| Summary: | The maritime industry is currently facing pressure from the International Maritime Organization (IMO) and other global bodies to reduce its carbon footprint. One of the ways to do so is by utilising alternative fuels, such as methanol, to decarbonise shipping. This paper explores the holistic life-cycle of methanol as an alternative fuel. More specifically, the cost concerns regarding the adoption of methanol in vessels. It explores the impact of cost on methanol production, distribution, consumption and recycling, as well as the effects that politics have on the cost in the four mentioned stages.
To understand how cost affects the adoption of methanol and how politics influence the cost, primary and secondary data were collected in order to ensure consistent and reliability findings. The primary data consisted of interviews with 4 people employed in different areas of the maritime industry. The interviewees are: Mr. Andreas from Victory Shipping, Mr. Balani from Lloyd’s Register, Mr. Yip from Pacific International Lines and Ms. Tiffany Khek from Kenoil Marine Services. In addition, a survey was conducted with 25 people in the maritime industry. The secondary data consisted of literature from various sources to serve as cross references.
This paper has found that the economic aspect is significant in the adoption of methanol as a fuel in vessels. The main challenges presented by the cost lie in the production and recycling life-cycle stages. Politics have influence on the economic aspect as government policies are crucial for mitigating the cost challenges so that shipowners will be encouraged to adopt methanol fuel on their vessels, while methanol producers can increase their scale of production through technological developments and facility construction.
This paper concludes that methanol is a feasible alternative fuel for shipping decarbonisation. For the adoption of methanol to become more widespread, the cost concerns in all 4 stages have to be addressed. Government intervention is needed in the form of subsidies and incentives for producers, stakeholders have to cooperate to facilitate the distribution of methanol from the regions of production to the regions of consumption, through the construction of more methanol storage facilities and to increase the economies of scale. Shipowners have to be convinced to select methanol fuel over other alternative fuels through the construction of more methanol bunkering infrastructure and the reduction in vessel operating costs of methanol fuelled vessels. Lastly, more financial investments are needed for the construction of carbon storage facilities to enable a stable supply of recycled methanol.
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