Author – Alisha Patil
Conventional shipping is responsible for around 3% of global greenhouse gas emissions and that’s expected to grow unless we change. The International Maritime Organization (IMO) has set tough climate targets—an initial goal of reducing emissions by around 40% by 2030 as compared to 2008 and deeper cuts by mid-century. In this gloomy scenario comes biomethanol, a low-carbon drop-in fuel that doesn’t require a complete redesign of a ship’s architecture. It’s liquid at ambient conditions, so storage and handling are relatively simple when compared to gaseous fuels such as hydrogen or ammonia.
Biomethanol is emerging as one of the most compelling levers in the decarbonization of both renewable chemicals and marine propulsion—a bit like dry ice in food processing: pragmatic, powerful, and often underappreciated. Based on my experience in commodity-based technologies, I can see biomethanol providing the same kind of transformational shift in shipping and chemical feedstocks. It stands out not because it’s futuristic but because it actually works, is scalable, and can deliver a feasible environmental solution.
From a lifecycle emissions perspective, biomethanol—i.e. methyl alcohol derived from biomass such as agricultural residues, municipal waste, forestry by-products or biogas—can cut CO₂ emissions by 60-95% compared to fossil fuels. Emission profiles for sulfur oxides and particulate matter decline by 95%, while nitrogen oxides see reductions up to 80%. That level of environmental benefit mirrors what I have seen when CO₂ was introduced into freezing applications: lower collateral damage, improved product integrity, and cost-effectiveness through collateral value.
The shipping industry is waking up to this eco-friendly fuel alternative. Waterfront Shipping, a subsidiary of Methanex, a global marine transportation company, demonstrated a net-zero voyage across the Atlantic Ocean by blending biomethanol with conventional methanol, achieving a truly carbon-neutral footprint. Meanwhile, global shipping giant Maersk has led with the methanol pivot: Laura Maersk, their first methanol-propelled container vessel, launched with dual-fuel capability and methanol tanks designed for long voyages. They now have 20 newbuild orders for methanol-enabled ships, many at 16,000 TEU scale, showing this isn’t a niche retrofit but an integral part of fleet planning.
A broader industry momentum is building up with around 350 methanol-capable ships expected to be launched by 2030. The EU’s FuelEU Maritime Regulation and the IMO’s upcoming carbon pricing and lifecycle labeling are making bio- and e-methanol increasingly attractive from a compliance standpoint.
Yet this narrative isn’t without tension. Cost remains stubbornly high: green methanol costs two to three times more than conventional fossil fuels. Supply is still limited—Maersk alone may need a million tons annually, but the current green methanol production remains in the tens of thousands of tons. Infrastructure such as the bunkering network lags behind demand as well. Maersk’s first low-carbon methanol ship, arriving in Los Angeles, found no green bunkers for the return journey.
Fortunately, innovation and policy are starting to fill the gaps. In Denmark, a new €150 million commercial-scale e-methanol plant has started up, producing 42,000 tons per year from renewable energy and captured biogas CO₂ – enough to power a 16,000 container vessel between Asia and Europe. A similar US Power-to-X project on the Gulf Coast has secured $100 million in federal funding and is targeting to produce up to 300,000 tons per year with over 90% CO₂ reductions. In India, Deendayal Port Authority of Kandla has ordered the establishment of the country’s inaugural port-based biomethanol production facility to manufacture around 10 tons of biomethanol per day.
Biomethanol has great potential in the field of renewable chemicals, even outside of shipping. It can be used as a platform molecule to produce formaldehyde, acetic acid, olefins, and synthetic hydrocarbons in place of methanol derived from fossil fuels. These chemicals are the building blocks for textiles, adhesives, plastics, and many other industrial products. Biomethanol basically decarbonizes the feedstock and has an impact on the entire chemical value chain. The circularity is interesting because it closes loops that the industry has been trying to align for years. And the loops are waste streams that used to end up in landfills or release methane, which are now being converted into feedstock for chemicals and fuels.
In many ways, biomethanol is creating its own momentum. The financing dimension will also be decisive. As carbon pricing frameworks get tighter and green finance instruments mature, biomethanol is bound to attract new capital. Banks, export credit agencies, and institutional investors are already preferring low carbon fuels and technologies, and biomethanol projects with offtake agreements are getting cheaper financing.
Furthermore, engine makers and shipyards are responding to the demand; ports are investing in alcohol bunkering infrastructure; renewable energy and waste-to-fuel players are scaling up production; and regulators are tightening emission constraints and floor pricing, thereby de-risking investments. According to Kings Research, the global waste management industry, comprising agricultural residues, municipal waste, forestry by-products and biomass is expected to generate a revenue of $657.55 billion by 2031.
To draw the parallel: as a marine-centric leader, you don’t sell cryogenic freezers without considering the CO₂ supply logistics, contract terms, and customer alignment. Similarly, the shipping and fuel ecosystem must treat biomethanol not as a transient commodity but as a cornerstone of future fuel architecture—with associated partnerships, investments, and geopolitics.
The geopolitical dimension of biomethanol is starting to emerge. Countries such as Brazil to India with biomass, renewable energy, and carbon capture are quietly building strategies to become net exporters of green methanol. This isn’t a green gesture; it’s the early days of a shift in global energy trade, just like LNG did two decades ago. For those who want to lead, biomethanol is more than a decarbonization tool – it’s a way to secure energy independence, industrial competitiveness, and strategic influence. The first movers won’t just reduce emissions; they’ll define the shape of leadership in the future fuel and chemicals economy.
As we head towards a future where shipping decarbonizes or disappears, biomethanol is a practical, scalable, and compliant pathway with visible deployments, growing infrastructure, and emissions reductions proven in real operations. Whoever gets biomethanol first—educates operators, certifies sustainable feedstock, synchronizes supply chain—wins on both environmental and market. And encouragingly, Maersk, Waterfront Shipping, GoodFuels (with 92% CO₂ reduction in ARA), and the pioneers in Denmark and Texas are already showing the way.
Author Bio: Alisha Patil is a budding writer and a bibliophile by nature, who has been honing her skills in market research and the B2B domain. She writes on topics related to innovation, technology, and the latest market insights.
