While it offers a pathway to decarbonisation and significant environmental benefits, its unique properties and the nascent stage of its widespread adoption create a new and complex landscape of operational, legal and insurance risks.
Drivers of decarbonisation
Most change is driven by regulation. However, in shipping we should recognise that change is also driven by what charterers, end-customers, investors and financers want.
But in recent years, regulatory bodies have begun to take significant steps to align the maritime sector with global decarbonisation goals.
The industry has already seen the introduction of the IMO’s short term measures, perhaps the most prominent regulation being the Carbon Intensity Indicator (CII) as well as the extension of the European Union’s carbon trading system to include maritime transport. However, the uptake of alternative fuels is likely to be accelerated with the introduction of the IMO’s Net Zero Framework and the Fuel EU Maritime, which will be incentivising those who use lower and zero carbon fuels as well as penalising those who don’t. Whether the industry is in favour of these new regulations is of course contentious, but it has provided some needed certainty which can allow shipowners to think about their decarbonisation strategies in a more informed manner.
As of September 2025, DNV’s Alternative Fuels Insight indicates a robust order book: while LNG dominates, methanol also shows significant momentum with 75 vessels in operation and a further 43 on order, with numbers projected to increase notably over the coming five years. This illustrates the industry's hedged approach with early adopters readying their vessels for multiple fuel options (e.g., LNG, methanol) to manage the remaining uncertainties.
What is methanol?
Methanol (CH₃OH), also known as methyl alcohol, is a volatile, colourless, flammable liquid alcohol. It is a liquid at ambient temperatures and pressures, which makes it an attractive option as a marine fuel.
Methanol has traditionally been used in the production of plastics, paints, car parts and construction materials and is now emerging as an alternative fuel in several industries.
A colourful pathway
Although all methanol is chemically identical and burns the same way, it is categorised by its method of production and the feedstock. As such, not all methanol has ‘green’ credentials.
Brown Methanol: Produced using coal as a feedstock.
Grey Methanol: Produced using natural gas as both the feedstock and process fuel. This currently meets much of the global demand.
Blue Methanol: Produced using blue hydrogen (from natural gas) and captured carbon dioxide (CO2).
Green Methanol: Produced from biomass (bio-methanol) or through electrolysis using renewable electricity to produce green hydrogen and captured CO2 (e-methanol).
When considering full life cycle emissions (also known as ‘well-to-wake’ (WtW) emissions), a vessel burning brown and grey methanol will generate greater GHG emissions than conventional marine hydrocarbon fuels.
Green methanol, however, will offer significant greenhouse gas emission reductions. Therefore, the success of methanol as a marine fuel depends on the availability and cost viability of these types of methanol.
The regulatory framework
Methanol's legal status is a key consideration. While used as a base chemical for decades, its application as a marine fuel introduces new legal complexities.
The IMO’s Interim Guidelines for the Safety of Ships Using Methyl/Ethyl Alcohol as Fuel (MSC.1/Circ.1621) works in conjunction with the International Code of Safety for Ships Using Gases or Other Low-flashpoint Fuels (IGF Code). These provide a goal-based approach to the design, construction, and operation of methanol-fuelled vessels, focusing on minimising risks to the vessel, crew, and environment.
Major classification societies like DNV and ABS have developed their own rules and guides for methanol-fuelled vessels. These rules cover the technical aspects of design, construction, and equipment, and are often essential for securing appropriate insurance.
Methanol quality
The international standard ISO 6583:2024 establishes the fuel quality standard for methanol as a fuel for marine application. The standard provides for three grades: MMA (which has the most stringent requirements for lubricity and purity), MMB (which aligns with the quality standard of the International Methanol Producers and Consumers Association) and MMC (which has broader tolerances).
In their document ‘ISO 6583:2024: Methanol as a fuel for marine applications – General requirements and specifications’, CIMAC provide guidance on the international standard, addressing matters such as sampling and testing.
Advantages of methanol as a marine fuel
Methanol's popularity stems from several key benefits:
• Ease of handling: Since methanol is a liquid at ambient temperatures and pressures, it can be bunkered, stored, and transferred in a similar way to conventional liquid fuels. This requires only minor modifications to vessels, reducing capital costs for shipowners.
• Reduced emissions: Methanol is clean burning, therefore significantly reducing sulphur oxide emissions and particulates when compared with conventional marine fuels. Using green methanol considerably cuts GHG emissions.
• Fuel availability: Widespread industrial demand for methanol has led to increased production and availability worldwide.
• Technological readiness: Engine manufacturers MAN B&W and WinGD have both developed methanol-ready dual fuel slow-speed marine engines and Wartsila have several medium-speed models.
Operational challenges
Despite its advantages, methanol presents several challenges:
• Lower energy density: The energy density of methanol is approximately 2.4 times lower than residual or distillate fuels, which means either more storage capacity is needed, or the vessel must bunker more frequently. The former can reduce a vessel's cargo carrying capacity, whereas the latter can affect its range of trading area. However, methanol's energy density is greater than ammonia and hydrogen, which are also being explored as alternative fuels.
• Safety concerns: Methanol is corrosive and is also toxic, although not to same extent as ammonia. As such, methanol presents a risk to human health and the vessel. It burns with a near-invisible flame, which needs special fire detection and alarm systems. The low flashpoint of 11°C and an auto-ignition temperature of 440°C also requires strict safety protocols.
• Hygroscopic properties: Methanol readily absorbs water, which can be a common impurity and affect engine performance and cause system corrosion.
• Supply: There is a need for a significant increase in the production of green methanol to meet future demand, as well as the development of wider bunkering infrastructure. Other shore-side industries also compete for this fuel. China is rapidly developing its green methanol production, which is promising for shipowners opting for this fuel, but uncertainties remain.
• Engine-related issues: Early adopters have reported ‘teething problems’ with methanol engines, including issues with material selection and the reliability of some parts. These challenges are expected in the early stages of adopting a new fuel technology.
• Lubricity concerns: The lubricity (i.e., its ability to reduce friction and/or wear between moving surfaces) of methanol is poor compared to that of conventional marine fuels, and according to CIMAC it can be improved by using additives.
• Manning availability: Crew sailing on methanol fuelled vessels require training in accordance with the IGF Code and the IMO's Interim Guidelines for the Safety of Ships Using Methyl/Ethyl Alcohol as Fuel (MSC.1/Circ.1621). At this early stage, there is a shortage of certified and experienced officers, and the availability of approved training courses presents a further bottleneck.
Mitigating the operational and technical risks
Due to its hazardous nature, methanol storage on vessels needs to be carefully considered:
• Location: Methanol fuel tanks should not be located in accommodation or Category A machinery spaces.
• The fuel system requires specific tank coatings, pipes, and handling systems. Methanol system piping must be double walled in Category A machinery spaces.
• Cofferdams: Cofferdams with gas and leak detection are required around methanol tanks, except when they are next to the shell plating below the lowest waterline or bounded by other methanol tanks or the fuel preparation space. These cofferdams can be inerted or filled with water.
• Venting: Tanks must have a controlled venting system with pressure/vacuum (P/V) valves connected to a vent mast. The vapour space must be inerted, with the oxygen content not exceeding 8%.
• Extra equipment: Methanol systems require a supply of nitrogen for inerting purposes and will therefore likely the installation of a nitrogen generator.
• Fire Fighting: Tanks located on the open deck require a fixed water spray system and an alcohol-resistant foam fire-fighting system.
Bunkering methanol is similar to traditional fuels but requires additional safety measures due to its low flashpoint and toxicity. Key requirements include:
• A fuel transfer/bunkering permit from the port authority.
• Compatibility verification between the supply and receiving vessels.
• Certified hoses and connections with self-sealing, quick-release fittings.
• A Ship-to-Shore Link (SSL) for automatic and manual emergency shutdown (ESD).
• Adequate ventilation at the bunker station, which should be on an open deck or have mechanical ventilation.
Commercial and insurance risks
The use of methanol as a marine fuel will likely require a need to revisit standard charterparty clauses and other contractual agreements. Consideration should be given to matters such as:
• Bunkering and delays: The limited infrastructure for methanol bunkering could lead to delays or require additional port calls.
• Fuel quality issues: Methanol's hygroscopic nature and potential for impurities (e.g., higher alcohols, formaldehyde, and sulphur compounds) pose a new risk of engine damage. Consider addressing the required methanol grade, fuel quality standards (referencing ISO 6583:2024) and the sampling and testing protocols.
• Provenance: The new ISO 6583:2024 standard provides a technical basis for fuel quality, but it does not address life-cycle analysis. As such, consideration has to be given to proving the source of the methanol, whether grey, blue or green.
• Engine maintenance: Despite being a cleaner burning fuel, there is currently no suggestion that this equates to increased overhaul interval periods, as it is countered by the corrosive characteristics of methanol. Some early operational experience highlights the potential risk that methanol engines may require increased levels of maintenance.
• Speed and performance: An inability to burn methanol, either through lack of supply infrastructure or for technical reasons, could lead to an increased consumption of conventional marine fuel, such as MGO, which also has an impact on the vessel’s environmental reporting and rating. Furthermore, there is little experience on vessel speed and performance when running on methanol and how they compare with speed and consumption clauses in charterparties. It should also be remembered that pilot fuel, typically MGO, is needed to burn the methanol, and can be up to approximately 5% of the total combined fuel consumption.
Pollution risks
The pollution risk presented by a release of methanol into the sea differs to that of conventional marine fuels, especially the persistent residual fuels. While methanol is highly soluble and biodegradable in water, it remains harmful to marine life.
The pollution and spill advisory organisation ITOPF has issued guidance on the pollution risk of biofuels in their report: ‘FATE, BEHAVIOUR AND POTENTIAL DAMAGES & LIABILITIES ARISING FROM A SPILL OF METHANOL INTO THE MARINE ENVIRONMENT’, which can be found here.
ITOPF note that when spilled, methanol will float on water before quickly dissolving and diffusing into the surrounding seawater. However, a small fraction of the surface layer will evaporate and form a flammable vapour cloud, therefore introducing the risk of fire.
Similar to the concerns surrounding biofuels, the Bunkers Convention 2001 that holds shipowners strictly liable for pollution damage from bunker fuel, will be unlikely to apply as methanol does not fall under the definition of a ‘mineral oil’.
Find out more
Solis Marine were pleased to participate in the recent ‘Future Fuels’ event held in conjunction with Maritime London and Hill Dickinson where the operational, commercial and legal risks associated with the main alternative fuels were explored.
We have looked at other low carbon fuels in our series on biofuels, part one of which can be found here and part two here.
Our Engineering team at Solis Marine, who provide innovative design and engineering solutions for clean shipping, marine renewables and offshore projects, are at the forefront of industry’s efforts to decarbonise. Learn more here.