The Case For Methanol As A Future Fuel

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By Breakwave Advisors

There is an ongoing dilemma successful nan world shipping community: which renewable substance solution holds nan cardinal to nan industry’s greenish future? Focus has centered connected fuels that tin beryllium produced utilizing renewable electricity, known arsenic e-fuels. E-fuels include ammonia, methanol, and hydrogen. Each type of e-fuel has its ain benefits and drawbacks. In nan agelong term, it’s unclear which is amended for nan industry.

Compatibility pinch combustion engines makes e-fuels a applicable way to destruct alloy emissions. Shipping is considered a hard-to-abate assemblage owed to nan immense powerfulness request of ships operating trans-continental waste and acquisition routes. A renewable powerfulness solution for ships will request to beryllium wide disposable adjacent ports worldwide and economically practical. These are not mini hurdles.

Flow floor plan of nan e-fuel worth concatenation from renewable power procreation to use

E-fuel Value Chain Source: Breakwave Advisors

Two starring shipowners person precocious favored methanol, giving it a boost successful attention. French instrumentality statement CMA CGM began placing orders for methanol-powered ships successful June 2022, and has tallied up 18 ships nether construction successful summation to 31 methanol-ready vessels already operating successful its fleet.

CMA CGM is successful bully company. Danish shipowner A.P. Moller-Maersk (OTCPK:AMKBY) has 19 methanol-powered containerships connected order and has taken steps to unafraid renewable methanol offtake agreements.

Maersk needs a sizeable magnitude of methanol for its ships, but renewable methanol accumulation is conscionable opening to return shape, making this a challenge. Maersk has had immoderate success, contracting 130,000 tons of renewable methanol for transportation successful 2023, 700,000 tons successful 2025, and 500,000 tons successful 2026.

Renewable Methanol Production Announcement Growth 2020-2027

Source: Methanol Institute, Bloomberg, 2023.

But why methanol fuel?

Methanex (MEOH), a Canadian institution that produces and distributes methanol, began utilizing methanol arsenic vessel substance successful 2016 demonstrating methanol’s commercialized viability for powering ample cargo ships.

Stena Line, 1 of nan largest ferry operators successful nan world, besides has a way grounds of utilizing methanol. Stena first implemented methanol successful 2015 to powerfulness ferries and was capable to execute a simplification of emissions by utilizing nan fuel. Methanol is presently available successful complete 100 ports.

Methanol is besides already being commercially produced utilizing renewable energy but successful mini quantities. Carbon Recycling International (CRI), a backstage Icelandic institution that uses geothermal powerfulness to nutrient renewable methanol, first began accumulation successful 2012. Since then, CRI has received much than 180 inquiries from stakeholders interested successful renewable methanol. The institution says it is prepared to deploy its exertion “en masse.”

Even pinch a proof-of-concept, location are still awesome challenges. Obtaining an capable proviso of renewable electricity, processing accumulation infrastructure astatine scale, and solidifying a distribution web are important undertakings. But researchers are already processing technologies that will resoluteness these issues.

ETFMG Breakwave Sea Decarbonization Tech ETF (BSEA) provides vulnerability to galore of nan companies progressive successful making methanol a viable substance for nan shipping industry, including Aker Horizons (Norway) (OTCPK:AKHOF), Alfa Laval (Sweden) (OTCPK:ALFVF), GTT (France) (OTCPK:GZPZF), Methanex (Canada), OCI (Netherlands) (OTC:OCINF), Orsted (Denmark) (OTCPK:DNNGY), Royal Vopak (Netherlands), Technip Energies (France) (OTCPK:THNPY) and Wartsila (Finland) (OTCPK:WRTBF).

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