Rapidly Expanding Green Methanol Supply May Still Struggle to Meet Marine Demand

AP Moller-Maersk has said it it likely to need 6 million mt/year of green methanol by 2030. Image Credit: Ulsan Port Authority

Industry body the Methanol Institute has put out new research this week highlighting the rapid pace of green methanol supply expansion, but this growth may still struggle to match the shipping industry's increasing demand for the alternative fuel.

Research from GENA Solutions Oy on behalf of the Methanol Institute shows there are currently 131 biomethanol and e-methanol production projects globally, the industry body said in a press release.

Total green methanol output capacity is projected to reach 19.5 million mt/year by 2028, according to the report.

"We are witnessing remarkable growth in renewable and low-emission methanol capacities, with around 6.5 Mt already in operational, construction, or engineering stages," Vitalii Protasov, CEO of GENA, said in the statement.

"This supply surge is poised to meet the increasing demand for renewable methanol and contribute to the decarbonization of methanol and related industries."

But much of this output will be absorbed by the shipping industry's current projected demand. AP Moller-Maersk has said it it likely to need 6 million mt/year of green methanol by 2030, and CMA CGM and COSCO are likely to require similar amounts.

The dry bulk segment is increasingly investigating methanol bunkering, and will add to this figure.

It should also be noted that other users of methanol also want to decarbonise their operations, and will be seeking to replace current grey methanol feedstock with green product over the next few years. 

Most methanol-fuelled ships currently on order are dual-fuelled vessels, capable of running on conventional bunkers as well as methanol. If supply of green methanol is not expanded much more quickly, many of these ships are likely to revert to using fossil fuels.