MSC looking at LNG and methanol retrofits

Mediterranean Shipping Company (MSC), the world’s largest ocean carrier by operated container vessel capacity, is exploring retrofitting projects involving various types of fuels including LNG and methanol.

The two solutions remain the key options for owners that want to act today on lowering their emissions as the technology is readily available and the bunkering infrastructure is in place. However, they are far from being the silver bullet as they are often described as transitional fuels or fuels in transition, as they embark upon a transition of their own.

Namely, LNG being generated from fossil fuels needs to transition to production from renewable electricity to remove well-to-wake emissions and methane slips and a similar case stands for methanol as well. That being said, the development of renewable, zero-emission fuels such as ammonia and hydrogen is lagging behind significantly seeing that ammonia-powered engines are not expected to enter the market at least by 2025 and that the production of these fuels might be decades away.

Nevertheless, maturing of technology is not expected to be the main hindrance in decarbonizing shipping, the issues stem from the (un)availability and production scalability of green fuels.

“We are going to need multiple fuels to fit the different applications of ship profiles and deployment itineraries, but we will also need the volume. Our commitment to LNG is very real but it starts with fossil LNG which is available at scale now and the technology is pretty mature for two-stroke and four-stroke engines. We want to progress onto bio or synthetic form of LNG for the future to keep that molecule viable toward our decarbonization pathway,” Bud Darr, Executive Vice President, Maritime Policy and Government Affairs, MSC Group said during a recent conference on Alternative Fuels hosted by DNV.

“Methanol also has a role to play and we are planning for that in our newbuilds that are not being primarily built to run on LNG so that we will be able to facilitate a transition to green methanol when it becomes available at scale, should that prove to be the best option.”

MSC has been investing heavily in LNG-powered cruise and container ships. In June 2022, the company took over its first LNG-fueled containership, MSC Washington. The LNG dual-fuel 14K TEU ultra large container vessel (ULCV), equipped with LNG fuel gas supply system (FGSS) by C-LNG Solutions, was built by Yangzijiang Shipyard, China. A month later, the company took over the second LNG-fuelled vessel from the batch MSC Virginia.

Speaking on potential retrofit projects, Darr said that barriers to retrofitting ships to run on methanol were significantly less from a technical and cost perspective when compared to LNG.

According to a study carried out by MAN and DNV, the overall cost of LNG retrofits would be 20 pct higher when compared to conventional fuels, while for methanol the price would be 10 pct higher.

Retrofitting is critically important, and MSC is looking at a diverse range of options and multiple fuels, including both methanol and LNG, Darr added.

MSC announced its interest in methanol a year ago when the company revealed it was joining the Methanol Institute together with Oldendorff Carriers saying that methanol might be one of the multiple solutions for the company’s fleet moving forward.

Methanol gained a regulatory advantage over hydrogen and ammonia when it secured regulatory approval for use as a fuel by the International Maritime Organization (IMO) in December 2020. It has been accepted by classification societies, flag, and port states as well as by vessel operators and charterers as a safe, compliant, and efficient marine fuel. 

“It is very important to keep an open mind on this and make the best investment choices today that leave us options as the situation evolves. Ultimately, neither ship owners nor engine OEMs are going to control the critical factor of which fuels make it into production in the largest volumes the soonest and how effective will they be, and whether the regulatory landscape would be able to accommodate their upstream benefits,” he went on to say.

LNG as a fuel has been dominating the orderbook of larger ships for quite a while now, with over 167 vessels from 1,000+ ships on order being LNG-fuelled LNG carriers and 370+ being LNG-fuelled ships of other types.

However, methanol seems to be catching up as container carriers push the uptake of the fuel in the sector. October alone saw a record-breaking 18 methanol-powered containerships ordered at South Korean and Chinese shipbuilders. The orders were placed by Maersk, COSCO and OOCL.

Currently, data from DNV shows that there are 20-dual fuel methanol-powered ships in operation and 64 methanol-powered ships on order with deliveries spread to 2028.