Methanol in Shipping: A Low-Emission Alternative with Strategic Value
Author: Jeroen Berger • Publication date:
International shipping is under growing pressure to meet stricter environmental regulations. Under MARPOL Annex VI of the International Maritime Organization (IMO), the sulfur content of marine fuels may not exceed 0.50 m/m (mass by mass) worldwide. In Sulphur Emission Control Areas (SECAs), a more stringent limit of 0.10 m/m applies. These zones include the Baltic Sea, the North Sea and the coastal waters of North America. In NOx Emission Control Areas (NECAs), such as parts of the Caribbean and North America, IMO Tier III standards apply under Regulation 13 of MARPOL Annex VI. These rules require significantly lower nitrogen oxide (NOx) emissions from combustion engines above 130 kW on ships with a keel-laying date from 1 January 2016 onwards.
Shipping companies and shipowners are therefore making strategic choices: use low-sulfur fuels such as marine gas oil (MGO), install exhaust gas cleaning systems (scrubbers or EGCS), or switch to alternative fuels such as liquefied natural gas (LNG). While these options are increasingly used, methanol remained under the radar for a long time, despite its emission benefits and ease of integration into existing fuel logistics.
Since 2023, interest in methanol has increased significantly. This shift is closely tied to the IMO’s Greenhouse Gas (GHG) Strategy and the European Green Deal. Methanol burns cleanly and contains no sulfur. Depending on engine type and load, NOx emissions can be reduced by up to 80 percent compared to heavy fuel oil (HFO). Many methanol-fueled vessels meet the requirements of MARPOL Annex VI without requiring additional exhaust treatment systems such as SCR catalysts.
When produced sustainably, methanol also delivers measurable climate benefits. If derived from biogenic or synthetic sources, such as biomass or electrolysis combined with captured industrial CO2, it contributes to climate neutrality across the fuel’s full lifecycle. This aligns with the IMO’s emission reduction targets for 2030 and 2050. Methanol also complies with the EU Emissions Trading System (EU ETS) and the carbon intensity limits under the FuelEU Maritime regulation. Leading shipping companies such as Maersk, Stena and Van Oord are investing in methanol dual-fuel vessels for both short-sea and deep-sea routes.
This article explores methanol’s potential as a marine fuel. It covers emission performance, technical feasibility and regulatory compliance, and compares methanol to other alternative fuels including LNG, hydrogen and ammonia. For different ship types, such as seagoing, inland and offshore vessels, application scenarios are outlined, with attention to certification, regulatory frameworks and investment considerations for 2030 and 2050.
Methanol as a Clean and Versatile Marine Fuel
Methanol (CH3OH) is a liquid alcohol-based fuel with a simple molecular structure that allows clean combustion without soot. It does not emit sulfur oxides (SOx), particulate matter or ash. In many cases, methanol meets MARPOL Annex VI requirements directly, provided the engine configuration and operating conditions stay within the limits of the NOx Technical Code (2008). No exhaust aftertreatment is needed, making systems such as SCR catalysts and particulate filters unnecessary. This offers clear operational benefits, especially in SECAs and NECAs, where stricter standards apply. Lower system complexity also reduces technical demands onboard.
Methanol’s emission performance is well established. At around 75 percent of maximum continuous rating (MCR), NOx emissions can be reduced by 60 to 80 percent, depending on engine type and settings. Sulfur emissions fall by about 99 percent, and particulate emissions by approximately 95 percent. These figures are based on ISO 8178 and are internationally recognized. For ships operating in emission-sensitive areas, methanol offers a practical solution for compliance and reliable service.
Methanol also brings logistical advantages. It remains liquid at ambient temperature, so no cryogenic systems are needed. Existing storage tanks, pipelines and bunkering facilities can typically be reused with minor adjustments, which keeps conversion costs low. Methanol is available in more than 100 international seaports. Its market price is generally more stable than that of LNG or MGO, supporting predictable operational budgeting.
In terms of safety and environmental impact, methanol performs well. It dissolves fully in water in case of a spill and is biodegradable. These properties make it especially suitable for use in ports, coastal areas and inland waterways, where environmental risks are higher and spill response is critical.
Strategic Production Pathways and Lifecycle Benefits
Methanol can be produced in several ways, depending on the feedstocks used. Each method has a specific lifecycle emission profile. Gray methanol is made from fossil sources such as natural gas or coal. This widely available type does not require engine modifications and can be used directly, particularly when fast deployment is needed.
Green methanol is produced from renewable hydrogen via electrolysis, combined with CO2 captured from industrial processes. This creates a nearly climate-neutral fuel. Blue methanol is a transitional form, still based on fossil feedstocks, but produced with carbon capture and storage (CCS). The most advanced option is e-methanol, a synthetic fuel made entirely from renewable electricity and recycled carbon. This route offers the highest reduction potential for greenhouse gas emissions.
The environmental performance of these variants has been independently evaluated. Lifecycle assessments conducted under ISO 14040 and ISO 14044 show that green methanol can reduce total CO2-equivalent emissions by around 90 percent. This depends on the energy source and the type of captured carbon used. Sustainable methanol is therefore a strong option for reducing emissions in shipping.
Compared to other alternatives such as LNG, methanol performs well. LNG reduces CO2 emissions by around 20 percent compared to HFO but loses part of that benefit due to methane slip during production, storage and combustion. Methanol does not have this disadvantage. Even fossil-based blue methanol typically achieves 5 to 10 percent lower CO2-equivalent emissions than LNG.
Methanol is also practical to implement. It does not require cryogenic storage or advanced gas purification systems. Its infrastructure requirements are less demanding, making it easier to integrate into both newbuilds and retrofits. This ease of implementation makes methanol a strategically attractive option for fleet renewal strategies toward 2040.
Technical Application: Engines, Conversion and the OBATE Concept
Methanol requires specific adaptations to engines and fuel systems due to its low cetane number and relatively low energy density. It cannot be burned directly in conventional HFO engines. Several implementation options have therefore been developed, ranging from minor engine adjustments to full propulsion system conversions. These include changes to injection timing and spray patterns, as well as systems for fuel reforming, leak detection and onboard safety.
One early approach was the OBATE (On-Board Alcohol to Ether) concept. In this system, methanol is converted onboard into dimethyl ether (DME), which has better ignition properties for diesel engines. The concept was tested on a RoPax ferry with a 300 kW engine. While the retrofit involved limited changes, the OBATE system was large and required extensive safety measures for storage, ventilation and leak detection. As a result, focus shifted to direct methanol combustion.
Attention has since moved to dual-fuel engines developed by manufacturers such as MAN and Wärtsilä. Engines like the MAN ME-LGIM and Wärtsilä 32DF run primarily on methanol, with a small amount of marine diesel oil (MDO) as pilot fuel. These engines are suitable for both newbuilds and retrofits and comply with the IGF Code, which sets safety standards for low-flashpoint fuels. They are equipped with dual injection systems, corrosion-resistant components and integrated leak detection, supporting both technical reliability and regulatory compliance.
These systems have proven reliable in practice. The Stena Germanica was converted in 2015 to operate on methanol on fixed SECA routes. By 2022, Waterfront Shipping had logged over 120,000 operational hours without major incidents. In 2025, Van Oord bunkered 500 tons of green methanol on its offshore installation vessel Boreas, resulting in a reported fleet-level CO2 reduction of more than 78 percent.
Methanol has been formally recognized as an alternative fuel since 2020. The IGF Code includes binding technical and operational requirements, including gas detection, forced ventilation, leak-proof piping and mandatory crew training. Methanol can be used on both existing and new ships, provided all safety and classification standards are met.
Suitability by Ship Type and Operating Profile
Methanol remains liquid at ambient temperatures and is relatively easy to bunker. Unlike LNG, no cryogenic equipment is required, reducing the technical barrier to use. Because methanol has only half the energy density of conventional diesel, ships need more tank space to achieve a similar range.
This has direct implications for oceangoing vessels. Fuel tanks take up space that would otherwise be used for cargo. Large containerships address this by integrating fuel tanks into the double bottom or forepeak. Maersk led this development with methanol-fueled ship designs starting in 2021. In 2023, the Laura Maersk entered service as the world’s first methanol-powered containership (2,100 TEU). Since then, 25 similar ships have been ordered, including 18 units of around 16,000 TEU. Investments in methanol bunkering infrastructure in ports such as Rotterdam, Singapore and Houston support this scale-up.
Methanol is also a good fit for short-sea shipping. It works well on shorter routes with frequent bunkering. Ferries, RoPax ships and cruise vessels can offset the lower energy density through regular refueling. The Stena Germanica retrofit demonstrates that daily methanol bunkering is technically feasible and operationally reliable. Offshore and service vessels can also use methanol, provided appropriate bunkering infrastructure is available. Van Oord’s Boreas has shown that even specialized ships can use methanol without performance limitations.
Inland vessels represent another promising application. Methanol is well suited to urban areas with strict emission requirements. In the Netherlands, the Green Maritime Methanol program is exploring its use. Pilot projects are also underway in Belgium and Germany using methanol generators on small inland vessels. Methanol is also being tested as a hydrogen carrier on harbor service vessels and houseboats. While certification for lower-powered engines is still developing, pilot results suggest long-term viability.
Due to its low flash point (around 12 °C) and toxicity, methanol falls under the IGF Code. Fuel tanks cannot be located in the engine room. Newbuilds must include ventilated cofferdams, double-walled tanks and inert gas blankets. In retrofit projects, existing HFO settling tanks may be reused if fitted with appropriate internal coatings. Methanol is hygroscopic and can corrode untreated steel with prolonged contact.
Currently, methanol is most suitable for vessels with predictable operating profiles and sufficient tank capacity. Larger tankers and bulk carriers can also be adapted, provided the energy system is balanced. For ultra large crude carriers and supertankers, additional design measures are needed, including expanded bunkering capacity. The first large-scale use cases are emerging in the 5,000 to 50,000 DWT segment, including multipurpose vessels, feeders and mid-size containerships. As global methanol infrastructure expands, cruise and naval vessels are also being considered. Because methanol does not require cryogenic storage and has a manageable safety profile, it offers a practical alternative to LNG.
Comparison with Other Alternative Fuels
To assess methanol as a marine fuel, it is important to compare it with other alternatives. LNG eliminates most SOx and particulate emissions and lowers CO2 emissions by about 20 percent. However, methane slip remains a problem, and LNG must be stored at –162 °C, which requires complex systems. Methanol is easier to handle. It stays liquid at ambient temperature and does not require cryogenic storage.
Biofuels such as FAME and HVO are relatively easy to use. They can be blended with traditional fuels and, when made from sustainable waste streams, can reduce CO2 emissions by up to 80 percent. However, they are sensitive to water absorption, microbial growth and oxidation, which affects long-term stability. Green methanol, also biogenic, avoids these issues and offers a more robust emission profile.
Hydrogen is theoretically ideal in terms of emissions: it produces no exhaust gases or particulates when burned. In practice, its low volumetric energy density and the need for storage under high pressure or at cryogenic temperatures make implementation complex. Combustion also produces NOx, requiring exhaust treatment. Methanol offers a practical alternative: as a hydrogen carrier, it enables onboard hydrogen production without cryogenic storage and with a compact system setup.
Ammonia is CO2-free and has relatively high energy density, but it is toxic and must be stored under pressure or at –33 °C. Combustion is chemically complex and produces NOx and N2O, both of which have a high climate impact. Methanol offers a safer and more manageable alternative. It is regulated under the IGF Code and can be used safely within existing rules.
Battery-electric propulsion offers clear environmental benefits: zero local emissions and low noise. It is especially suited to ferries, port vessels and other short-range operations. However, battery energy density limits range. Hybrid systems are therefore often used, with batteries providing power for maneuvering and peak loads, and methanol extending range and endurance.
Synthetic fuels such as GTL and e-diesel reduce soot and sulfur emissions, but have limited impact on CO2 emissions. GTL is fossil-based, and e-diesel requires a high-energy production process, limiting its climate benefit. E-methanol, made with renewable electricity and captured CO2, is scalable, certified and compatible with existing infrastructure. This makes it a strong candidate in emission reduction programs for 2030 and 2050.
Investment, Regulation and Outlook Toward 2050
Green methanol from biogenic or synthetic sources qualifies for favorable CO2 ratings under European regulations, provided the full lifecycle is climate-neutral. Based on stoichiometric combustion, the end-of-pipe emission is around 69 grams of CO2 per megajoule (MJ) of lower heating value (LHV). Methanol therefore performs well on key indicators such as the Energy Efficiency Design Index (EEDI), the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII). It supports compliance with MARPOL Annex VI and the long-term goals of the European Green Deal.
New markets and financial incentives are supporting the large-scale use of methanol. Major ports such as Rotterdam, Singapore and Houston are expanding their bunkering infrastructure for methanol. Globally, more than 120 ports now offer methanol bunkering. European programs such as Horizon Europe and InnovFin are co-financing demonstration projects. At the same time, long-term purchase agreements (PPAs) are being developed to reduce price fluctuations and improve supply security.
Classification societies such as DNV and Lloyd’s Register (LR) now offer specific notations like “Methanol Ready” and “Methanol Equipped.” These support both newbuild and retrofit projects under existing standards. While structural insurance benefits are still evolving, leading reinsurers are assessing premium differentiation based on methanol classification.
There are also new financing opportunities. The European Investment Bank (EIB) recognizes methanol projects with proven transition capacity to e-methanol as green under its ESG assessment framework. This can lead to better financing terms, including lower interest rates and guarantees.
For shipping companies and shipowners, methanol is not a temporary solution. It is a legally recognized, technically proven and economically scalable pathway to long-term emission reduction by 2030 and 2050.