Eco-friendly Ships, Continuous Evolution... The Next Trend After LNG is 'Methanol Propulsion'

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In global new shipbuilding contracts, the number of contracts adopting methanol as the fuel for ship propulsion surpassed those for liquefied natural gas (LNG) propulsion ships for the first time last month. As environmental regulations for eco-friendly ships approach, the next-generation eco-friendly ship market, which will extend to LNG, methanol, ammonia, and hydrogen, is continuously evolving.

According to the shipbuilding industry on the 29th, global shipping companies such as Denmark's Maersk, China's COSCO Shipping, and Hong Kong's OOCL ordered a total of 18 methanol propulsion ships last month. During the same period, 11 LNG propulsion ships were contracted. Last month, the number of methanol propulsion ship orders worldwide exceeded the number of LNG propulsion ship orders for the first time.

In particular, the Korean company Korea Shipbuilding & Offshore Engineering is leading the methanol propulsion ship market following LNG. The world's largest shipping company, Denmark's Maersk, placed an order on the 5th of last month with Hyundai Heavy Industries Group for six methanol propulsion container ships of 17,000 TEU (1 TEU equals one 6-meter container) worth a total of 1.62 trillion KRW. As a result, the total number of methanol propulsion ships Hyundai Heavy Industries is scheduled to deliver to Maersk has increased to 19. Ship prices have also improved. In August last year, Maersk contracted to build eight ultra-large methanol propulsion container ships for 1.6474 trillion KRW. The price per ship rose by about 31%, from approximately 205.9 billion KRW to about 270 billion KRW within a year.

China's COSCO Shipping ordered five 24,000 TEU methanol propulsion container ships from DACKS, a shipbuilding affiliate located in Dalian, China, which are scheduled to be sequentially added to the fleet between 2027 and 2028. French shipping company CMA CGM has also announced plans to invest more than 1 billion USD (approximately 1.3386 trillion KRW) to secure methanol propulsion container ships.

The reason methanol propulsion ships are gaining attention following LNG is due to the upcoming implementation of environmental regulations by the International Maritime Organization (IMO). Starting next year, all ships over 400 tons must comply with the Energy Efficiency Design Index (EEDI) set by the IMO. The EEDI is an index representing the amount of carbon dioxide emitted when transporting one ton of cargo one nautical mile (1.852 km). Ships that do not meet the IMO's EEDI allowable values will be prohibited from operating. Eco-friendly ship orders have thus become a matter directly linked to the survival of shipping companies.

Shipping companies particularly value the advantages of methanol. Compared to conventional marine fuels, methanol can reduce sulfur oxides (SOx) by 99%, nitrogen oxides (NOx) by 80%, and greenhouse gases by up to 25%, making it a promising eco-friendly ship fuel following LNG. Until now, methanol had limitations as a marine fuel due to its high production cost and high nitrogen oxide emissions, but with the development of fuel injection technology that reduces nitrogen oxides, it has emerged as a next-generation marine fuel. Unlike LNG, which requires high pressure and cryogenic conditions for storage, methanol can be stored and transported easily at room temperature and normal atmospheric pressure, which is also considered an advantage. Additionally, when released into the ocean, methanol dissolves quickly in water and biodegrades, preventing marine pollution.

Han-sun Park, head of the Maritime Safety Research Division at the Korea Maritime Institute (KMI), said, "Methanol can reduce carbon emissions by up to 80%, whereas LNG can only reduce them by 20-30%. Using green methanol can meet the IMO's plan to reduce emissions by 70% by 2050."

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