Methanol bunkering to aid shipping's decarbonization ambitions: industry experts

Singapore — Methanol bunkering is set to receive a boost in the near future as maritime decarbonization becomes a focal point for shipping after a fairly smooth transition to the International Maritime Organization's global low sulfur mandate, industry experts told S&P Global Platts.

"As we get towards the end of the decade, alternative fuels will take a center-stage, with their share set to rise at the expense of low sulfur fuel oils and gasoil," Douglas Raitt, regional advisory services manager Asia at Lloyd's Register, said.

Among the alternative fuels, LNG as a marine fuel became a push point towards 2013 because of the IMO 2020 sulfur limit rule, Raitt said.

However, the discussion has now pivoted to decarbonization, with methanol potentially set to play a bigger role, Raitt said.

The latest launch of a bunkering technical reference document that outlines the procedures required for safe bunkering of methanol and incorporates dedicated checklists to assist industry stakeholders is a step in that direction, he said.

"We are trying to plug a knowledge gap through this document. So it is an enabler and a facilitator," Methanol Institute COO Chris Chatterton said.

Meanwhile, the International Organization for Standardization is also currently engaged in developing a standard for methanol as a marine fuel, due to be finalized in Q1 2021, heralding another positive sign for its long-term prospects, Chatterton said.

Currently, around 24 vessels globally are able to use methanol as a bunker fuel, including vessels in operation and on order, Platts reported recently.

Methanol push

Conventional methanol as a marine fuel leads to a reduction in CO2 of over 15%, nitrogen oxides of between 30%-50%, particulate matter of 90% and sulfur oxides of 90%-97%, when compared to heavy fuel oil, industry sources said, adding that methanol pricing is relatively predictable and tends to trade within a narrower range than other fuels.

Going forward, when simply blended with either renewable or bio-methanol, GHGs can be further mitigated. This is particularly important as IMO's GHG emission cut targets loom.

Methanol is abundantly available and the infrastructure around it is fairly well developed, Chatterton said.

Retrofitting vessels with methanol dual fueled engines is also fairly easy, Chatterton added.

Moreover, methanol has other advantages, Raitt said. It is produced at such a high purity that much fewer inspections are required around its quality as a bunker fuel, Raitt said.

Methanol is a clear liquid chemical that is water soluble and readily biodegradable. So, there is effectively zero cleanup required in the event of a spill or salvage operation, Raitt added. In fact, methanol is readily blended with water generated on board existing dual fuel vessels to meet Tier III compliance, he said.

Asia to embrace methanol bunkering

"Every country is at a different level, with different resources, readiness and strategies as far as bunkering of cleaner fuels is concerned," Chatterton said.

In July, the Methanol Institute said it had joined a study led by the China Waterborne Transportation Research Institute, the think tank of the Chinese Ministry of Transport to consider the technical and operational requirements for methanol bunkering.

In India, the Institute, along with other partners, is exploring methanol bunkering prospects for inland waterways as well as for the automotive sector, Chatterton said.

Meanwhile, Singapore, the world's largest bunkering port, is also at the helm of promoting cleaner alternative marine fuels such as LNG and even methanol.

The Methanol Institute is backing a project at the Nanyang Technological University of Singapore to evaluate methanol as a marine fuel, and the first phase of the two stage-project included studying a similar vessel with a methanol-powered engine in the GreenPilot program in Gothenburg, Sweden, Chatterton said.

"We look to bring that forward," Chatterton said, adding that the Institute is also working with several shipyards in Asia on standardized designs to pave the way for more methanol fueled ships of all types.

COVID-19, bunker market outlook

The COVID-19 situation is a "temporary disruption" as far as advancing cleaner fuels such as methanol and ammonia are concerned, Raitt said.

As far as overall bunker fuel demand is concerned, COVID-19 has had varying impacts on different ports worldwide, Raitt said. However, Singapore has stayed fairly resilient in this regard.

Also, as far as transitioning to IMO 2020, "we've done incredibly well," Raitt said.

So far this year, among all the samples tested by Lloyd's Register, only 4% of VLSFO and 1.7% of MGO's has been off-spec, Raitt said. This is lower compared to the same period in the preceding year, he added.

Shipping should be greatly encouraged by this achievement as it gets ready to leap towards lower and zero carbon fuels, Raitt added.