Methanol
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Methanol

Environmental Considerations

1. Emission profile, including life-cycle assessment (LCA)

Current IMO regulations address only emissions occurring on ships, but there is growing pressure for a full LCA methodology to assess Well to Wake (WtW) emissions. These would take into account both direct emissions from the ship (Tank to Wake, or TtW), and emissions from the production and distribution of fuels (Well to Tank or WtT).

Based on TtW emissions, methanol has a lower carbon footprint than fossil fuels. However, methanol can be produced using many techniques. Some are less sustainable than others when measured on a WtW basis.

At the moment most methanol is produced from natural gas (NG) or coal. The use of Biogas in place of NG either as a blend or as a replacement will have a significant positive impact on the well to tank emissions. Synthetic methanol (including e-methanol) will still have some well to tank emissions depending on the emissions from any carbon capture and hydrogen production processes involved.

Brown Methanol and grey methanol are produced from coal and natural gas respectively without reducing well-to-wake GHG emissions.

Blue Methanol on the other hand can be produced from blue hydrogen in combination with carbon capture technology which results in a drastic reduction of well-to-wake GHG emissions.

Green Methanol can be Bio-Methanol produced from Biomass or e-Methanol produced from Green Hydrogen, Captured CO2, and renewable electricity. This results in neutral well-to-wake emissions.

2. Environmental factors (in particular those affecting coastal and port communities):
One major advantage of methanol is that it is biodegradable, reducing the risk of environmental damage from a potential spill.

Methanol gives considerable reductions in both NOx and SOx and Particular Matter (PM) which are of greatest concern in coastal regions and ports in terms of human health. This needs to be tempered with the understanding that in these areas most methanol fuelled vessels have to use some pilot fuel (usually a petroleum-based fuel) and the percentage of pilot fuel increases at lower loads such as when maneuvering, or in restricted waters thus decreasing their emissions advantage in port and coastal areas which is something we expect engine makers to look to address.

3. Expected savings in GHGs’ emissions and how is it verified/recorded:
Using the assessment by SSPA and LR the 100-year WtW Global Warming Potential (or CO2 e) compared to marine gas oil in two stroke slow speed engines is as follows:
  • Dual fuel Methanol from natural gas is 105% of MGO
  • Dual fuel Methanol from biomass is 10% of MGO
Energy content:
Energy content in Methanol is usually measured based on the gross calorific value basis. The calorific value of a fuel is the quantity of heat produced by its combustion – at constant pressure and under “normal” (standard) conditions (i.e., to 0oC and under a pressure of 1,013 mbar). The combustion process generates water vapor, and by the use of certain recondensation techniques it may be possible to recover some of heat contained in this water vapor. As such, there are two types of calorific values:

  • Higher Calorific Value (or Gross Calorific Value – GCV, or Higher Heating Value – HHV) – the amount of heat released by the complete combustion of a unit of natural gas.
  • Lower Calorific Value (or Net Calorific Value – NCV, or Lower Heating Value – LHV) –determined by subtracting the heat of vaporization of the water vapour from the higher heating value. This treats any H20 formed as a vapor.

When used in an internal combustion engine, the NCV is relevant, if burned in a boiler the HCV is relevant.

Following are typical Min-Max ranges of calorific values for methanol:

  • Higher calorific value: 22.7 – 22.90 KJ/kg
  • Lower calorific value: 19.9 – 20.01 KJ/kg

As such, a common rule-of-thumb, when going from Gross Calorific Value to Net Calorific Value, is to multiply GCV by 0,9 (NCV=0,9 GCV)

Technology for Production of the Fuel

Most advanced projects underway:

Methanol can be produced from natural gas, coal, black liquor (a by-product of wood processing) or from biomass including bio gas. It can also be synthesized from CO2 and Hydrogen. Ongoing research and industrial projects are focusing on scaling up methanol to become available for use in the wider transportation industries. A partnership between Copenhagen Airports, A.P. Moller-Maersk, DSV Panalpina, DFDS, SAS, and ‘Oersted’ has been formed to scale up the production of industrial hydrogen in Denmark, with a vision of producing sustainable fuel for the road, air and marine transportation networks by 2030. The production facility will be powered by renewable offshore wind energy, local recovered and captured carbon, and use electrolyzers in several stages which is referred to as e-methanol. Renewable methanol production as a whole has nearly doubled in the past decade. Forecasted increase in demand for shipping and other industries may lead to a greater increase by 2050 in line with requirements.

There are numerous facilities and technology providers worldwide for e-methanol production. The Maersk Mc-Kinney Moller Centre in October 21 stated that methods had been identified for feedstock availability and fuel production of e-methanol and bio methanol, however it is in its infancy. There are over 50 projects at various stages of development globally.

  • Methanol is a key product in the chemical industry. It is mainly used for producing other chemicals such as formaldehyde, acetic acid and plastics. Around 98 million tonnes (Mt) are produced per annum, nearly all of which is produced from fossil fuels (either natural gas or coal).
  • The life-cycle emissions from current methanol production and use are around 0.3 giga tonnes (Gt) CO2 per annum (about 10% of total chemical sector emissions).
  • Renewable methanol production has nearly doubled in the past decade, with a large share of that growth being in China. Under current trends, production could rise to 500 Mt per annum by 2050, releasing 1.5 Gt CO2 per annum if solely sourced from fossil fuels.
  • It’s expected that renewable production techniques will become much more commercially viable in the near future as global regulations and localised emission trading systems such as EU ETS create the required incentives.

Technology as Marine Fuel use

1. Quality parameters to be met (basic properties, flammability, toxicity considerations):

Methanol is a relatively simple molecule and its use in the chemical industry means that there is very little issue with contamination. Its basic properties are well understood. The toxicity is well understood and it has been carried in bulk at sea for many years. It is miscible in water, it is bio degradable and is not carcinogenic to humans. It has a flash point of 12 oC, an autoignition temperature of 464 oC. The flammable range is 6% to 36%. It should be noted that the vapour is heavier than air and it burns without a visible flame which can be a potential safety hazard.

2. Technology development status: Current status of engine development, fuel cell systems for using alternative fuels:

2 stroke and 4 stroke Internal combustion engines (ICEs) have been using methanol for decades and the big players such as Wartsila and MAN have experience with newbuilds and retrofits respectively. Some of the smaller engine OEMs and shipyards are gaining experience with retrofits and newbuilds. Methanol can be used in Otto cycle engines (gasoline). In Diesel engines it cannot operate on a pure Diesel cycle due to the high auto ignition temperature so it needs a pilot fuel for ignition, which can be a small amount of diesel oil. It can also be used in fuel cells. Draft interim guidelines were approved by the Maritime Safety Committee in April 2022. This is a major step forward to facilitate uptake of fuel cells.

3. Types of vessels using technology/ best fitted for technology:

Dual fuel 2 stroke and 4 stroke vessels may have greater flexibility because they will not rely only on supply of methanol. Existing projects include the following ships:

  • Waterfront Fleet of Clean Petroleum product carriers
  • MOL Methanol carrier since 2013
  • Stena Germanica Car / Passenger Ferry since 2015
  • Stena / Proman Chemical Carriers by 2022
  • Maersk Container ships by 2023
  • Many other smaller projects including Cable layers, Inland Water tourist ships etc.
  • As per MAN ES there is an interest to fit an LGIM engine on container vessels, oil tankers and bulk carriers

To date, only short sea vessels have been using fuel cell technology; however, we may see a shift in this as the technology is scaled up for larger vessels.

4. Engine modifications and current technological status (including dual fuel engines).

Main modifications are to the fuel storage and delivery system, especially as this involves a shift to low flashpoint fuels. There are minimal internal engine modifications required to existing engines, save for fitting with a common rail and installation of HP injectors. Modifications are to be made in accordance with the IGF code and in some cases the alternative design criteria will apply which involves a detailed design criteria and bespoke risk assessment in coordination with the classification society. Both MAN and Wartsila offer Dual Fuel modification solutions to enable the use of Methanol as well as other fuels.
Due to the reactive nature of methanol, materials used on board must be inert, for example stainless steel.

5. Retrofit requirements, timelines and costs:

Per vessel as these are largely bespoke projects currently. However, the Stena Germanica’s four units were retrofitted during scheduled dry docks over the course of 12 months, with no delays to sailing times or impingements to budget. The retrofit cost of a ship from diesel fuel to dual-fuel methanol/diesel fuel has been estimated to be € 250-350/kW for large engines (10-25 MW). The actual cost for the installation of fuel tanks and supply will be dependent on the layout of the individual ship.

6. Considerations for an onboard fuel transition:

The key to changing fuel with Methanol is the type of engine installed. In the case of a gas engine, the fuel can only be gaseous. With a dual fuel engine, transition from distillate or residual to methanol is routine and part of the design. The principal difference with other dual fuel engine solutions (LNG, LPG) is the fuel storage.

7. Safety issues. Managing the hazards and associated risks related to the shipboard application. What are some of the appropriate safeguards that can be put in place onboard?

Crew training and certification for working with low flashpoint fuels and chemicals requires focus. There may be a short-term shortage of relevant experience and qualifications in all ranks unless this is addressed across the industry. Engineering cadets and above need educating today about methanol and similar fuels. Training will be most effective once relevant IMO instruments have been adopted. Even the IMO has raised concerns about the alignment of training and dates of entry into force. There is no substitute for hands on experience, however we may see augmented and virtual reality as well as simulators used to keep costs down and reach further in a short space of time. Larger companies bring in relevant expertise in the higher ranks, allowing knowledge to grow organically, but will the smaller companies do this or aim for bare minimum?

Methanol exposure can affect the nervous system, damaging the optic nerve. It can be absorbed through the skin, producing toxic effects. Please see below table extracted from OCIMF showing hydrocarbon products flammability comparison.


Leak detection systems and double walled piping are used to safeguard against the dangers of fire.


8. Operational issues (e.g. extra lubricants, higher MT/Hour equivalent consumption to traditional fuel -and alternatives-, adding/exchanging spare parts, software or subscriptions in order to record and report verification emissions savings):

The fuel supply system for dual fuel engines uses liquid injection. The engine is using temperature‐conditioned methanol at a fixed supply pressure and varying flow depending on the engine load. The methanol low-flashpoint-fuel supply system (LFSS) has to supply this fuel to the engine while complying with the requirements described regarding temperature, flow, pressure and capabilities. The methanol LFSS is designed according to the same concept as an ordinary fuel oil supply system. The fuel is drawn from the service tank containing liquid fuel, and boosted to the supply pressure by a low- (LP) and a high-pressure (HP) pump, to finally deliver approximately 10 bar pressure from the HP pump. To ensure the correct fuel delivery temperature, a heater/cooler is placed in the circulation circuit.

The NOx emissions to meet Tier III can be mitigated using water injection. The water injection unit has the purpose of delivering pressurised water at the necessary flow to be mixed with methanol in order to reduce NOx and thereby meet Tier III requirements. It consists primarily of a pump, filters and pressure transmitters. It delivers water to mix with methanol through the FVT, and therefore water mixing is controlled by the ECS. The water injection unit is designed to be placed in a gas safe area, for example in the engine room. The methanol is stored in a pressure-less tank, for methanol carriers typically on deck. The methanol fuel service tank is split in two compartments, a drain/purge compartment and a supply compartment, connected by a spill over bulkhead.

9. Differentiation between short and deep-sea shipping:

Almost none except for on board storage due to lower energy density than LSFO and MGO.

  • Space for payload drives business case
  • Coasters, IWW bulk and cargo carriers are in many cases highly sensitive to dedicated tank volume
  • Methanol can be stored in double bottom: Tank is eliminated from cargo space = Payload potential

Laws and Regulations

1. Current legislation and policies (IMO, EU, national and regional regulations):

Interim guidelines for the safety of ships using methanol as fuel were approved by MSC in November 2020, and is detailed in MSC.1/Circ.1621 which was issued on 7 December 2020.

2. Industry guidance currently available:

There are comprehensive assessments and guidance from the major classification societies (for example both Lloyds Register and ABS). The trade body, The Methanol institute also has comprehensive guidance available.

3. ISO/ASTM specifications currently available:

Currently there are no ISO or ASTM standards for Methanol quality. The IMO has encouraged ISO to produce a standard for Methanol fuel quality.

Demand / Supply

1. Current production levels and locations: 250,000 mt pa aggregate, globally
2. Production restrictions (such as biofuels requirement for farming area): None as typically bio-methanol is produced from waste feedstocks.
3. Plans of localized production to minimize the emissions outlet during production and transportation to the end user:

As sustainable methanol can be produced from a variety of feedstocks, it is not limited to gas leveraged regions or even renewable power leveraged regions. Therefore, the ability to “glocalize” renewable or bio-methanol is very real.

4. 5 years and 10 years production levels scenarios: From current 100 mtpa to 550 mtpa by 2050:
      • 150 million mt conventional
      • 150 million mt e-methanol
      • 250 million mt bio-methanol
5. Green production levels:

To date, green methanol production levels remain limited and make up less than 1% of delivered cargos. There will be a significant rise in both Bio methanol and e-methanol production by end 2024 – at least by 5 times for Bio methanol and at least 30 times for e-methanol with the latter expected grow significantly after 2030.

6. Current feedstock availability:

Robust

7. 5 years and 10 years feedstock availability scenarios:

Robust

8. Current retail supply availability:

250,000 mt per annum global aggregate.

9. Potential future retail supply availability – 5 years scenario, 10 years scenario:

In view of the feedstock availability, production will likely be able to expand to meet the increasing demand.

10. Demand from other industrial sectors:

In view of the above, and the ability to produce bio methanol in most geographical locations, there will be an increase in demand for methanol as a fuel for other sectors in transportation and for small scale industrial power where other fuel sources are impractical.

Distribution

1. Bunkering infrastructure (potential fuelling sites, distribution, storage, carriage):

As methanol is stored as a liquid at normal ambient conditions, the only limitations are those required to deal with its mild toxicity, flammability and some material restrictions.

Option 1: Terminal Storage Tank to Ship: Vessels arrive at a waterfront facility designed to deliver methanol as a fuel to the vessel. Fixed hoses and cranes or dedicated bunkering arms may be used to handle the fuelling hoses and connect them to the vessels. Piping manifolds are in place to coordinate fuel delivery from one or more fuel storage tanks.

Option 2: Truck to Ship: A tank truck typically consists of a large-frame truck. The mobile facility arrives at a prearranged transfer location and provides hoses that are connected to the truck and to the vessel moored at a dock. Sometimes the hoses are supported on deck and in other arrangements supported from overhead. The transfer usually occurs on a pier or wharf.

Option 3: Ship to Ship: Some marine terminals allow barges to come alongside cargo ships while at berth, thus allowing cargo to be loaded and the vessel to be fuelled at the same time (SIMOPS). Fuelling can also occur at anchorages. Ship-to-ship transfers are the most common form of bunkering.

Methanol is already available in bulk at 115 ports worldwide, however there will be a need to make minor modifications to bunker barges to enable them to be used for methanol service.

2. Fuel storage volume and weight requirements, location of storage, storage requirements (pressure and temperature) for both existing vessels and new buildings:

The energy density of methanol indicates that for the same steaming range, a vessel will need to carry more than twice the mass of fuel as a vessel using VLSFO/MDO/MGO. The volume of the fuel storage tanks will need to be about 2.5 times the volume needed for conventional oil fuels.

Pricing

1. What factors needs to be taken into consideration when pricing the product:

The product price is largely a factor of the location of the production to the location of the demand, the method of production and the delivery infrastructure required. At present, most production is based on natural gas or coal as the raw material. This will change significantly over the next 10 years, especially under the influence of carbon taxes or levies.

Distribution costs are the additional costs which will be added, such as wholesaler mark-up, port fees, road tanker costs, bunker vessel costs, terminal loading charges, logistics cost, manpower cost, admin cost, carbon/emission costs, and profit for distributor.
Additionally local taxes and VAT may be added which will also impact the final delivered price of methanol.

2. Impact of rebates (if any) on pricing:

Fossil fuel based methanol is considered as a transition fuel to the green versions such as Bio-methanol and e-methanol etc. To support decarbonisation, some incentive schemes may be launched and initiatives taken in different regions. Following are some schemes discussed in brief:

  • Port fees exemption / discount: A number of ports are already providing discount for LNG-fuelled vessels. Below are a few of them:

Ports

% Discount on port dues

Port of Rotterdam

20%

Port of Gothenburg

20%

MPA, Singapore

25%

Port of Amsterdam

up to 20%

Mundra port, India

50%

Port of Tallinn

4%

Port of Bergen

20%

Port of Stockholm

5 öre per GT

Port of Hamburg

15%

Port of Antwerp

15%

Port of Rostock

3%

Yokohama Port

100%

Kawasaki Port

100%

Tokyo Port

100%

These ports are likely to introduce similar discounts for other transitional and reduced carbon fuels.

  • Environmental Ship Index (ESI)
    ESI is a tool to reward and incentivize shipowners which are exceeding IMO standards. ESI is a formula which evaluates vessels’ NOx and SOx emission and also rewards vessels equipped to use available onshore power and which demonstrate fuel efficiency improvements over time, reducing carbon dioxide (CO2) and particulate matter (PM) emissions. The ESI vessel register now accounts for over 8000+ oceangoing vessels, with over 55 incentive providers having signed up since its foundation 8 years ago. LNG helps in achieving better ESI which indirectly provides an incentive to ship owners.

  • Fit for 55 package of measures:
    This package of proposals will have an influence on the shipping industry as well as the EU-ETS.

    The EU has proposed to bring the maritime industry into the EU ETS system, where a carbon tax would be put up on the shipping industry to motivate them to choose greener fuels for their ships. Under the EU plan, shipping would be added to the European Union Emissions Trading System (EU ETS) gradually from 2023. Ship owners will have to buy permits under the ETS when their ships pollute or else face possible bans from EU ports. In addition to ships sailing within the EU, the proposals will also cover 50% of emissions from international voyages starting and ending in the bloc.

    The Energy Taxation Directive will encourage a new structure of tax rates based on energy content and environmental performance of fuels whilst reducing exemptions on fossil fuels.

    Fuel EU Maritime aims to increase the production and use of low-carbon and renewable fuels.

    For more information, see the IBIA overview of the Fit for 55 package:
    https://ibia.net/wp-content/uploads/2021/07/IBIA-review-and-obervations-of-EU-Fit-for-55.pdf
3. Renewable power pricing:

In the power sector, natural gas competes with coal, oil and renewables such as wind, solar and hydro. The general consensus seems to be that renewal power pricing is expected to come down in the coming years with the technological advancements and with the low carbon power generation being preferred especially in Europe due to the EU ETS. The cost of renewable power varies from country to country, depending on how it is produced. Provided that the share of renewable power will increase where the majority of the share would be from solar and wind, then the real cost of electric power for e-methanol production will decrease.

4. What is the current US$/MT equivalent? (calorific value adjusted):

Equivalent to the price of MGO on an energy equivalent basis

5. Projection of Forward Prices:

As detailed above.

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