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Methanol leads February alternative fuel vessel orders

Maersk A rendering of a Maersk methanol-fuelled vessel
February 2023 was a strong month for newbuild orders of vessels with alternative fuel systems, with methanol-fuelled vessels outnumbering LNG by two-to-one.

The figures from DNV’s Alternative Fuels Insight (AFI) platform show orders placed in February for 10 LNG-fuelled containerships and a record 22 methanol-fuelled ships.

The rise in methanol-fuelled in February shows an accelerating adoption of methanol for marine use with a total of 106 confirmed methanol-fuelled vessels in operation and on order. This compared to 886 LNG-fuelled ships, according to DNV data. The class society also noted the limited operational experience for methanol-fuelled vessels—mostly from the chemical tanker market—and a need to ramp up production of green methanol.

There are 22 tankers in operation with the ability to run on methanol, plus one Ro-Pax and one tug, but the orderbook is dominated by 68 container ships. Container giant Maersk has adopted methanol as its green fuel of the future with 19 ships on order and green methanol supply deals in place around the globe with nine producers. HMM recently ordered 9 methanol-fuelled boxships.

Martin Wold, Principal Consultant in DNV’s Maritime Advisory business, said: “Interest for methanol has been growing very quickly, and now this is materializing into firm orders. Being a well-established alternative for some time, we see that LNG is still gaining ground.

“We expect continued growth for both fuel options as they have their distinct pros and cons depending on the segment. LNG offers immediate reduction of GHG, even when fossil LNG is used, at the expense of a higher capital investment. Building a methanol fuelled vessel is less expensive, but green methanol will be needed sooner than green LNG and there is currently high uncertainty on future availability and prices."

AFI also tracks vessel with scrubbers installed, the number of which has plateaued in recent years after steep rises in 2018-2020 and the IMO sulphur cap. Scrubber installations jumped from 387 in 2017 to 4,362 in 2020. The figures for 2023 is 5006. Closed loop scrubbers account for just 1% of scrubber installations, with 17% hybrid and 81% open loop systems.

AIS data for battery-powered vessels shows most are clustered in Northern Europe and the Mediterranean. DNV counts 589 battery-powered vessels in operation with a further 208 on order, with most being car and passenger ferries.