Policy

Methanol may be a better fuel alternative, but how can it be made competitive? What policies should be pursued to make methanol a feasible alternative for ships?

According to the International Maritime Organization (IMO), greenhouse gas emissions from shipping have the potential to increase by 50% to 250% by 2050.^[1]“Navigating the Way to a Renewable Future: Solutions to Decarbonize Shipping.” www.irena.org. International Renewable Energy Agency. Accessed November 3, 2021. … Continue reading One of the strongest methods towards making methanol a competitive fuel source is to continue to pursue policy that makes CO₂-producing fuels more expensive.^[2]Wang, Yifan, and Laurence A. Wright. “A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation.” MDPI, … Continue reading Many organizations responsible for maritime policy, such as the International Maritime Organization (IMO), European Union (EU), and the United States, are putting restrictions on emissions like CO₂ and nitrogen oxides.^[3]Wang, Yifan, and Laurence A. Wright. “A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation.” MDPI, … Continue reading It is no surprise that cost is a very large component of getting methanol to be primarily used.  In the process of switching to methanol, ship companies will need to change infrastructure, engines, and possibly replace entire ships. Unfortunately, it is not likely that alternative fuels can compete with the cost of conventional marine fuels in the foreseeable future, so policy measures need to be taken for alternative fuels to stand a chance.^[4]Wang, Yifan, and Laurence A. Wright. “A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation.” MDPI, … Continue reading

Market-based measures (MBMs) are policy measures that utilize economic principles to affect emissions, as opposed to command-and-control regulation in which standards and methods for emissions are directly set. Economic theorists have identified MBMs as the strongest method of shifting fuel use.^[5]Wang, Yifan, and Laurence A. Wright. “A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation.” MDPI, … Continue reading In 2010, a total of eleven MBM proposals from different countries had been submitted to IMO. Wang and Wright state, “Discussion on them continued until 2013 and was suspended without a decision being reached”, but do not give information as to why.^[6]Wang, Yifan, and Laurence A. Wright. “A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation.” MDPI, … Continue reading

In 2020, a large group of industry associations proposed the establishment of an International Maritime Research and Development Board (IMRB). This program will be financed voluntarily by shipping companies through a mandatory contribution of 2 US$ per tonne of marine fuel purchased. Its total revenues are estimated at US$5 billion.^[7]Wang, Yifan, and Laurence A. Wright. “A Comparative Review of Alternative Fuels for the Maritime Sector: Economic, Technology, and Policy Challenges for Clean Energy Implementation.” MDPI, … Continue reading This program is meant to focus entirely on accelerating the use of low-emission technologies and fuels for maritime transportation. However, this program has had a slow start, and it is not planned to be operational until 2023.^[8]Fraende, Mette Kronholm. “Shipping Industry Urges Governments to Act on USD 5 Billion Decarbonization Fund.” BIMCO Home. BIMCO, June 10, 2021. … Continue reading

FBCI Energy maintains that current policy doesn’t consider methanol as a potential marine fuel. ^[9]Andersson, Karin, and Carlos Marquez Salazar. “Methanol as a Marine Fuel Report.” www.methanol.org. FCBI Energy, March 2018. … Continue reading However, methanol fulfills Sulfur Emission Control Area (SECA) sulfur emission criteria.^[10]Andersson, Karin, and Carlos Marquez Salazar. “Methanol as a Marine Fuel Report.” www.methanol.org. FCBI Energy, March 2018. … Continue reading This criteria is that all ships in a SECA must use fuel with a sulphur content less than 0.50%. ^[11] “Imo 2020 – Cutting Sulphur Oxide Emissions.” International Maritime Organization, https://www.imo.org/en/MediaCentre/HotTopics/Pages/Sulphur-2020.aspx. 

Methanol should be included in policies and regulations, and promoted as a compliant fuel. A suggested method of policy for promoting methanol as an alternative fuel is to include methanol as one of the low-flashpoint fuels in international regulations on bunkering and safe-handling.^[12]Andersson, Karin, and Carlos Marquez Salazar. “Methanol as a Marine Fuel Report.” www.methanol.org. FCBI Energy, March 2018. … Continue reading Low-flashpoint fuels have a flash point less than 37.8 ^oC (100.0 ^oF). Methanol has a flashpoint of around 11 ^oC (52 ^oF), so it fits the criteria.^[13]Andersson, Karin, and Carlos Marquez Salazar. “Methanol as a Marine Fuel Report.” www.methanol.org. FCBI Energy, March 2018. … Continue reading Bunkering is the process of loading fuel on and off a ship. ^[14]Anish. 2021. “Bunkering Is Dangerous: Procedure for Bunkering Operation on a Ship.” August 27, 2021. … Continue reading Adding methanol as one of the low-flashpoint fuels in international regulations on bunkering would make it more attractive to shipping companies, which are sometimes uncertain about the properties of methanol.

The European Union’s 2012 Energy Roadmap calls for greenhouse gas emission reductions of 80-95% by 2050.^[15]“Innovation Outlook: Renewable Methanol.” www.irena.org. International Renewable Energy Agency, January 2021. … Continue reading Although not specific to marine fuels, this type of goal setting is vital to creating policy that improves the feasibility of methanol as a fuel. Many countries have implemented cap-and-trade programs for the regulation of CO₂ emissions. These create a financial case for investment in alternative fuels, which can be applied more specifically to the marine sector. Another strong potential policy instrument is to provide a long-term guaranteed price floor for methanol.^[16]“Innovation Outlook: Renewable Methanol.” www.irena.org. International Renewable Energy Agency, January 2021. … Continue reading This means that the price of methanol is regulated so that it does not go below a certain price threshold long term. Although it may seem that a price floor is detrimental, this would not be the case.^[17]“Methanol Production Capacity May Quintuple on Decarbonized Industry Transformation: Study.” IHS Markit, June 10, 2021. … Continue reading The goal of implementing methanol as a marine fuel is to ensure that it can be implemented and maintained as a reliable fuel long term. A price floor could remove some of the long term investment risks of switching to methanol for companies by helping keep methanol supply higher over time. It also allows methanol suppliers to scale up to higher production long term, which will be necessary to meet the demand if methanol becomes more heavily used. 

Overall, not enough policy is being put into place, and the policy that is being put into place is not being implemented fast enough. One of the strongest methods of affecting methanol feasibility is through economics, but these types of policy may not appeal as greatly to companies, who are the ones paying for a majority of the changes needed for methanol to be possible.