Cost barrier for methanol propulsion on passenger ships

2024-03-15T19:05:51+00:00 March 15th, 2024|Environment|

A recent Lloyd’s Register (LR) report claimed that the total cost of ownership (TCO) for passenger ships retrofitted with methanol dual-fuel engines to be more than double the cost of blended fuel (Blend B30), heavy fuel oil (HFO) and HFO with on board carbon capture and storage technologies (OCCS).

‘Fuel for thought: Methanol for Passenger Ships’ examined the TCO for operators over a 15-year period and based its results on a calculation that 65% of voyage time would be spent in EU waters.

Overall findings identified in the report, based on analysis by the LR Business Advisory team, showed that the methanol bunkering price will be the main commercial barrier for its adoption.

Less environmentally friendly fossil based (grey) methanol, was a more commercially attractive proposition for passenger shipowners than a blend of 50% grey, 25% bio- and 25% e-methanol, even when EU emissions taxes are taken into account.

However, the study also highlighted that methanol is a technically viable fuel for ship operators looking to reduce the carbon emissions of passenger ship newbuildings, owing to the similar characteristics of methanol to existing fuels.

Viable retrofits have also been undertaken in the sector, such as the pioneering LR project with the ropax ‘Stena Germanica’ in 2015.

The technical viability of methanol is reflected in the global orderbook with passenger ships ranging from small inland vessels to the largest cruise ships awaiting delivery.

The report also outlined that greater investment is needed in green and bio-methanol production along with improved bunkering infrastructure to increase fuel availability and reduce costs to a commercially viable level.

Natasha Pritchard, LR’s Vice President Strategic Key Accounts (Cruise), said: “Our latest ‘Fuel for thought’ report brings some much-needed insights for passenger shipowners evaluating methanol as part of their energy transition pathway.

“Whilst methanol as marine fuel holds considerable promise as a low carbon solution for passenger ship propulsion, the total cost of ownership (TCO) compared to other fuels may represent an obstacle to its widespread take-up in the segment.

“It is therefore vital that renewable and low-carbon production of methanol is prioritised in order to drive down these costs,” she said.

This report is the latest release in the ’Fuel for thought’ series and references the LR Maritime Decarbonisation Hub’s research in the form of its ’Zero Carbon Fuel Monitor’ and ’Zero Ready Framework’ whitepaper.