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No chicken and egg situation for methanol – ABS

The adoption of methanol as a marine fuel will not suffer the same lag period as LNG due to diverse ship orders sending clear demand signals.

Gary Howard, Middle East correspondent

April 14, 2023

2 Min Read
Christoph Rasewski
ABS

Speaking at a press event in London, ABS Global Container Lead Christoph Rasewsky said there will be no chicken and egg situation for methanol as a marine fuel, which will enable faster market adoption.

As LNG was emerging as a marine fuel, many owners were hesitant to commit to ordering LNG-fuelled ships due to uncertainty over fuel supply and infrastructure, while those responsible for fuel production and infrastructure were hesitant to commit to projects due to a lack of demand signal from shipowners.

Rasewsky referred to 2011 as the spark for LNG as a marine fuel marked by the delivery of the first major LNG-fuelled vessel. There then followed a long period of inactivity before the orderbook began to fill with orders for LNG-fuelled ships.

Taking 2011 as the starting point and 2027 as the end point, the latest delivery date for an LNG-fuelled vessel in the orderbook, LNG vessels have a compound annual growth rate (CAGR) of 64%, said Rasewsky.

For methanol, with its spark in 2023 and deliveries on the orderbook through until 2028, the CAGR stands at 171%, he said.

“Methanol as a fuel will be in the market much faster than LNG because there is a commitment from huge market players to methanol. This commitment level for LNG came after maybe 10 years,” said Rasewsky.

Orders for methanol-fuelled container ships come from a range of owners and cover a range of ship sizes, said Rasewsky, with a total of around 70 ships on order representing a rough demand potential of 3.5m tonnes of methanol per year—a clear demand signal for fuel producers.

The full decarbonisation impact of the new fuel will require a ramp up in production of green methanol, fuel produced using renewable energy and captured CO₂. Major container lines like Maersk have signed multiple deals around the world to secure green methanol output from plants under development.

In the event that green methanol production lags demand from shipping, dual-fuel methanol vessels will be able to run on more carbon intensive conventional fuels in the meantime.

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About the Author

Gary Howard

Middle East correspondent

Gary Howard is the Middle East Correspondent for Seatrade Maritime News and has written for Seatrade Cruise, Seatrade Maritime Review and was News Editor at Lloyd’s List. Gary’s maritime career started after catching the shipping bug during a research assignment for the offshore industry. Working out of Seatrade's head office in the UK, he also produces and contributes to conference programmes for Seatrade events including CMA Shipping, Seatrade Maritime Logistics Middle East and Marintec. 

Gary’s favourite topics within the maritime industry are decarbonisation and wind-assisted propulsion; he particularly enjoys reporting from industry events.

Conferences & Webinars

Gary Howard regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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