The Stena Germanica was a little ahead of its time.

When the 1,300-berth, 2001-built ferry was retrofitted to use methanol as a fuel in 2015, Stena Line was looking to comply with emission control area rules, not trying to find ways to slash carbon at the behest of the International Maritime Organization.

The company still settled on IMO 2030-compliant methanol, after running one of its four engines on the fuel.

“Methanol is a cleaner fuel with a similar profile to LNG, but is a liquid, and a conversion of an existing ship is a bit less complicated,” says Stena Line head of sustainability Erik Lewenhaupt. “Even so, it was a huge project, as no one had done it before.”

Almost six years later, Lewenhaupt says the fuel has become an “integral part of daily operations” for the ferry, which runs between Sweden and Germany, and has the potential to become an example for the rest of the industry.

“[Others were] probably somewhat sceptical a few years ago, but I think it makes more sense to many operators now,” he says. “We have a ship that can run on fossil-free fuel today, so it can be done. But there are still many challenges ahead for us as a company and as an industry.”

Erik Lewenhaupt. Photo: Patrik Olsson

With fewer CO2 emissions than conventional fuel and lower levels of NOx and particulate matter, methanol makes a good case for being a fuel of the future as shipowners look for ways to slash carbon intensity from their fleets by 40% by 2030.

It is similar to conventional fuels operationally, is already shipped globally and has gone through the IMO regulatory process.

“It’s a very clean product throughout,” Methanol Institute chief operating officer Christopher Chatterton tells TW+. “Even though the future will probably see a number of different fuels come to market, they have to overcome challenges: regulatory, availability and even the production of the fuel itself to get there.

“There aren’t many fuels which are in the same position as methanol. Not even LNG.”

Despite all that, methanol seems the least popular potential option for shipping.

In a report published this year, law firm Watson Farley & Williams polled shipowners and operators on which alternatives they were considering within the next five years and 10 years.

LNG and LPG were the most popular, followed by biofuels, electric power and even solar.

Methanol was the least popular option within the next five years and second-last within a decade — ahead of only conventional fuel.

In a white paper published in February, class society ABS projected that methanol would not power more than 10% of the global fleet by 2050. Ammonia and hydrogen are expected to grow to power as much as 35%.

+ point

Methanol’s greatest rival is ammonia when both go through the electrolysis process using renewable energy-sourced electricity to create a green version. Given ammonia’s high toxicity, safety issues and the risk of ammonia slip causing emissions of greenhouse gas nitrous oxide, plus methanol’s greater similarity to conventional fuels, why is ammonia preferred?

The answer, according to the US Carbon Neutral Consulting group, which advocates the use of ammonia, is that methanol’s price per gigajoule is higher. Methanol was pricing at $350-$500 per tonne in early 2021, with geographic variations, while ammonia as fertiliser was $300-$350.

Methanol is “good enough to get us to 2030”, says Sotirios Mamalis of ABS’ Global Sustainability Group. “[It] is probably not sufficient to take us to 2050.”

Beyond the challenges surrounding all alternative fuels, such as availability for bunkering and retrofitting propulsion systems, he says the big problem at the moment is that methanol is currently produced from fossil fuels.

Less than 1m tonnes of the 98m tonnes of methanol produced each year is made in a renewable way, according to the International Renewable Energy Agency. The rest uses LNG, coal or other fossil fuels as a feedstock, making it as carbon-intensive as some of its competitors.

But if methanol is produced from biomass, sewage or agricultural waste, or with captured carbon or through electrolysis, it can be compliant with the IMO’s 2050 guidelines to halve emissions against a 2008 baseline.

Mamalis says renewable methanol is “technically feasible” but probably only on a small scale. “For bunkering the deepsea fleet or even the shortsea fleet, you’d need significantly higher amounts of methanol produced,” he says.

Chatterton disagrees.

He says a “world-class scale bio-refinery” could produce 250,000 tonnes of renewable methanol per year. One refinery is already there and another will be along soon, he adds, with more than 20 refineries at various stages of planning.

Incentivising owners and operators

Retrofitting the Stena Germanica to run on methanol. Photo: Stena Line

“If you took all that aggregate fuel, it would already be enough to supply all the current dual-fuel methanol vessels in service today. We know based on this experience that methanol can be produced competitively from many different forms of biomass and using carbon capture. We’re quite adept at integrating this technology as well,” Chatterton says.

Electrolysis, which produces what is called e-methanol, can be scaled up to produce renewable methanol as well.

“We don’t see it as a hurdle per se. There’s probably a greater challenge to get the right policy in place and incentivise the shipowners and operators to begin to adopt these cleaner fuels, all of which are going to be more expensive,” Chatterton says. “It’s a challenge to them to begin to integrate these fuels.”

Despite the drawbacks, Mamalis expects more interest in methanol after AP Moller-Maersk’s decision to build a methanol-fuelled feedership.

The boxship giant said in February that it would launch the carbon-neutral vessel by 2023 in what it intends to be a pilot programme for carbon-neutral fuels.

It would join the Stena Germanica, Waterfront Shipping’s 11-ship methanol carrier fleet and Stena Bulk dual-fuel methanol tanker newbuildings in running on the fuel.

In addition, Stena Line is exploring “blue methanol”, made using carbon capture. It would use the emissions from steel production.

“It’s a large commodity and a liquid fuel with a good environmental profile for [NOx], sulphur and particles,” Lewenhaupt says.

“Somewhere in the intersection of safety, carbon footprint, volume and price we will find the fuels of the future. I think methanol has a very good position in that context. But the focus now and going forward will be on renewable and e-methanol and how competitive that production can be.”