Questions remain about the historic success or failure of ground-breaking investment to retrofit a ferry to burn methanol as a fuel six years ago.

In 2015, Swedish ferry giant committed to a $22m retrofit of the 1,300-passenger ferry Stena Stena Germanica (built 2001) to enable it to burn the lower carbon fuel.

However, with the regulatory landscape still not fixed, it remains unclear whether it is a ground-breaking model or a blind alley, one of the company’s senior executives has admitted.

Claes Berglund, Stena’s director of public affairs and sustainability, was discussing the challenges of being a first mover with new low carbon solutions before the long-term regulatory landscape was settled.

“It’s a question of whether it’s the first mover or Betamax,” he said, referring to the video technology format which lost out to VHS in the 1980s despite being technically superior and more compact.

Long-term view

“You need to have a long-term perspective to de-risk the investment.”

The Stena Germanica, which was built at Spain’s IZAR yard in 2001, was retrofitted in a project half-funded by the European Union as the first major ferry to use the fuel.

In June, Stena said it has achieved the world's first ship bunkering using recycled methanol, when the Stena Germanica made a voyage from Gothenburg to Kiel with fuel from captured residual gases from steel-making.

And last month, Maersk upped interest in methanol as a fuel to help accelerate decarbonisation with the first major series order of ships designed for its use.

The world’s biggest container shipping company ordered up to 12 16,000-teu vessels from Hyundai Heavy Industries for delivery from the first quarter of 2024.

The 1,300-passenger Stena Germanica (built 2001) was retrofitted to use methanol as a fuel in 2015. Photo: Stena Line

Berglund, who is also the President of the European Community Shipowners Association, was speaking at the London International Shipping Week conference as part of a discussion about how to industry and governments can share the risk of decarbonisation with a clear and trusted regulatory roadmap.

Greek shipowner Markos Lyras, chief executive officer of Lyras Maritime, said owners faced the risk that ships ordered today may be obsolete by the time they are delivered in two or three years time.

Competitive price

“I’m yet to see a carbon free ship design at a competitive price [from a shipyard],” he added.

Nicholas Brown, chief executive officer of Lloyd’s Register, reassured Lyras that “in the next two years” there will be designs available. However, whether they would be competitive on price was a more difficult question, he conceded.

Aoife O’Leary, shipping and carbon pricing director at the Environmental Defense Fund, welcomed the forthcoming debate at IMO on imposing a realistic carbon price.

She was encouraged that the proposal by the Marshall Islands government for a $100 per tonne carbon tax was gaining support.

Jan Dieleman, president of Cargill Ocean Transportation, said there needs to be a price on pollution.

“We need to look at decarbonising the supply chain and not just the asset [ship]. There are lot of low-hanging fruit yet to be picked,” he added.