Andrea Lazzaro, Head of business development at WinGD. Image Credit: WinGD

The entry of ethanol into the marine energy mix could be a 'game-changer' that provides a lower-cost way of driving forward shipping's energy transition, according to engine designer WinGD.

After methanol at the start of 2024 made headlines for surpassing LNG as the most popular alternative fuel of choice, 2025 subsequently recorded a significant slowdown in orders of vessels capable of running on alternative fuels.

This was driven in part by shakier prospects for the global economy and by the IMO's delay to vote on its net-zero framework. Classification society DNV noted a total of 275 alternative-capable vessel orders for 2025 as a whole, down by 47% from the 534 orders in 2024.

Andrea Lazzaro, Head of business development at WinGD, recently joined Ship & Bunker for a wide-ranging interview on an engine designer’s perspective on the alternative fuels landscape in 2026.

Both supply and price considerations for some alternative fuels have been a key concern for shipowners becoming hesitant in this area, Lazzaro said.

"The reasons are multiple; in 2024 there was a realisation that the green methanol was extremely expensive and very difficult to find, and that dampened the enthusiasm a little bit," he said.

"In 2025 this effect was compounded by the IMO delay in the decisions because of the changed global political landscape and different priorities set by individual countries.

"That resulted basically in a double effect. On one side, you can't find the fuel and if you can find it, it's going to be extremely expensive. Lacking any IMO decisions regarding the incentives and the penalty plans necessary to facilitate the transition, the business case for ship owners to operate on “new” alternative fuels has suddenly become quite difficult"

Ethanol to the Rescue?

Ethanol is increasingly being discussed in the shipping and bunker industries as a potential new candidate to join the marine energy mix.

Its chemical similarities to methanol - the two fuels can be stored in the same tanks and be blended together in any ratio - make it a compatible partner to methanol as a marine fuel, using the same engines and infrastructure. Supply is already ample - reaching 31 billion gallons worldwide in 2024 - and falling demand from road transport fuel blends as more electric vehicles are used means producers are keen to find new outlets for their product.

"Ethanol should be considered as one of the necessary building blocks to get us to the final goal of net zero in the marine industry by 2050," Lazzaro said.

"Last year we officially approved the use of ethanol as a fuel in our X/EDF-M/E methanol engine family, in recognition of the fact that the alcohols are quite similar.

"Of course there will have to be testing done to validate emissions, for which we have a high level of confidence, and after that it will be possible to run on methanol or ethanol, indifferently.

"That will open up the market much more quickly, because today there is already a supply of ethanol, with certain regions of the world actually having surplus production that could be redirected to the marine industry. Producers also indicate that further scaling up of sustainable ethanol production is possible, potentially increasing the amount available for marine use in the coming years."

Its low price, currently in the range of $600s/mt in the US, makes it an attractive option as a means of cutting shipping's GHG emissions immediately without need for any new infrastructure.

"There is a possibility for this fuel to enter the market, as its final “price at the pump” is expected to be a fraction of the price of green methanol," Lazzaro said.

"Vessel operators can start their decarbonisation journey by adding small amounts of ethanol in the fleet's yearly fuel usage to meet intermediate targets without breaking the bank, and I think that is a very compelling argument."

WinGD is already seeing significant interest from shipowners in the use of ethanol blended with methanol.

Indeed, container line Maersk last year trialled 10% ethanol blended with methanol on one of its boxships in October, before moving the blend ratio up to 50/50 in December and expressing interest in trying out 100% ethanol.

"In Singapore, we had direct enquiries during a webinar from shipowners talking about ethanol-methanol capabilities," Lazzaro said.

"Can the engine run on ethanol, can we mix ethanol and methanol; these questions are coming frequently, and in the last six months there has been a lot of interest in the methanol-ethanol capability."

Regulatory Barriers

One of the key reasons ethanol has not been prominently discussed as a decarbonisation solution for shipping in the past has been the regulatory barriers to its use.

Ethanol is typically produced from corn or sugarcane, and the use of crop-based biofuels as green fuels is prohibited under EU regulations over concerns about sustainability and competition between energy and food production.

Lazzaro argues these concerns are outdated, with current production methods delivering much more sustainable results than those assumed by the regulations.

"The modern way that ethanol is produced is completely sustainable," he said.

"According to the data provided by some ethanol producers in the USA, productivity has increased 180% over the past 20 years or so, so they're able to produce a lot more ethanol with the same amount of acreage, without expanding usage of lands, and also using marginalised and distressed lands which are generally not suitable for producing food. Also, nothing is wasted during the production of ethanol, with the residual dry mass being sold as high protein animal feed. These arguments should help to gain acceptance of ethanol as a sustainable fuel under a broader set of criteria at regulatory level”.

"So we are confident that eventually logic and reason will prevail, and at the very least, a case-by-case analysis to verify the suitability of each ethanol production should be done in order to enable it as a fuel that will allow the transition to decarbonise from the shipping industry to start.

"Unless a pragmatic approach is accepted at regulatory level, the path to decarbonization of the marine sector is not going to happen in the expected timeline."

Methanol

WinGD believes the introduction of ethanol into blends with methanol will help revive interest in methanol-fuelled ships as costs can be lowered.

Demand has been slow to emerge, but future demand is starting to build. Ship & Bunker's Global Orderbook Bunker Demand report shows 400,000 MTOE/year of methanol bunker demand was added to the global orderbook between April 2025 and January 2026.

"With the methanol engines, there was a peak of orders in 2023, and then a good order inflow between 2024 followed by a slight decline in 2025, but these are all ships that - even with the earliest orders from 2023 - will be barely hitting the waves yet," Lazzaro said.

"In 2026 because of the saturation of global shipyards and engine builders capacity, , two to three years is a minimum to expect for ship delivery.

"I think now we will see a lot of increased demand for green methanol, because a lot of that ordered capacity is coming online.

"But I know customers that have spoken to me quite openly and have told me that at green methanol prices peaking at $2,500 per tonne, I can't have any business, and even if I wanted to pay that $2,500, I can't find enough methanol for my fleet.

"That puts a bit of a damper on the expectations and the enthusiasm.

"But ethanol can really be the game-changer there, because it's cheaper and it's available, if they let us use it."

Ammonia

When it comes to ammonia as an alternative bunker fuel, little activity has yet been registered. At least one supply agreement has been made between a green ammonia fuel supplier and an operator of ammonia-fuelled vessels powered by WinGD’s X-DF-A engines. But evidence of further scaling to meet the industry’s future demand is limited.

WinGD argues this market is stuck in the same chicken-and-egg scenario that was a problem for the LNG bunker industry 10-15 years ago.

"Green ammonia requires an incredibly complex infrastructure; you need to have literally fields of solar panels or renewable energy of any other kind available on tap, dedicated to the plant" Lazzaro said.

"Also, you need to have the electrolysers.

"You need an enormous capital investment, and you need to wait several years before this investment actually comes online and starts generating revenue.

"The shipping industry is also still holding back, waiting for the IMO decisions, waiting to see which fuels are going to be available quicker, and at which prices.

"It's Catch-22; you don't build supply because there is no demand, and demand doesn't build because there is no supply."

But just as ethanol has the potential to break this dynamic for the methanol market, Lazzaro believes a similar solution can be found for ammonia.

"For the ammonia world, what could break this vicious cycle is blue ammonia," he said. "Under certain specific circumstances, blue ammonia could support demand and allow for the growth of the green ammonia infrastructure over the next several years.

"I've been talking to a lot of companies over the last year and a half; on the global commodities market blue ammonia is already a lot cheaper than green ammonia today, it could be around $500 per tonne.

"With blue ammonia, in a very simplified way you crack the methane and you capture and sequester while capturing and storing the carbon (CO2) underground, and then you use the hydrogen that's been produced to combine with nitrogen and make the ammonia molecule.

"At that point, that so-called blue ammonia can deliver significant GHG emission reductions for the transition phase, and has the potential to be cheaper and more readily available in large quantities than green ammonia, at least in the short and medium term.

"Once some steady supply comes to the market orders for ammonia-powered vessels will also increase. Eventually this could generate a flywheel effect enabling green ammonia projects to find the required funding for development, as the growing ammonia demand as marine fuel will justify the investment.

"I'm confident that ammonia as a marine fuel is coming; it will have its time."

LNG

WinGD also expects to see growing demand for LNG-fuelled ships, particularly as the ramp-up in supply of biomethane adds to its decarbonisation potential.

Over the past year within LNG the company's focus has been on LNG carriers, but this year it is introducing a new engine design particularly suited to large container ships.

Within the LNG market the demand is primarily for ships capable of running on gas from the point of delivery, rather than those with an LNG-ready notation marking them as suitable for retrofit at a later date, Lazzaro said.

"For LNG, there's not so much interest in -ready; there's actually interest in ordering dual-fuel engines capable of running on LNG , because LNG is widely available and has been an established marine fuel for more than a decade" he said.

"Also in recent months there has been a lot of talk about bio-LNG.

"There were statements from energy companies showing availability of up to 200 million tonnes per year of bio-LNG by maybe 2030-35; while these volumes cannot be confirmed at this time, nor will they all go to the marine industry, they will contribute significantly to lowering the GHG intensity of LNG vessels emissions.

"A lot of people are now thinking towards LNG as a long-term transition fuel, because if you start blending increasing quantities of bio-LNG, you can reduce your carbon intensity and keep up with the growingly stringent intermediate emissions limits over the years leading to 2050.

"And then eventually, in a perfect world in which there could be enough bio-LNG available, maybe 20 years down the line, owners could bunker up to 100% bio-LNG, thus making this a permanent solution to meet net-zero requirements"

Smaller Ships Wary of Alternative Fuels

While the market for large container ships capable of running on alternative fuels has been strong, WinGD has seen much less interest from smaller vessel types.

"On the smaller ships, talking about mid-range tankers, smaller tankers, product tankers, feeder containers and bulk carriers, you'll be surprised but last year it was 96-97% diesel engines," Lazzaro said.

"In those segments there has been absolutely no movement towards any form of alternative fuels, except for some early adopters.

"Car carriers tend to be alternative fuelled already for several years, but everything else generally isn't.

"At some point these segments need to start moving towards alternative fuels, because otherwise, sooner or later most of these fleets will be non-compliant.

"It's anybody's guess in which direction they will go; there have been some tentative explorations into ammonia, into methanol, into LNG by different owners with specific needs and access to specific fuel supplies, but nothing systematic.

"We are fully open to all three possibilities at this point."

No Preaching

In these segments where decarbonisation has been less high on the agenda, WinGD does not see its role as being to push its customers into choosing green fuel options.

"The first rule is the customer is always right," Lazzaro said.

"If a customer is telling us, 'I want to run diesel for the next 10 years because I can't find anything else', then we cannot try to preach to them about the benefits of ammonia."

But WinGD says it is able to provide some guidance over which alternative fuels may be most suitable for their business model.

"The customer tells us that they want to retrofit an engine that they already have in service to a future fuel in at the next dry dock, maybe in four or five years time, " Lazzaro said.

"We are able to provide them with detailed, analytical scenario analyses to review all the variables that determine their business case, including the potential cost of different fuels, the potential cost of carbon penalties and the potential incentives.

"We work to create a matrix, or a map, where the customer, based on their individual operational profile, can see,the cost of their fuel, the potential IMO penalties and incentives, to then clearly understand the potential payback time and make a fully informed decision about their retrofit plan.

"Based on this, the customer can make a comparison to be able to decide to go ahead with retrofits or to opt for a new build.