Methanol's continuing rise

Editorial from the July/August issue of Nitrogen+Syngas - Richard Hands

While demand for ammonia remains – for now at least – strongly tied to fertilizer and farming, over the three decades that I’ve edited Nitrogen+Syngas magazine, methanol’s story has been a very different one, with a succession of major new slices of demand coming every few years from new applications that flare up and then mature or even drop away again. For a while in the 1990s it was MTBE, the oxygenated fuel additive that had a brief flourish in the US before being shut down by leaking fuel tanks leaching into ground water. Then there was dimethyl ether (DME) as a blendstock for LPG, and methanol itself directly blended into gasoline in China to keep up with soaring vehicle fuel demand. More recently, methanol to olefins (MTO) has added almost another 25% of demand over and above existing chemical and fuel uses.

But as the world cracks down on coal production and use, China’s attempt to use methanol as a way of using domestic coal to replace imported oil seems to have passed its high water mark and begun to recede.

Now the momentum seems to have instead swung behind green methanol as a fuel for maritime applications, and the pace of change is once again as fast as ever.

Green methanol production in 2023 is a few hundred thousand tonnes per year, mainly from OCI Global ’s BioMCN plant in the Netherlands.

However, according to the Methanol Institute there are now around 80 green methanol projects under development, with capacity set to reach a potential 8 million t/a by 2027.

This slew of green methanol development is driven by guaranteed demand from shipping companies, who are looking at green methanol as a low carbon alternative to conventional bunker fuels.

The International Maritime Organization has currently set a target of reducing carbon emissions from shipping by 50% by 2050, and many members are pushing for a still greater reduction. Given the operating lifetime of a large vessel, investment decisions need to be made now by fleet operators, and methanol is a solution already to hand. While we have reported on the considerable efforts going into green ammonia as a potential shipping fuel, methanol powered engines are already commercially available, while ammonia engines are still in the development phase.

And, as far as fuel availability is concerned, if the demand is there, green methanol capacity can be and is being constructed fairly rapidly.

Methanol producers Methanex Corporation and Proman both have their own small fleets of methanol powered tankers, but undoubtedly the biggest boost has come from the strategic decision by shipping giant Maersk Line, Limited to build a fleet of methanol powered container ships. The company now has 25 methanol fuelled vessels on order, many due for commissioning in around 2026-27, at the same time that the new wave of green methanol plants are coming onstream.

A large methanol container ship can use 40,000 t/a of methanol fuel.

Maersk has entered into strategic partnerships and signed offtake agreements with green methanol producers to try and ensure that fuel is available when the ships are launched. Ferry operator Stena Line , which began operating a single methanol powered ship in 2015 as an experiment, has now announced that it will convert several more of its ships to methanol use over the next couple of years.

Widespread take-up as a low-carbon shipping fuel has the potential to be even more of a seismic event for the methanol industry than using coal to make olefins was. Maersk calculates that it alone will require 6 million t/a of green methanol by 2030. Adoption by other large shipping firms could push adoption even faster.

The International Renewable Energy Agency (IRENA) has suggested in a recent report that green methanol demand could reach 250 million t/a by 2050, more than double the size of the entire current methanol industry.

It’s tempting sometimes to play down expectations of a ‘next big thing’ in methanol. Off the top of my head I can recall just as many false starts as there have been game changers. Does anyone remember methanol as a carbon-based fertilizer? Methanol fuel cells? Methanol as a domestic cooking fuel in the developing world? But there is now serious money and investment going into methanol as a low carbon shipping fuel. This is happening.

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