Kaleigh Harrison
Methanol is positioning itself as a strong near-term contender in the maritime industry’s shift toward low-emission fuels. A new white paper from DNV, Methanol fuel in shipping, highlights how the technology supporting methanol-powered vessels has matured significantly, with more than 450 ships either operating or on order and over 600,000 hours of methanol engine runtime logged to date.
Unlike ammonia or LNG, methanol can be handled using much of the existing port infrastructure, removing the need for new cryogenic systems and reducing both investment and operational complexity. Retrofit solutions are also well developed, offering flexibility for existing fleets.
One of methanol’s most significant selling points is its operational flexibility. Dual-fuel engines can run on methanol alongside other fuels, including biodiesel and, in some configurations, even ethanol. This optionality is a strategic advantage in a volatile regulatory and pricing environment.
Environmentally, methanol offers benefits such as sulfur-free combustion, reduced soot, and lower NOx emissions. In particular, bio- and e-methanol pathways hold potential for achieving ultra-low or even net-negative lifecycle emissions—if production can scale and sourcing remains sustainable.
Cost and Capacity Remain the Deciding Factors
Despite strong technical foundations, methanol faces economic and logistical challenges. Today’s bio-methanol costs hover around USD 2,500 per ton MGOe—roughly three times the price of marine gas oil. On the supply side, global production currently sits at around 2.2 million tons, a small fraction of what could be needed by 2040 if adoption accelerates.
The outlook is starting to shift, with a wave of new capacity investments underway. China currently leads with 43% of all planned low-emissions methanol production projects. But the speed of market development will ultimately be shaped by regulatory frameworks. DNV’s analysis points to the importance of international policy levers such as the IMO’s Net-Zero Framework and the EU’s FuelEU Maritime regulation in driving fuel transition timelines.
Tools like DNV’s Fuel Selector and Alternative Fuels Insight platform are already supporting shipowners in evaluating compliance options, assessing future investment risks, and modeling operational scenarios. Without clear regulatory incentives and long-term pricing signals, however, methanol risks remaining a technically capable solution that’s commercially out of reach.