[C Tech Now] Clean Methanol Instead of Fossil Fuels, Leading Carbon Neutrality in Shipping

Easy to Handle and No Marine Pollution
Major Shipping Companies Expand Methanol Ship Orders
Global Demand Expected to Reach 500 Million Tons by 2050

Methanol-powered ship 'Ane Mærsk' built by HD Hyundai Heavy Industries. Photo by HD Hyundai Heavy Industries

Maersk, the world's largest shipping company based in Denmark, signed a long-term supply contract for bio-methanol with Chinese renewable energy company LONGi Green Energy Technology on the 30th of last month. LONGi plans to produce bio-methanol at its production facility in Xuchang, Henan Province, central China, and supply it to Maersk from 2026 to 2030. Maersk expects to receive about 50% of the methanol needed for its dual-fuel vessels by 2027 through this contract.

Maersk has announced its goal to achieve carbon neutrality by 2040. Dual-fuel propulsion vessels that use both methanol and liquefied natural gas (LNG) are one of the key means for Maersk to achieve this goal. Maersk explains that using methanol can reduce greenhouse gas emissions by about 65% compared to conventional fossil fuels. Currently, Maersk operates seven methanol dual-fuel vessels.

There was once speculation in the shipping industry that Maersk would reduce orders for methanol vessels. However, on this day, Maersk emphasized its continued support for methanol as a carbon-neutral solution, stating that "bio and e-methanol are becoming the most promising alternative energies for the next decade." The message from Maersk, the world's number one shipping company, is clear: "We need more methanol, so countries should produce more methanol at lower costs."

"Easy to transport and biodegradable even at sea"

The efforts of global shipping companies to achieve carbon neutrality are urgent. They have become busier since the International Maritime Organization (IMO) set a very tight timetable. At the 80th Marine Environment Protection Committee meeting held in July 2023, the IMO adopted the '2023 Greenhouse Gas Reduction Strategy' aiming for 'carbon neutrality in international shipping by 2050.' This is an upgrade from the previous goal of reducing greenhouse gas emissions by 50% compared to 2008 levels by 2050. The target is to reduce emissions by at least 20% by 2030, at least 70% by 2040, and achieve net-zero emissions around 2050.

The carbon emissions from the shipping industry sector amount to about 1 billion tons, accounting for 2.8% of global emissions. The fuels supplied to ships are mainly heavy fuel oil, diesel, and gas oil. The shipping industry faces the challenge of switching these to low-carbon or zero-carbon technologies or fuels. The alternative fuels proposed by the shipping industry include LNG, bio/e-methanol, hydrogen, and ammonia.

Methanol is attracting attention as the most realistic alternative among candidate fuels. Methanol has several advantages compared to competing fuels. First, it has a boiling point of 64.7°C and a freezing point of -97.6°C, maintaining a liquid state at room temperature and normal atmospheric pressure. It is easier to transport and handle than liquefied natural gas (-162°C), hydrogen (-253°C), or ammonia (-33°C), which have lower liquefaction points.

Ammonia is also difficult to handle due to its toxicity and corrosiveness, which is another advantage for methanol. For this reason, seafarers are known to prefer methanol vessels over ammonia vessels. Methanol also has the advantage of dissolving or biodegrading in seawater, so it does not cause marine pollution. Additionally, methanol can reduce sulfur oxides (SOx), nitrogen oxides (NOx), and particulate matter by up to 99%, 80%, and 95%, respectively, compared to conventional ship fuels, making it environmentally friendly.

The greenhouse gas emissions of methanol can vary depending on the calculation method. The Tank to Wake method, which calculates emissions only from the stage where fuel is stored in tanks of vehicles, ships, or aircraft and then combusted to generate energy, shows a 12% reduction in greenhouse gases. In contrast, the Well to Wake method, which calculates emissions from all stages including extraction, production, transportation, and combustion of the fuel throughout its entire lifecycle, shows a 98% reduction effect. This means that while the reduction effect during combustion alone is small, considering all stages from production to combustion results in a significant reduction effect.

Accordingly, global shipping companies and shipowners are increasing orders for methanol vessels as a key means to achieve carbon reduction targets. According to Bloomberg New Energy Finance (NEF), as of July 2023, Maersk had ordered 25 green methanol vessels. Taiwan's Evergreen ordered 24 vessels, China's COSCO and France's CMA CGM each ordered 12 vessels, and South Korea's HMM ordered 9 vessels.

Does methanol have colors?

Methanol (CH3OH) is produced from carbon monoxide (CO), carbon dioxide (CO2), and hydrogen (H2) and is colorless. However, depending on the production method, it is classified into gray methanol, brown methanol, bio-methanol, and e-methanol. Brown methanol is produced by gasifying coal, gray methanol is produced by reforming natural gas, and when carbon dioxide emitted during natural gas reforming is captured, it is called blue methanol. Clean methanol is a concept that includes bio-methanol produced from biomass or biogas, e-methanol synthesized from green hydrogen and carbon dioxide, and blue methanol.

Until now, methanol has mainly been produced based on fossil fuels. About 70% of the produced methanol is used in the petrochemical industry, and the remaining 30% is used as fuel. Methanol is used as a raw material for olefins, formaldehyde, methyl chloride, methylamine, and others. As a fuel, methanol is currently used in methyl tert-butyl ether (MTBE), gasoline blending, biodiesel, and dimethyl ether (DME). Many countries allow methanol blending in gasoline (3-5%), and in China, 100% methanol vehicles are also in operation.

The largest market for methanol demand is China, accounting for about 55 million tons as of 2018. South Korea's demand was about 2 million tons in 2022, mostly imported. As demand for methanol as fuel for ships, automobiles, and others increases, the methanol market is expected to expand significantly.

The International Renewable Energy Agency (IRENA) forecasts that the methanol market will increase fivefold from 100 million tons in 2020 to 500 million tons by 2050. Among this, e-methanol is expected to account for 250 million tons, half of the total, and bio-methanol is expected to account for 135 million tons. Brown methanol and gray methanol are expected to gradually decrease in share according to carbon regulations in various countries.