Shipping Giants May Decarbonize With One Common Chemical

Methanol is a ubiquitous chemical, used to make everything from paints and plastics to cosmetics and car parts. Increasingly, however, companies are eyeing a new purpose for the compound: a low-carbon fuel for cargo ships.

Today, most ocean-crossing vessels burn petroleum products, including tar-like heavy fuel oil, in their massive diesel engines. As a result, international shipping accounts for about 3 percent of the world’s annual greenhouse gas emissions, along with significant amounts of smog-forming and health-harming air pollutants.

As shipping’s emissions rise, and as maritime regulators crack down on pollution, the industry is searching for cleaner ways to power the behemoth vessels that underpin the modern economy. Methanol, or CH₃OH, is gaining favor as an alternative ​“drop-in” fuel that can be used immediately as companies develop truly zero-carbon solutions. Methanol doesn’t produce harmful soot or particulate matter when burned. If made from renewables, the chemical can sharply curb carbon dioxide emissions compared to using oil-based fuels, though it still emits some CO₂.

The latest example of industry uptake comes from CMA CGM, one of the world’s largest container shipping companies and Walmart’s top shipping partner. The French carrier recently placed orders worth billions of dollars for new vessels that can run on methanol. Now CMA CGM expects to have 24 such ships in service by 2027, the company told Canary Media.

The new orders, announced last week, give CMA CGM a lead over its competitor Maersk. The Danish shipping giant has 19 methanol-powered ships in the works and helped put methanol on the map in 2021 when it ordered the first methanol-burning container vessel, which is set to launch in early 2024. All told, Maersk’s new ships could help avoid 2.3 million metric tons of annual carbon dioxide emissions if they’re fully powered by renewably produced methanol, the company said. That’s akin to taking 512,000 gas-powered passenger cars off the road for one year.

“The momentum for methanol as a marine fuel continues to build,” said Paul Hexter, president of Waterfront Shipping, a subsidiary of the world’s top methanol producer, Methanex.

Hexter said that, within the next few years, the industry is expected to have some 125 vessels that can operate on methanol in service. That’s a small fraction — about 0.25 percent — of the roughly 50,000 merchant ships that move cargo internationally today. But there were zero methanol-powered ships on the water only a decade ago.

Yet building shiny new fleets is only the first step for methanol-powered shipping. Companies and government agencies still need to invest billions of dollars to upgrade port infrastructure and add refueling equipment to keep these ships filled up.

And, crucially for the climate, the industry must also dramatically scale production of so-called green methanol in order to make a dent in the industry’s planet-warming emissions. Much of the methanol carried in today’s tankers and burned in ship engines is made using fossil gas. Renewably made methanol remains significantly more expensive to produce than other marine fuels — and is in extremely scarce supply.

Methanol’s green credentials depend on how it’s made

Globally, methanol producers churn out about 110 million metric tons of the toxic alcohol every year. Only a teeny sliver of the total — less than 200,000 metric tons — comes from renewable sources, according to a 2021 report by the Methanol Institute and the International Renewable Energy Agency.

Hexter estimated that roughly 3.5 million metric tons of the colorless liquid will be needed to supply the first 125 or so methanol-powered ships. That’s more than 15 times the existing production capacity for green methanol.

But the extent to which methanol can reduce planet-warming emissions depends entirely on how the fuel is made.

Two versions of lower-carbon methanol fall under the ​“green” umbrella.

The first, and more common, approach is ​“bio-methanol.” Organic materials, such as crop waste, paper pulp or landfill gas, are fermented or subjected to high temperatures to make synthetic gas; the gas is then processed in a reactor. The second version, ​“e-methanol,” is made by combining hydrogen with carbon dioxide. Ideally, the hydrogen is produced using renewable electricity. The CO₂ can be captured from the exhaust fumes of power plants or, potentially, sucked directly from the sky using direct air capture.

Burning green methanol still results in CO₂ emissions, simply because CH₃OH contains carbon atoms. However, generally speaking, e-methanol made from renewables and captured CO₂ can have a relatively tiny footprint when compared to the ​“well-to-wake” lifecycle emissions of marine gas oil, according to a 2021 analysis by the International Council on Clean Transportation.

Bio-methanol made from plant biomass can curb emissions by 70 to 80 percent, researchers said. By contrast, conventional methanol from fossil gas, known as ​“gray” methanol, can actually increase CO₂ emissions compared to marine gas oil, though it still results in fewer air pollutants.

The drop-in solution might have a limited role

Although chemical tankers have carried methanol in their cargo holds for decades, companies didn’t begin using the liquid to power engines until relatively recently.

In 2016, Waterfront Shipping began operating the world’s first ocean-going vessel capable of using methanol. The chemical tanker, named Lindager, has ​“dual-fuel” engines that can run on either methanol or oil-based fuels. Virtually all methanol-powered ships in use or being built today — including CMA CGM’s — have a similar set-up, which enables ship operators to switch between fuels depending on the price or availability.

This compatibility is a major reason why methanol is quickly taking off.

With relatively minor modifications to a ship’s engine and fuel system, the chemical can be used as a drop-in replacement for diesel fuels. The liquid is stored at room temperatures, so it doesn’t require costly cryogenic tanks, as does liquefied natural gas. Methanol supplies take up less space on board than do batteries or tanks of hydrogen or ammonia. And the safety standards for handling and storing CH₃OH are already in place.

Waterfront Shipping now uses 18 dual-fuel vessels to carry cargo worldwide, representing 60 percent of its operating fleet, Hexter said.

“From a technical point of view, there’s quite a big difference compared with the other alternatives for shipping,” said Erik Hannell, CEO of Stena Bulk, a Swedish tanker shipping company. ​“You can actually invest in [methanol] today.”

Stena Bulk has about 80 total vessels in its fleet, including four tankers with dual-fuel engines. Hannell said the ships primarily run on conventional methanol, though the company intends to blend more green methanol into the mix as supplies become more available — and as its customers grow more willing to pay a ​“green premium” to buy cleaner but costlier versions of the fuel.

Shipping companies say they’re working closely with the methanol industry to accelerate the global production of bio-methanol and e-methanol.

Source, supply and deliver green methanol

CMA CGM recently signed an agreement with China’s Cosco Shipping Holdings and Shanghai International Port Group to source, supply and deliver green methanol for its future vessels. To date, Maersk has made nine agreements with methanol producers in the United States, Asia and Europe, plus the governments of Spain and Egypt, to boost supplies.

Vancouver-based Methanex can make some 9.3 million metric tons of the chemical every year across its 11 facilities worldwide. In an email, the company didn’t disclose how much of that methanol is considered ​“green” but noted Methanex’s efforts in the space, including an ongoing investment in Carbon Recycling International, a developer in Iceland that captures carbon from a nearby geothermal power plant and turns it into liquid fuels.

Methanex can also blend gas-based methanol with bio-methanol from animal manure at its facility in Geismar, Louisiana. In February, its subsidiary Waterfront Shipping and Japan’s Mitsui O.S.K. Lines sailed a chemical tanker called Cajun Sun from Geismar to Antwerp, Belgium using the bio-methanol blend over the 18-day trip across the Atlantic Ocean. The companies claim it was the ​“first-ever net-zero voyage fuelled by bio-methanol.”

Yet experts say that even if methanol producers can meet rising demand, the chemical is only expected to play a modest role in decarbonizing the shipping industry owing to its key limitation: the carbon atoms. Capturing or otherwise canceling out the CO₂ adds more steps and costs for producers.

“Because of the nature of the molecule, methanol does look less interesting as a longer-term solution,” said Andrew Howell, director of investor influence at EDF+Business, an initiative of nonprofit Environmental Defense Fund that works with private companies on climate strategies.

Still, he added, methanol remains one of the few near-term options that shipping companies have for tackling emissions using existing infrastructure. Other promising zero-carbon alternatives, such as ammonia and hydrogen, are in much earlier stages of technology development and remain potentially decades away from achieving mainstream adoption.

“There’s going to be a role for multiple solutions,” Howell said. ​“Even though we don’t have all the answers, we don’t have the luxury of waiting around” to find the single-best replacement for diesel.