The Week in Alt Fuels: E-methanol's pricey reality

Bunkering a dual-fuel methanol ship with e-methanol for a voyage between the US and Japan can be up to 10 times more expensive than VLSFO.

MAP: Shipping route between New Orleans and Tokyo via the Panama Canal. ENGINE

The $/mt price of delivered e-methanol in the US is 3-4 times more than VLSFO on an energy-equivalent basis, according to a study by the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping (MMMCZCS) and RMI, formerly known as the Rocky Mountain Institute.

The significantly higher price of e-methanol is mainly due to the high cost of green hydrogen and CO2 feedstocks.

MMMCZCS and RMI’s study calculated that a bulk carrier would consume around 1,400 mt of e-methanol on a one-way voyage from Louisiana to Tokyo via the Panama Canal.

Based on these findings, ENGINE's comparison of the total cost of bunkering e-methanol versus VLSFO reveals a hefty price tag for shipowners looking to bunker pure e-methanol at current prices, without policy incentives.

The same ship would only need 560 mt of VLSFO for the trip from Louisiana to Tokyo, since VLSFO's energy density is about 2.5 times higher than that of methanol.

VLSFO-equivalent e-methanol will cost up to $2,100/mt in New Orleans, assuming e-methanol is 3-4 times more expensive than conventional VLSFO. ENGINE’s VLSFO price was $541/mt in New Orleans on 22 October.

As a result, bunkering a vessel with e-methanol (1,400 mt) at New Orleans will cost up to $3 million for a single voyage to Tokyo. In comparison, bunkering the same vessel with 100% VLSFO (560 mt) at New Orleans will only cost about $300,000.

This shows that although the cost of delivered e-methanol is 3-4 times higher than VLSFO, methanol’s energy content is lower and ships need to consume more of it, so the overall bunkering cost for e-methanol can be 10 times that of VLSFO.

Both IMO and regional regulations will be crucial to bridging this cost gap.

For instance, the IMO's upcoming mid-term measures could establish goal-based targets to reduce fuel GHG intensity and penalise GHG emissions. This can encourage more shipowners to shift to cleaner fuels.

Regional policies can boost both supply and demand. Penalising shipping's GHG emissions can spur the demand for cleaner bunker fuels and tax incentives can stimulate production of low- and zero-emission fuels and technologies.

In other news this week, Dutch shipping firm Amasus will retrofit a vessel with a suction sail next year. It will be installed by Bound4blue, a Spanish maker of wind-assisted propulsion systems.

And classification society ABS has completed a safety evaluation of ammonia dispersion onboard an ammonia-fuelled LNG carrier designed by Hanwha Ocean. The study confirmed that the system met ABS rules for ammonia toxicity and gas accumulation risks. The findings will aid Hanwha Ocean in improving ventilation, vent mast placement, gas release speeds and air intake locations, to minimise risks during the design stage.

By Konica Bhatt

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