eco-friendly solutions.

This shift towards sustainability in global shipping is driven by growing concerns about emissions and stricter environmental regulations. A quiet but impactful change is underway in sea freight, poised to reshape container shipping for decades to come. The focus is on fuel, with methanol-fuelled ships now in higher demand compared to the more common liquid natural gas (LNG)-powered vessels. Orders for methanol-fuelled ships have surpassed those for LNG ships, a trend that shows no signs of slowing. This change is evident not only in new ship orders but also in the retrofitting of existing vessels to meet this rising demand.

Methanol vs. LNG

While methanol and LNG are leading options for cleaner marine fuels, methanol is rapidly gaining ground over LNG. Both fuels have lower emissions compared to traditional marine fuels, but LNG’s main advantage lies in its established infrastructure. With numerous bunkering facilities and supply chains already in place, LNG is readily accessible in certain regions. Additionally, LNG has a higher energy density than methanol, providing more power per unit volume.

On the other hand, methanol is a more versatile fuel, compatible with a broader range of engine types and sizes, making it suitable for both internal combustion engines and fuel cells. This versatility makes methanol an ideal choice for retrofitting existing vessels. Methanol can also be produced from various feedstocks, making it a more stable and cost-effective fuel source than LNG. As the industry adopts methanol technology, its costs are expected to decrease further.

Growth in Methanol-Powered Ship Orders

The container sector is leading the surge in orders for alternative-fuel vessels, according to recent industry data. So far this year, 128 alternative-fuel vessels have been ordered, reflecting a 55% year-on-year increase, as reported by DNV Alternative Fuel Insight. Methanol-fuelled container vessels account for nearly 80% of these new orders, highlighting the container ship market’s pivotal role in driving the adoption of methanol as a fuel.

Methanol Fuel Benefits and Challenges

Methanol stands out as an attractive alternative fuel for several reasons. The International Maritime Organisation (IMO) has issued interim guidelines, simplifying the process for shipowners to construct methanol-powered vessels. Additionally, building a methanol-fuelled ship is approximately 30% cheaper than an LNG-powered ship due to lower equipment costs. The shorter construction time further reduces costs compared to LNG ships.

However, the primary challenge lies in the current lack of methanol supply infrastructure. Despite this, the presence of major container ship port hubs in Europe and Asia facilitates the development of methanol bunkering infrastructure. Ports are more inclined to invest in this infrastructure, knowing that liner companies, which often have their own terminals, can commit to substantial fuel requirements.

Significant Milestones for Methanol Ships

Methanol-fuelled ships have been adopted by some of the world’s major shipping lines. This year, ‘Ane Maersk,’ the first ultra-large container vessel (ULCV) powered by methanol, made its debut and made history with the first methanol bunker operation in Europe taking place at the Port of Antwerp-Bruges. Ane Maersk can carry nearly eight times the cargo of its predecessor, the ‘Laura Maersk,’ which launched in September 2023 as the world’s first methanol dual-fuel container ship. The successful maiden voyage of this ULCV marks a significant milestone toward the mainstream adoption of methanol as a maritime fuel.

In August, Maersk and Nike will unveil one of the world’s first methanol-enabled vessels in Los Angeles. This innovative container ship, powered by green fuel for its maiden voyage, can carry over 16,000 TEU. It will be the fifth container ship in Maersk’s fleet operating on green methanol fuel, with an additional 20 methanol-enabled vessels on order.

These developments signify a major step forward in the shipping industry’s transition to more sustainable fuel options, underscoring the growing importance of methanol in global maritime operations.

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