Six companies partner to develop Japan's first methanol-fueled domestic tanker

Six companies have formed a strategic alliance to develop Japan's first methanol-fueled domestic tanker, as part of their target to reduce greenhouse gas emissions in shipping.

The development project is being undertaken by Mitsui O.S.K. Lines, Ltd., MOL Coastal Shipping, Ltd., Tabuchi Kaiun Co., Ltd., Niihama Kaiun Co., Ltd., Murakami Hide Shipbuilding Co., Ltd., and The Hanshin Diesel Works,Ltd., the companies said in a joint statement March 11.

Methanol as a marine fuel is getting more widely introduced on ocean-going vessels as an environmentally friendly fuel, including four MOL Group-operated ships, but this will be the first methanol-fueled domestic ship.

The vessel development project, which targets delivery of the ship in 2024, has been selected to receive public funding through the Japanese Ministry of Economy, Trade and Industry and Ministry of Land, Infrastructure, Transport and Tourism.

Methanol promising bunker fuel

Methanol can reduce emissions of sulfur oxide by up to 99%, particulate matter by up to 95%, nitrogen oxide by up to 80%, and carbon dioxide by up to 15%, compared to vessels using conventional fuel oil, which is currently the main fuel for marine vessels, the statement said.

Methanol also has outstanding properties for use as a fuel, as it is liquid at normal temperatures and normal air pressure. In addition, methanol can be produced with CO2 and hydrogen as raw material, so in the future, it can be produced by utilizing the CO2 capture and transport business to synthesize hydrogen, which uses electricity derived from renewable resources such as offshore wind power and wave power, the companies added.

The International Maritime Organization's global low sulfur mandate led to 436 product tankers being fitted with scrubbers in the current fleet, equivalent to 4.9% of all product tankers, S&P Global Commodity Insights said in a report on March 3.

The focus now has shifted to which alternative fuel can meet the CO2 targets, it said, adding that product tankers have a diverse picture with owners investing in methanol, LNG, and a few with battery propulsion.

"Our base case 2030 fleet model forecasts that 440 LNG dual fuel vessel are delivered compared with 79 methanol fueled vessels along with a handful of other alternative fuels totally 535 new fleet additions," it said.

According to some industry sources, while methanol comes with numerous benefits, its use for bunkering also poses some hurdles.

Several more terminals will be required if methanol is to be used in marine vessels and even though the methanol trade is fairly well-evolved, its many uses and demand for manufacturing may not allow surplus for maritime use without incentives, some sources have said.

But steps are being taken to tackle these hurdles, with the latest move coming from A.P. Moller-Maersk, which has inked a strategic partnerships with six companies to scale green methanol production by 2025.

"To transition towards decarbonization, we need a significant and timely acceleration in the production of green fuels. Green methanol is the only market-ready and scalable available solution today for shipping," Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands, A.P. Moller-Maersk, said in a statement March 10.

"Production must be increased through collaboration across the ecosystem and around the world," Thygesen said.

As part of Maersk's agreement, it seeks to source at least 730,000 mt/year of the fuel by end of 2025.