Ethanol gaining favour as European bunker fuel

Spanish Market: Biofuels, Oil products, Petrochemicals
27/10/26

Ethanol is gaining traction as a bunker fuel for methanol-fuelled vessels seeking to meet EU regulatory requirements, because ethanol-methanol blends can offer a lower-cost alternative to pure biomethanol.

Ethanol can be used in methanol-fuelled engines with little or no modification. This has attracted interest from shipowners, because ethanol is cheaper than biomethanol and can be used in blends to reduce overall fuel cost. Companies including WinGD, Everllence and Wartsila have conducted successful tests using biomethanol and ethanol blends, as well as 100pc ethanol.

In May, Rotterdam port completed its first ethanol-methanol blend bunkering operation. Barcelona port had its first 100pc-ethanol bunkering in July, carried out by Danish shipowner Maersk, which has undertaken its first 100pc ethanol voyage in the first quarter of the year.

There are 161 methanol-fuelled ships operating, according to Norwegian classification agency DNV, which began including ethanol-fuelled vessels in its tracking in the first half of this year. The number of methanol-fuelled vessels is set to reach 448 by 2030, DNV said.Ethanol is cheaper and has a higher volumetric energy content than biomethanol.

In September, average 75pc greenhouse gas (GHG) crop-based saving ethanol fob Amsterdam-Rotterdam-Antwerp (ARA) range was at an average €995/m³, or €37/GJ. This is compared with more than €896/t or €56/GJ for biomethanol in the same period. The average value of conventional methanol was just over €434/t or €27/GJ in September. Ethanol's volumetric energy content is 26.6 GJ/t (21 GJ/m³), compared with methanol and biomethanol at 16 GJ/t (12.6 GJ/m³).

The economics are further improved by the duty treatment of marine fuel. Ethanol imported to the EU for use as bunker fuel pays no duties, while material supplied for the European road-fuel market faces standard duties of €192/m³ for undenatured ethanol and €92/m³ for denatured ethanol, unless preferential trade arrangements apply.

Blending ethanol with biomethanol can lower overall cost and increase energy density. Biomethanol provides the greenhouse gas (GHG) reduction required for FuelEU compliance, which first generation ethanol — produced from sugar, wheat or corn — cannot.

FuelEU requires a 2pc reduction, rising to 6pc in 2030. Ethanol can also act as a substitute for marine gasoil (MGO) in emission control areas (ECAs) because of its low sulphur content. Blending trials involving biomethanol and very-low sulphur fuel oil (VLSFO) or marine gasoil (MGO) had faced technical challenges, specifically related to the flash point of the final product, participants said.

Demand for marine ethanol could rise further in the coming years. In the Netherlands, a key bunkering market, waste-based ethanol and biomethanol made from feedstocks categorised under Annex IX Part A of the EU renewable energy directive would be eligible to generate Dutch marine ZRE tickets. This could incentivise marine fuel suppliers to keep marine waste-based ethanol and biomethanol prices competitive with non-ZRE eligible fuels, in order to generate enough ZREs to meet their annual obligations, and avoid securing expensive ZREs from over-compliant peers. It could also offer an alternative route to ZRE generation beyond advanced Fame biodiesel, the most common ZRE-eligible fuel currently bunkered in the Netherlands.

Argus assessed ZREs at 21.75c/kgCO2e on Monday, 26 October. For one tonne of waste-based ethanol with 90pc GHG savings, this would roughly generate ZRE tickets worth $556/t.

By Natália Coelho, Toby Shay, Madeleine Jenkins and Hussein Al-Khalisy

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27/10/26

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Fire reported near Saudi Arabia’s Ras Tanura complex

27/10/26

Fire reported near Saudi Arabia’s Ras Tanura complex

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Sabic expects petchem project delays in the Middle East

27/10/26

Sabic expects petchem project delays in the Middle East

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International fossil fuel finance down under Cop pledge

27/10/26

International fossil fuel finance down under Cop pledge

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Climate plans improve but off track for 1.5°C goal: UN

27/10/26

Climate plans improve but off track for 1.5°C goal: UN

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