Broad adoption for methanol as marine fuel a distant possibility: sources

A broad-based usage of methanol as an alternative marine fuel in the European bunkering industry is a distant possibility at best, industry participants said this week on the sidelines of the International Methanol Producers Association conference in Porto, Portugal, over June 12-13.

The main factor driving methanol, alongside LNG as a marine fuel is the lowering of the sulfur limit in emission control areas, as well as the global cap pushing shipowners to move away from residual fuel oil.

Under the UN International Convention for the Prevention of Pollution from Ships (MARPOL), world bunker fuel should contain no more than 3.5% sulfur from 2012 onward, and no more than 0.5% sulfur from 2020 onward. The limits set on sulfur dioxide in emission control areas have been lowered progressively from July 2010 and are set to be lowered further from the current 1% to 0.10% from January 1, 2015.

As shipowners tackle compliance issues with the incoming tougher regulations on emissions, there few options available — switch to cleaner but more expensive marine fuels like gasoil, fit exhaust-gas scrubber systems or invest in new ships that run on alternative fuels or by retrofitting to using LNG or methanol as fuel.

And while some are optimistic about methanol being a potential alternative in the marine fuel industry, little has been done to support the broad-based adoption of the commodity as fuel.

“We are not upbeat on marine fuels,” said a European producer. “There are several pricing issues, the cost of retrofitting the ship, practical and convenient storage of methanol. We would need more storage in the Nordics and nothing is being built. It is debatable if we should invest in the storage but it is not a done deal yet as it is not the only option.”

Thus far, the only company who has invested into developing capabilities to use methanol as a marine fuel is Methanex, the world’s largest producer of the product.

Its fully-owned subsidiary company, Waterfront Shipping, commissioned six dual-fuel vessels to be built by Mitsui O.S.K. Lines, Westfal-Larsen & Co A/S and Marinvest/Skagerack Invest, with an option for building an additional three, slated for completion in early 2016.

The 50,000 dead weight ton vessels will be able to run predominantly on methanol or fuel oil.

A company source from Methanex said on the sidelines of the IMPCA conference that they believe methanol could be a viable option for marine bunking fuel in the longer term as the other alternatives may prove tricky. “Scrubbers have too many complications, like chemical disposal, plus we expect there to be more legislative changes ahead that would mean scrubbers can only comply with for the short-term,” said the source. “Methanol as a marine fuel is not tried and tested yet, but once you see that it works, it would spur further investment in this area.”

Thus far, the current technology would only be able to support a full usage of fuel oil or methanol at any one time, but Methanex is investigating the possibility of creating a flexible percentage-based usage of both.

In 2015, the first passenger ferry, the Stena Germanica, that has been fully converted to run solely on methanol, operated by Sweden’s Stena, is expected to commence operations and will be the first case study to attest to the potential of methanol as marine fuel. If successful, up to 25 of Stena’s passenger ferries will be converted to use methanol as the main fuel by 2018.

LIMITATIONS OF LNG

The main advantage that methanol has over LNG as a marine fuel is the cost. Equipment costs are estimated to be at least 20% less in retrofitting engines for methanol consumption compared with LNG, according to Lloyd’s Register.

One technical issue in using LNG is the problem of methane slip which has been described as a potential penalty toward the green credentials that LNG has and negates any carbon dioxide reduction from using LNG as fuel compared to conventional shipping.

Furthermore, LNG requires cryogenics for bunker storage tanks that would reduce the available cargo space onboard a LNG-fueled ship. Lloyd’s estimated that the onboard storage space for LNG to give similar energy output as conventional fuel would be tripled or even quadrupled.

Lastly, there are quality variations for LNG as a fuel for ships, and the consequences are not yet fully understood.

In a shipowner survey conducted by Lloyd’s in 2013, those polled unanimously said “distillates are the way to go” within the next five years. In other words, gasoil would be the predominant fuel used for shipping come 2015.
Source: Platts