Green Methanol for Shipping 2026: Maersk’s Bet & Supply Chain Challenges

Executive Summary

Green methanol has moved from a niche chemical feedstock to one of the front-runner fuels for deep-sea shipping. Maersk’s multi-billion dollar orderbook of methanol-capable vessels has signalled to shipyards, engine makers, and fuel developers that methanol will play a central role in meeting IMO and corporate net-zero targets. But beneath the headlines, the sector faces a hard reality: most of the required green methanol volume does not yet exist, and the supply chain has to scale from pilot plants to tens of millions of tonnes per year in little more than a decade. At Energy Solutions, we benchmark bio- and e-methanol costs, map Maersk’s demand signal, and unpack the port and feedstock constraints that will define the next decade.

• By the late 2020s, committed orders could require 3–5 million tonnes per year of green methanol for Maersk and early adopters alone, rising to 20–30 Mt/year by 2035 if 20–30% of global newbuilds adopt methanol dual-fuel engines.
• Indicative 2026 production costs span roughly 900–1,400 USD/t for advanced bio-methanol and 1,600–2,400 USD/t for e-methanol, compared with 500–800 USD/t for very low sulphur fuel oil (VLSFO).
• On an energy-equivalent basis, this translates into fuel cost premia of 70–150 USD per tonne of CO₂ abated for the best bio-methanol routes and well above 200 USD/tCO₂ for early e-methanol, depending on carbon accounting.
• Port infrastructure for methanol bunkering is easier to retrofit than for liquid hydrogen or ammonia, but requires upgraded storage, spill management, and crew training, particularly for toxic methanol handling.
• Feedstock competition is the core risk: biogenic CO₂, sustainable biomass, and cheap renewable electricity are all in high demand from other sectors, meaning shipping cannot assume unconstrained access.

What You'll Learn

• Green Methanol Basics: Bio- vs E-Methanol Pathways
• Benchmarks: Fuel Costs, Energy Density, and Engine Efficiency
• Maersk’s Demand Signal and the Emerging Orderbook
• Economic Analysis: Abatement Costs vs VLSFO and LNG
• Case Studies: Early Methanol Vessels and Green Corridors
• Supply Chain Challenges: Feedstocks, CO₂, and Power
• Ports & Bunkering: Infrastructure, Safety, and Standards
• Outlook to 2030/2035: Market Share Scenarios
• FAQ: Green Methanol, Maersk’s Strategy, and Project Bankability

Green Methanol Basics: Bio- vs E-Methanol Pathways

Methanol (CH₃OH) is a liquid at ambient conditions with a boiling point of around 65 °C. For shipping, it offers a lower flash point and higher toxicity than conventional fuel oil, but is significantly easier to store and handle than liquefied natural gas, hydrogen, or ammonia. Engines from multiple OEMs can already run on methanol with relatively modest modifications.

To qualify as “green” or low-carbon, methanol must be produced from non-fossil carbon and low-carbon hydrogen. Two broad pathways dominate today’s discussion:

• Bio-methanol: Produced from biomass feedstocks such as biogas, black liquor, municipal solid waste, or agricultural residues. Carbon is biogenic; hydrogen is often indirectly derived from the same feedstock.
• E-methanol (PtL methanol): Produced from captured CO₂ (industrial, biogenic, or DAC) and green hydrogen via methanol synthesis. Carbon recycling and hydrogen production are decoupled, making scalability a function of renewable electricity and CO₂ availability.

Benchmarks: Fuel Costs, Energy Density, and Engine Efficiency

Comparing methanol with VLSFO and LNG requires viewing fuel properties, engine efficiency, and cost side by side. Methanol has about half the volumetric energy density of fuel oil, meaning ships require roughly twice the tank volume for the same range. However, dual-fuel engines can achieve efficiencies comparable to modern low-speed two-stroke engines.

Maersk’s Demand Signal and the Emerging Orderbook

Maersk and several peers have placed large orders for methanol-ready container vessels, creating a visible demand pull for green methanol supply. While precise numbers evolve, public disclosures suggest that by the late 2020s Maersk alone could require on the order of 1–2 Mt/year of green methanol, ramping higher as older tonnage is replaced.

Economic Analysis: Abatement Costs vs VLSFO and LNG

For shipowners and charterers, the central question is how green methanol compares with VLSFO, LNG, and other alternative fuels on a cost-of-abatement basis. The simplified calculation below focuses on fuel cost premia per tonne of CO₂ avoided.

Case Studies: Early Methanol Vessels and Green Corridors

Case Studies: From First Methanol Container Vessels to Green Corridors

Case Study 1 – Maersk’s First Methanol-Fuelled Containerships

Context

• Segment: Container shipping on key Asia–Europe and transatlantic trades.
• Vessels: A series of large methanol-enabled containerships ordered from major Asian yards.
• Timeline: Initial deliveries in the mid-2020s with ramp-up through the late 2020s.

Key Features

• Dual-fuel engines capable of running on VLSFO and methanol.
• Tank and piping systems designed for methanol’s lower flash point and toxicity.
• Long-term green methanol offtake agreements with multiple producers across regions.

Lessons

Maersk’s strategy accepts higher near-term fuel costs in exchange for supply chain control and a credible decarbonisation narrative. The company’s demand signal helps de-risk early production projects but also concentrates volume and counterparty risk.

Case Study 2 – Regional Green Methanol Corridor

Context

• Region: Short-sea corridor in northern Europe linking two major ports.
• Fleet: A handful of Ro-Ro and feeder container vessels converted or newbuilt for methanol.
• Fuel Supply: Combination of local bio-methanol plant and imported e-methanol.

Operational Insights

• Concentrating demand on a corridor allows efficient use of limited green methanol volumes.
• Port-side retrofits (tanks, pipelines, safety systems) represent a manageable fraction of total project cost.
• Coordinated policy support (port dues rebates, GHG intensity requirements) is critical to project viability.

Supply Chain Challenges: Feedstocks, CO₂, and Power

Scaling green methanol is not just a chemical engineering challenge; it is a feedstock and infrastructure puzzle touching agriculture, forestry, waste management, power systems, and CO₂ capture.

Ports & Bunkering: Infrastructure, Safety, and Standards

Compared with LNG or ammonia, methanol is relatively straightforward to integrate into existing liquid fuel terminals, but its toxicity and lower flash point demand rigorous safety management.

Outlook to 2030/2035: Market Share Scenarios

Long-term shipping decarbonisation pathways typically see methanol capturing a significant but not dominant share of global bunker demand, competing with ammonia, LNG, and advanced biofuels.

FAQ: Green Methanol, Maersk’s Strategy, and Project Bankability

Why have Maersk and others chosen methanol over ammonia or LNG?

Methanol offers a compromise between decarbonisation potential, technological readiness, and handling complexity. It is a liquid at ambient conditions, can be burned in engines that are close to today’s designs, and leverages existing chemical logistics expertise. Ammonia and hydrogen have advantages in energy system modelling but require more radical changes to engines, safety systems, and crew training.

Is there enough sustainable feedstock to support large-scale green methanol for shipping?

In the near term, no single feedstock route is sufficient to fully decarbonise global shipping. Waste-based bio-methanol is limited by sustainable biomass availability, while e-methanol depends on large quantities of low-carbon electricity and CO₂. However, a diversified mix of routes can still supply tens of millions of tonnes per year, especially if shipping shares infrastructure with other sectors such as chemicals and aviation.

How sensitive are methanol projects to renewable power prices?

E-methanol production costs are highly sensitive to the levelised cost of electricity. A change from 30 to 60 USD/MWh can easily shift fuel costs by several hundred USD per tonne. Bio-methanol is less exposed to power costs but more exposed to biomass pricing, competing uses, and logistics.

What carbon intensity reductions can green methanol deliver compared with VLSFO?

Well-to-wake GHG reductions in the range of 60–90% are achievable depending on feedstock, process energy, and allocation rules. Waste-based bio-methanol and e-methanol powered by additional renewables with sustainable CO₂ sourcing can reach the upper end of this range; crop-based or fossil-CO₂-based routes sit lower.

How do shipowners manage the risk of green methanol price volatility?

Project structures often combine long-term offtake agreements with price indexation to power costs, carbon prices, or fuel indices. Charterers and cargo owners may share some of the green premium via green corridors, surcharges, or contract-of-carriage clauses linked to emissions intensity.

Can ports recover their investments in methanol bunkering infrastructure?

Ports typically see methanol infrastructure as part of a broader decarbonisation and competitiveness strategy. Cost recovery may come from a mix of bunker fees, storage charges, and increased throughput from green corridors. Public co-funding and development bank support can help de-risk first movers.