US ethanol offers lower GHG abatement costs than methanol, ammonia: study

US corn-based ethanol could offer shipowners a cheaper route to reducing greenhouse gas emissions than low-carbon methanol and ammonia, potentially opening a new marine fuel market for American producers as the global fleet of methanol-capable vessels expands, according to a study released Nov. 12.

Ethanol could abate about 2.09 metric tons of CO2 equivalent for every $1,000 spent on fuel, compared with 1.30 mt for low-carbon methanol and 1.73 mt for low-carbon ammonia, the Maritime Ethanol & Methanol Alliance, an initiative by the nonprofit Global Centre for Green Fuels, said in the study.

MEMA estimated ethanol's well-to-wake greenhouse gas intensity at 34.9 grams of CO2e/megajoule, compared with 15 gCO2e/MJ for low-carbon methanol and 10 gCO2e/MJ for low-carbon ammonia. Emissions abatement was calculated against a heavy fuel oil baseline of 93.3 gCO2e/MJ.

"Ethanol is a commercially viable fuel when compared to other fuels ... [it] delivers maximum carbon abatement per dollar of fuel expenditure among commercially available, scalable marine fuels," according to the study.

In the study, based on classification society ABS's technical analysis, MEMA assumed US corn ethanol prices on a free-on-board Houston basis at $750/mt, equivalent to $1,125/mt of very low sulfur fuel oil on an energy-adjusted basis. That compared with $1,200/mt, or $2,424/mt on a VLSFO-equivalent basis, for low-carbon methanol and $900/mt, or $1,945/mt VLSFOe, for low-carbon ammonia.

VLSFO was assumed at $590/mt. The study's indicative mid-2026 prices showed ethanol remained substantially more expensive than conventional bunkers but offered lower costs than other low-carbon alternatives.

Platts, part of S&P Global Energy, assessed FOB Houston ethanol barge prices at 202.25 cents/gallon on Nov. 11, roughly equivalent to $677/mt. Delivered low-carbon methanol bunker prices in the Houston Ship Channel were $1,146.57/mt on the same day, according to Platts.

US ethanol supply

The US produced 16.4 billion gallons of ethanol in 2025, against an installed capacity of 18.5 billion gallons/year, leaving about 2 billion gallons of spare capacity, according to the study.

US ethanol production capacity could expand to 18 billion-20 billion gallons/year by 2030 and 23 billion-26 billion gallons/year by 2035, supported by efficiency improvements, cellulosic production and new facilities, MEMA said.

The study estimated that capturing 1% of international shipping's fuel consumption with ethanol would require approximately 1 billion gallons annually, while a 5% share would require around 5 billion gallons annually.

Ethanol, which has chemical and combustion properties similar to those of methanol, could generally be used in engines designed to run on methanol. The methanol-fueled fleet is expanding, with 157 vessels in service and more than 160 on order as of October 2026, according to S&P Global Maritime Portal data cited in the report.

"Ethanol is moving beyond pilots, and this study shows the United States has the production base and export infrastructure to supply shipping at scale," Global Centre for Green Fuels Managing Director Clarence Woo said in a statement.

A.P. Moller-Maersk, one of the largest container lines, has been testing ethanol and ethanol-methanol blends in its methanol-capable fleet, progressing from a 10% ethanol blend to E100.

On Sept. 28, the company's 9,000 twenty-foot-equivalent-unit container ship, Tangier Maersk, completed the first commercial ship-to-ship bunkering of US corn ethanol in Houston. Kirby Corp. transported and bunkered the fuel.

Regulatory uncertainty

Regulatory uncertainty remains over the treatment of crop-based ethanol, although the International Maritime Organization has made progress toward recognizing specific production pathways.

In May, the IMO agreed to include Brazilian second-crop corn ethanol in its draft revised lifecycle GHG assessment guidelines. The UN agency is still considering how indirect land-use change should be accounted for in other types of ethanol.

Paula Nava, director of sustainability at Marquis Energy, a US ethanol producer, told Platts that IMO regulators should take fuel availability and existing national standards into consideration when defining sustainability criteria.

"We should have a more flexible approach to what sustainability criteria is about," Nava said.

Under FuelEU Maritime, conventional crop-based ethanol continues to face less favorable regulatory treatment than advanced biofuels.

"The next challenge is consistency," Woo said, calling for standardized marine fuel specifications, traceable feedstocks and robust chain-of-custody systems.

MEMA's members include Bunker Holding, Raizen, Longi and Idemitsu, among other fuel producers, shipowners, ports, engine makers and classification societies.