Production, regulation, and demand are aligning for ethanol as a marine fuel. File Image / AI Generated Image by Ship & Bunker

• EV-driven drop in road blending demand is pushing ethanol producers toward shipping
• Price case hard to ignore with ethanol around $600/mt vs $2,000mt for green methanol
• Methanol fleet of 129 in service, 317 on order, 1,100 retrofits planned, all ethanol-capable
• US ILUC and Default Emission Factor submission could open the door for crop-based ethanol under green fuel rules

Ethanol has been part of the global transport fuel mix for decades, and for good reason.

Advocates for ethanol would point to its role in helping to stabilise gasoline prices in adopting markets, and to being one of the most mature biofuel supply chains in the world.

What it has not done, until recently, is attract serious attention as a marine fuel.

That is starting to change, and in this article we look at why 2026 is shaping up to be the year the conversation on ethanol bunkers moves from theoretical to commercial.

The Supply Opportunity

The catalyst is largely external to shipping.

As electric vehicles displace gasoline consumption in road transport, the blending market that has historically absorbed the bulk of global ethanol production is shrinking, meaning producers are looking for new outlets.

The United States and Brazil dominate the market and together account for around 80% of global ethanol production - the US at around 52% and Brazil 28%.

US ethanol is predominantly corn-based, while Brazil production largely from sugarcane.

Global fuel-grade ethanol production already exceeds 120 billion litres per year, or about 60 MToE (milion tonnes of oil equivalent), and is considered to be fully scaled, with mature export infrastructure and established quality standards.

Or put another way, production volume and global distribution chains are already in place and have been for the past 30 years, significantly easing its adoption in new markets.

Shipping, with its enormous fuel appetite and relatively low barrier to entry for alcohol-capable vessels, is a natural fit.

The price case is also hard to ignore.

Ethanol is currently trading at around $600 per tonne in the US, a fraction of the $2,000 per tonne that green methanol has been commanding.

Engine designer WinGD, which has formally approved ethanol for use in its methanol dual-fuel engine family, has described it as a potential "game-changer" for shipping's energy transition: cheaper than green methanol, available now, and compatible with existing infrastructure.

This month the firm won the world's first orders for its dual-fuel ethanol engines for use on ocean-going vessels.

The Methanol Bridge

Ethanol's most strategically important characteristic in a marine context is its relationship with methanol.

The two fuels are fully miscible: they can be blended in any ratio, stored in the same tanks, and used in the same dual-fuel engines with only minor adjustments to fuel injection systems.

This is not a future compatibility; it is already validated.

WinGD, Wärtsilä, and Everllence have all confirmed that their methanol dual-fuel platforms can handle ethanol.

Although ethanol is produced from biomass and would conventionally be categorised as a biofuel, its physical properties align with methanol rather than with oil-based biofuels such as FAME or HVO.

Its flashpoint is around 13°C, it is fully miscible with water, and it behaves as an alcohol fuel rather than a distillate.

That is why MSC.1/Circ.1621 treats methyl and ethyl alcohols together under the IGF Code framework for low-flashpoint fuels, rather than under conventional oil fuel safety regimes.

For an industry already prepared for methanol, this means ethanol slots into the same operational and regulatory category, not a separate one.

This matters because it means ethanol does not need to build its own fleet from scratch, it can leverage the existing and growing methanol fleet.

As of end-2025, approximately 129 ocean-going vessels above 5,000 GT are in operation with methanol dual-fuel capability, with a further 317 on order for delivery up to 2030.

Recently analysis by Ship & Bunker shows that at the start of 2026 Q2 the global orderbook represented 4.4 million mt of global methanol demand.

Beyond newbuilds, an estimated 1,100 existing methanol ready vessels are planned for retrofit to methanol dual-fuel operation over the next five years.

That is a pipeline of well over a thousand ships that could realistically run on ethanol, subject to compliance with the existing IMO safety circular MSC.1/Circ.1621.

Container line Maersk has already moved beyond theory, trialing  E10 and E50 blends(50% ethanol, 50% methanol) on its dual-fuel Laura Maersk, and has now progressed to a 100% ethanol voyage confirming that ethanol can be safely used without compromising engine performance.

The optionality this creates is a key commercial argument.

A vessel built for methanol can run on fossil methanol, bio-methanol, e-methanol, bio-ethanol, e-ethanol, HVO, FAME, or conventional VLSFO.

Switching between alcohol fuels and oil-based fuels is seamless.

For shipowners navigating an uncertain regulatory environment, that flexibility materially reduces commercial and operational risk.

From a carbon intensity standpoint, blending ethanol with fossil methanol also delivers immediate results.

Ethanol carries a significantly lower carbon intensity than fossil methanol, roughly a 30% to 40% reduction from the MGO baseline, compared to methanol's 10 to 15% higher emissions relative to MGO / VLSFO.

Even modest blending ratios can therefore meaningfully reduce a vessel's overall fuel CI score at a competitive marginal cost.

Infrastructure and Logistics

One of ethanol's less-discussed advantages is that its logistics infrastructure already exists.

Ethanol has been traded globally as a bulk liquid commodity for over 30 years, using chemical tanker routes and terminal infrastructure that align closely with methanol bunkering.

Under MARPOL Annex II it is classified as a bulk liquid chemical cargo (Pollution Category Z), meaning ports, terminals and crews have established protocols for handling it safely from the cargo side, well before it was considered as a marine bunker.

Ports that are developing methanol bunkering capability can, with aligned safety protocols, integrate ethanol into the same infrastructure. 

This reduces the capital requirements and development timelines that have made other alternative fuels difficult to scale.

Just a few weeks back, Singapore's X-press Feeders successfully bunkered 10% of ethanol in the port of Rotterdam without any additional infrastructure requirements other than the ones already set in place for methanol bunkering and for ethanol storage at the port.

The regulatory safety framework also already exists.

In 2020, the IMO's Maritime Safety Committee adopted MSC.1/Circ.1621, Interim Guidelines for the Safety of Ships Using Methyl/Ethyl Alcohol as Fuel, which covers storage, fire safety, machinery systems, bunkering procedures and crew training for both methanol and ethanol.

Work is ongoing at the IMO to refine these provisions, but ethanol is already inside the regulatory architecture, something that cannot be said of many of the other condidate future fuels that have so far attracted greater attention.

The Production Case

Concern about land use and food competition has historically been a barrier to crop-based ethanol gaining acceptance as a green marine fuel, particularly under EU regulations, which currently restrict the use of crop-based biofuels.

But the production reality has shifted significantly from the assumptions underlying those rules.

US corn ethanol output per acre has risen from approximately 228 gallons per acre in 1980 to around 519 gallons per acre in 2025, a 128% increase achieved without expanding land use.

Modern ethanol plants are biorefineries: when corn is processed, the starch is fermented into fuel, while the protein, fat and fibre return to market as distillers dried grains (DDGS), a high-protein animal feed used across cattle, dairy, swine and poultry industries globally.

Roughly one third of every bushel processed for ethanol comes back into the food chain as feed.

Advocates therefore believe the argument that ethanol competes with food production is increasingly difficult to sustain and the regulatory debate is actively moving.

Indeed, the United States recently submitted a paper to the IMO's Intersessional Working Group on GHG Emissions (ISWG-GHG 21/3/21) challenging the IMO's current approach to indirect land use change (ILUC) risk assessment for crop-based marine fuels.

The submission argues that the existing 2024 LCA Guidelines assess risk only within project boundaries, which, since ILUC by definition occurs outside those boundaries, fails to capture the actual deforestation risk.

Washington is pushing for a regional-based assessment approach that would assign risk according to observed deforestation levels in the vicinity of feedstock production zones.

The US is the world's largest ethanol producer, and a regional ILUC framework would tend to favour fuels produced in temperate, low-deforestation agricultural regions, such as the US Corn Belt, over tropical alternatives.

The submission frames its argument in scientific terms, and the scientific case is genuine.

But the commercial alignment between the US regulatory position and its ethanol industry's interest in finding new marine markets is equally clear.

Where Things Stand

• The regulatory door is open.
• The safety framework exists.
• The engines are available.
• The supply is at scale and competitively priced.
• The fleet of compatible vessels is growing.
• The external pressure from EV-driven displacement of road blending demand is actively pushing ethanol producers to find new markets.

What has been missing is commercial momentum at the shipowner level, and regulatory clarity on sustainability that would allow crop-based ethanol to be used under green fuel frameworks.

Both of those things are now in motion, and the direction of travel is very much in the favour of ethanol.