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Methanol backers including COSCO and Bill Gates show their hands

It’s not just the likes of Maersk who are backing methanol as shipping’s fuel of the 2020s and beyond. Chinese giants COSCO and China Merchants are looking at the fuel, while Bill Gates has also invested in tech to support the switch.

The Danish startup Blue World Technologies has just raised €37m ($36.9m) from investors including Breakthrough Energy Ventures, which is backed by Bill Gates, to help it scale up production of a new fuel cell. Blue World has developed a high-temperature fuel cell that makes methanol with no emissions.

Microsoft co-founder Gates has taken a strong interest in decarbonising shipping, and is also backing nuclear propulsion as a way for shipping to slash emissions.

Meanwhile, in China it has emerged the country’s two largest maritime conglomerates, state-backed COSCO and China Merchants are both looking at methanol as a primary area of research in the future.

China Merchants Energy Shipping chairman Xie Chunlin and Gu Jinsong, chairman of COSCO Shipping Bulk, made the comments in a meeting held in late August, during which the two reviewed the co-operation between their companies and exchanged views on the shipping industry’s low-carbon transformation.

“China has set a target to achieve peak carbon and ultimately carbon neutrality and several government ministries have referenced low carbon and renewable methanol development from green hydrogen and methanol-fuelled vessels as key enablers for these policies,” commented Kai Zhao, chief China representative of lobby group, The Methanol Institute. “That places methanol at an entry point on the transition curve where two leading Chinese companies can reduce GHG emissions and achieve carbon neutrality in the longer term.”

The news comes in a year that has already seen some of the industry’s biggest players commit to methanol dual fuel newbuildings as a means to progressively reduce carbon emissions and cut ship-source pollution.

Lines including Maersk, CMA CGM and X-Press Feeders have placed orders or increased their commitments for methanol newbuild vessels.

Other companies including Waterfront Shipping, Stena/Proman, NYK and MOL have built a series of methanol carriers that use a segregated portion of the cargo as fuel.

“China is already a leader in production of renewable energy and the shift towards Methanol long term is in step with its decarbonisation ambitions,” said Chris Chatterton, chief operating officer at The Methanol Institute. “The shipping industry can’t wait for fuels that may be decades away from approval and availability; shipowners need a place to start in making carbon savings and Methanol can provide that transition now.”

In February this year, COSCO Shipping Energy Transportation unveiled a methanol-fuelled VLCC design developed with CSSC’s Dalian Shipbuilding Industry Co with approval in principle granted by class societies DNV and CCS.

In neighbouring South Korea, Proman Stena Bulk, the joint venture between methanol producer Proman and tanker firm Stena Bulk, revealed today that their two fully operational methanol-fuelled tankers have become the first vessels to bunker methanol in the country, at the southern port of Ulsan. The bunkering was executed despite South Korea not being a methanol-producing country, and neither vessel was carrying methanol as cargo.

“The increasing global uptake of methanol as a marine fuel is aided by its current availability across 120 ports worldwide, including the major global bunkering hubs of Singapore, Algeciras, Houston and Rotterdam. Meanwhile, other key locations such as the Port of Gothenburg and Rotterdam are adopting or developing new simple methanol bunkering guidelines,” Proman Stena Bulk stated in a release, adding: “The status of methanol as a viable marine fuel, both now and into the future, is being further strengthened by the relative ease in which it can, as a non-cryogenic liquid, utilise existing bunkering infrastructure and storage in line with IMO regulations, considerably lowering the barrier to entry for interested owners and operators.”

Erik Hånell, president and CEO of Stena Bulk, said: “This bunkering of methanol in Ulsan is further proof that infrastructure and availability is not a barrier for turning our vision of methanol as a key decarbonisation solution into reality.”

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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