China Merchants Energy Shipping (CMES) and COSCO Shipping Bulk have said they will focus on methanol marine fuel as their primary area of research in the future.
CMES 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.
At the end of May 2022, the shipping business of China Merchants Group had a fleet of 315 ships (including newbuild orders) equivalent to 44.6m dwt, ranking second among non-financial shipowners worldwide. COSCO Shipping Bulk operates a fleet comprising some 400 bulk carriers, equivalent to nearly 40m dwt.
The Methanol Institute, which represents producers, distributors, and technology companies, welcomed the commitment. “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,” says Kai Zhao, chief China representative of 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 newbuilds as a means to progressively reduce carbon emissions and cut ship-source pollution. AP Moller-Maersk, CMA-CGM and X-Press feeders placed orders or increased their commitments for methanol newbuild vessels.
Methanol is viewed as an available, practical and affordable alternative marine fuel as natural gas prices spiral and demand grows for a fuel that can offer short term carbon reductions and deliver long term lifecycle benefits as renewable products become available.
With more bulk shipowners exploring methanol as fuel, this year has seen methanol/dual-fuel designs for bulk carriers and tankers coming to market. Main engine makers report full order books for new units and increasing interest in retrofits and conversions of existing engines. 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 decarbonization ambitions,” says Chris Chatterton, chief operating officer of 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.”