Viewpoint: Japan eyes methanol as marine bridging fuel

: E-fuels, Hydrogen, Petrochemicals
24/12/18

Japanese demand for methanol as an alternative marine fuel is expected to increase, especially after 2027, but it is likely it will mainly be used as a transition fuel before the commercial launch of ammonia- and hydrogen-fuelled vessels.

The Japanese shipping industry is expected to launch more methanol-fuelled vessels from 2027 (see table), to help reduce greenhouse gas (GHG) emissions from the global maritime sector.

Global regulatory body the International Maritime Organization (IMO) in 2023 pledged to achieve net zero emissions in international waters by or around 2050.

To help achieve the IMO's target, a total of 26 methanol-powered vessels are expected to be commissioned worldwide by the end of this year, followed by 54 ships in 2025 and 96 carriers in 2026, according to a report released in November by Japanese classification society ClassNK. This would increase global methanol demand to 4.5mn t/yr by 2026, said the report. As of June, there are 33 methanol-fuelled vessels currently in use.

Methanol-fuelled vessels can refuel at around 130 major ports all over the world, except in Japan, according to Japanese shipowner Mitsui OSK Lines (Mol). The city of Yokohama in the eastern prefecture of Kanagawa, in co-operation with Mitsubishi Gas Chemical (MGC) and Maersk, launched a study on methanol and green methanol bunkering in the port of Yokohama in December 2023. Since then, the group, in collaboration with new partners — Japanese refiner Idemitsu, MGC's shipping subsidiary Kokuka Sangyo, domestic shipping firm Uyeno Transtech and Yokohama Kawasaki international port — has conducted a ship-to-ship bunkering simulation at the port of Yokohama in September.

Expectations of the increase in methanol use, especially cleaner e-methanol, have led Japanese firms to become more involved in upstream projects to secure the fuel. Japanese firms have invested in more than 10 e-methanol production projects both in and outside of Japan (see table), with the number of projects likely to increase, according to the ministry of economy, trade and industry.

Japanese firms are developing new carriers, but at the same time are also trying to modify existing vessels — which currently use fuel oil, LNG, LPG and methanol — to be able to burn renewable fuels such as biofuels, e-methane and e-methanol. It would be easy to increase the number of methanol-fuelled ships, given their relatively low initial or modification costs compared with LNG-fed vessels, according to Mol. Methanol is also a stable liquid at room temperature and atmosphere pressure, making it easy to transport and store compared to other alternative fuels, Mol added.

Fellow shipping company Nippon Yusen Kaisha (NYK line) is also mulling the development of smaller methanol-fuelled handymax ships that are unable to be equipped with large ammonia fuel tanks, to aid with decarbonisation.

Methanol a temporary solution

But Japanese firms see methanol mostly as a "bridging fuel" rather than a zero-emission fuel, as methanol can reduce GHG emissions only by 15pc compared to traditional bunker fuel, although it can curb sulphur oxide and nitrogen oxide emissions by up to 99pc and 80pc, respectively. It would be vital to begin introducing much cleaner marine fuels, such as ammonia and hydrogen, to meet the maritime sector's net-zero goal.

Tokyo is trying to promote the development of ammonia and hydrogen-fuelled ships by providing financial support, while the utilisation of such clean vessels could materialise from around 2030, the ministry of land, infrastructure, transport and tourism (Mlit) said.

Japan's state-owned research institute Nedo plans to provide ¥35bn ($229mn) to support the development of engines, fuel tanks, fuel supply systems and other core technologies for zero-emission ships that use hydrogen and ammonia, as well as LNG and e-methane, under its ¥2.76 trillion green innovation fund. But the grants are much larger than those for the development of methanol-fuelled ships, which are currently available only from Mlit and the environment ministry, with the amount of ¥100mn per vessel over two to three years. The scheme has been open for application every year since 2023. But the ministries' scheme also targets LNG-fuelled ships, with a breakdown of allotment for methanol-powered vessels unclear.

By Reina Maeda and Nanami Oki

Japanese firms' methanol projects
Methanol-fuelled ships
Company	# of vessel	Type	Target commercialisation	Announcement
Mitsubishi Gas Chemical, Mitsui OSK Line	1	Ocean-going methanol carrier	Jul-05	May-23
Toyofuji Shipping, Mitsubishi Heavy Industries	2	Ro-Ro vessel	2027-28 fiscal year	Jun-24
Mitsui OSK Line	1	Coastal methanol carrier	Dec-24	Jul-24
NS United Kaiun, Nihon Shipyard, Jaman Marine United, Imabari Shipbuilding	Multiple	Bulk carrier	After 2027-28 fiscal year	May-24
Orix, Tsuneishi Shipbuilding	2	Bulk carrier		Jul-24
Production
Company	Product	Country	Target commercialisation	Target capacity (t/yr)
Mitsui	E-methanol	US	Jan-24	1630000
Mitsubishi Gas Chemical	Bio-methanol	Japan	Jun-24	Small amount
Mitsubishi Gas Chemical, Kobelco	E-methanol	Japan	NA	NA
Cosmo, Toyo Engineering	E-methanol	Japan	NA	NA
Sumitomo Chemical	E-methanol	Japan	2030s	NA
Mitsui, Asahi Kasei	Bio-methanol	US	Jun-23	NA
Toyo Engineering	E-methanol	India	2030	NA
Investment
Company	Product	Country	Target commercialisation	Target capacity (t/yr)
Mitsui	E-methanol	Denmark	NA	42,000
Idemitsu	E-methanol	Brazil, US, Chile, Uruguay, Australia	2,030	4,000,000
JOGMEC	E-methanol	Brazil, US, Chile, Uruguay, Australia	2,030	4,000,000
Mitsu OSK Line	E-methanol	Brazil, US, Chile, Uruguay, Australia	2,030	4,000,000
Table source: Firm's company releases

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25/05/19

Phillips 66 vote could change company's course

Houston, 19 May (Argus) — Just four of Phillips 66's 14 board members are up for election at its annual meeting this week, but the outcome could shape the future direction of the US refiner and midstream operator. Activist hedge fund Elliott Investment Management has named four of its own candidates for the vote which will come to a conclusion on 21 May, part of its multi-year effort to push the company to sell assets and focus on core businesses. Elliott, which has amassed a $2.5bn stake in Phillips 66, contends that the company has consistently trailed its industry peers and needs to streamline operations, including spinning off or selling its midstream business, selling its stake in Chevron Phillips Chemical (CPChem), and possibly other assets. Phillips 66 has told shareholders that Elliot is pushing "an aggressive short-term agenda" that would cause disruption, slow momentum and jeopardize shareholders' investments. It says the Phillips 66 board and management team are implementing a "transformative strategy" that has delivered results, expanded its NGL business, improved its refining cost structure and continues to position CPChem as the lowest cost producer of ethylene. "We don't act out of fear or short-term trends," Phillips 66 chief executive office Mark Lashier said in a first quarter earnings call last month. "We act on what we believe will create the most long-term value for our shareholders each and every time." Turning up the heat Elliott alleges that Phillips 66 suffers from "continuous poor corporate governance" and "disingenuous shareholder engagement." Elliott said its proposals could push Phillips 66 stock to more than $200 per share. The stock was trading near $124 per share Monday morning. Elliott's campaign has grown more aggressive in the months leading up to this week's shareholder meeting. It includes launching a website dubbed "Streamline 66" with slide shows, podcasts, biographies of its dissident board nominees, press releases and information on how shareholders can vote by mail, phone or online. Elliott nominees include Brian Coffman, former chief executive at Motiva; Sigmund Cornelius, former chief financial officer of ConocoPhillips; Michael Heim, former chief operating officer of Targa Resources; and Stacy Nieuwoudt, former energy analyst at Citadel. Three top shareholder advisory firms [are backing the Elliott nominees](https://direct.argusmedia.com/newsandanalysis/article/2687988) in the proxy fight. Institutional Shareholder Services (ISS) and Egan-Jones are recommending all four of Elliot's dissident nominees, while Glass Lewis is backing three of the four — and supporting Phillips 66 nominee Nigel Hearne, a 35-year veteran of Chevron, because his experience "is more critical at this juncture". Phillips 66 pushback Phillips 66 has made some adjustments since Elliot started to agitate for change. In February 2024 it appointed former Motiva and Cenovus downstream executive Robert Pease to the board to address Elliott's concerns about a shift in focus from refining to midstream. And this year it agreed to sell off [some of its European retail business](https://direct.argusmedia.com/newsandanalysis/article/2688808), and expects about $1.6bn in pre-tax cash proceeds from the sale that it will use toward debt reduction and shareholder returns. But for the other Elliott recommendations to divest from midstream and sell its 50pc share of CPChem, Phillips 66 said the board has evaluated them and "came to the conclusion that neither action is in the best interest of long-term shareholders at this time". In additon to Hearne, Phillips 66's slate for the open board seats includes putting up Pease and current director John Lowe for re-election and nominating Howard Ungerleider, a former Dow president and chief financial officer. Current board members Gary Adams and Denise Ramos will not stand for re-election. Analysts with US bank TD Cowen said they "suspect Elliott could get some or all of its board members elected" and there could be larger board turnover next year if shareholders approve an Elliott proposal to require each director to submit a resignation to the board every year. The most likely outcome of an Elliott win is that the board "more deeply examines a midstream restructuring", TD Cowen said. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Infinium takes FID on 100MW Texas e-fuels plant

25/05/19

Infinium takes FID on 100MW Texas e-fuels plant

London, 19 May (Argus) — US project developer Infinium has taken a final investment decision (FID) on an e-fuels production plant in Texas, and has selected compatriot Electric Hydrogen to provide 100MW of proton exchange membrane (PEM) electrolyser capacity. Construction of Project Roadrunner, at Pecos, west Texas is underway, with commercial production due to start in 2027, Infinium said. The facility will make 23,000 t/yr of synthetic aviation fuels (e-SAF) and other e-fuels, specifically e-diesel for trucking and maritime industries and e-naphtha. This will make it the largest e-fuels facility in the world, Infinium said. Supply will be sold domestically and exported to international markets, it said. Infinium last year struck a 10-year offtake deal with UK-based International Airlines Group (IAG) for delivery of 75,000t of e-SAF to any of the group's airlines: Aer Lingus, BA, Iberia, Level and Vueling. The UK will introduce mandatory e-SAF quotas for the aviation sector from 2028, with the EU to follow suit in 2030. The 7,500 t/yr deal with IAG would cover roughly one-third of Project Roadrunner's expected output. Infinium also has a supply agreement with American Airlines, the developer said. Project Roadrunner will be fed with 150MW of wind power generation capacity from a subsidiary of Florida-headquartered NextEra Energy Resources, via a long-term power purchase agreement. Infinium said Electric Hydrogen's integrated 100MW PEM plant "will not only produce hydrogen for the e-SAF facility but will also have capacity to support future hydrogen offtake opportunities." Canadian asset management Brookfield in 2024 agreed to invest $200mn in Infinium, and specifically Project Roadrunner, in the short term, with potential further investments of $850mn for future projects. Project Roadrunner previously received conditional funding commitment of $75mn from the Bill Gates-founded Breakthrough Energy Catalyst. Infinium has not specified whether it intends to avail itself of the 45V hydrogen production tax credits, which could yield up to $3/kg of hydrogen. Start of construction would leave this possibility open even if a bill proposed by Republicans in the US House of Representatives goes through. The proposed bill foresees that tax credits would only be available for projects that start construction before the start of 2026. By Alexandra Luca Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU, UK to ‘work towards’ linking carbon markets

25/05/19

EU, UK to ‘work towards’ linking carbon markets

London, 19 May (Argus) — The EU and UK agreed to work towards linking their respective emissions trading systems (ETS), as part of their common understanding agreement concluded at a summit in London today. "The European Commission and the United Kingdom share the view that a functioning link between carbon markets would address many of the issues raised in respect of trade and a level playing field," the agreement states. A linking agreement should exempt both jurisdictions from their respective carbon border adjustment mechanisms, according to the common understanding, and the linked systems should cover power and industrial heat generation, and domestic and international maritime and aviation emissions. The statement specifically states that any link "should not constrain the European Union and the United Kingdom from pursuing higher environmental ambition". It also underlines that the UK ETS's supply cap and its emissions reduction pathway are "guided by" the country's Climate Change Act and nationally determined contributions to the Paris climate agreement, and that these should be "at least as ambitious" as the EU's. The UK has legally binding targets to cut its greenhouse gas (GHG) emissions by at least 68pc by 2030 and 81pc by 2035, both compared with 1990 levels. The EU aims to cut its net GHG emissions by 55pc by 2030, and is yet to set a 2035 target. Both jurisdictions are targeting net zero emissions by 2050, while they share the "same interests" in addressing climate change, commission president Ursula von der Leyen said today. Linking the systems would "save British businesses £800mn in EU carbon taxes", UK prime minister Keir Starmer said today, without specifying a timeframe for the savings. A study commissioned by a range of utilities and published last week found that linking the two systems would save up to €1.2bn on lower hedging costs resulting from improved market liquidity and lower bid-offer spreads. Today's agreement provides no timeline for linking the systems. The process to negotiate and link the Swiss ETS to the EU's scheme took almost 10 years. Alongside plans to work towards linking the EU and UK ETS, the jurisdictions also alluded in the agreement to continuing "technical regulatory exchanges" on energy technologies including hydrogen, carbon capture and storage and biomethane. And they will "explore in detail the necessary parameters" for the UK's potential participation in the EU's internal power market. By Victoria Hatherick and Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

PETCORE Europe Thermoforms: Collection is key

25/05/16

PETCORE Europe Thermoforms: Collection is key

London, 16 May (Argus) — Ahead of the Petcore Europe Thermoforms Conference in Dijon, France on 27-28 May, the technical manager of Petcore Europe's thermoforming working group, Jose-Antonio Alarcon, spoke to Argus about progress in the European tray-to-tray recycling market. Since we attended the annual event last year in Granada, Spain what has changed for the market? We don't see big changes. Collection is mostly the same, but there have been some developments on recycling projects. The appetite for recycling of tray-to-tray is growing. We have seen more players coming to operate in the tray-to-tray market over the last year, and more capacity is expected to start during this year. Petcore are aiming to make an study of the state of play for the thermoform industry in Europe to have a clear view on the real market size and the final application usage. The distribution between the food contact and non-food contacts, and also between mono and multi-layer, are essential for us and will be discussed in France. Following on from the success of last year's conference, what topics and discussions are you hoping will come up at this year's event? We want to keep energising the market, and building on the momentum. We have five pillars in the thermoforming working group that will be represented at the conference supporting the initiatives in the market. The first one is collection and sorting. If the material is not collected, it is not sorted, it is not recycled, period. We will be visiting a state-of-the-art sorting centre where they separate bottles and trays into mono- and multi-layer streams. The main challenge is how can these best practices be expanded to the rest of Europe. The second is recycling technologies. This is important, because you cannot use the same technologies for recycling bottle and trays because the physical properties of trays are not the same as bottles. Trays are often thinner and more brittle, they generate more dust and need to be treated more gently. Third is food contact, because we need to get the food contact trays back and into the closed loop. The majority of tray packaging placed on the market is in food contact applications, but there is not currently much progress on separate tray collection. There is work to be done in that direction. Then we have design for recycling and standardisation. If you don't design properly for recycling, then it will be very difficult for the market to scale up. And lastly is communication. Consumers need to know that trays can be recycled just like bottles, and we need people engaged. We also have presentations from the European Commission and legislative specialists as this is an important factor in the outlook for the market. Last year there was no specific legislation dedicated to thermoforms. Now we have the Packaging and Packaging Waste Regulation (PPWR) that passed into legislation and has mandated recycle content targets. So is this a positive? There are some positives and negatives. Yes, in the PPWR there is mandated recycled content targets for contact sensitive and non-contact sensitive packaging that will directly impact the tray market. Of course, this should move more people toward the use of tray flake and towards separate collection for tray. One of the impacts of legislation is that a lot of countries are moving to deposit return scheme (DRS) collection on bottles, which is deducting a lot of bottle from the regular yellow bin collection. So there will be a higher proportion of tray coming from this collection which could be a good opportunity for the circularity of trays if this waste is managed properly. And the recycled content targets should give a demand boost to the tray-to-tray market. We also have recycled content targets into bottles from the Single Use Plastics Directive (SUPD) meaning more and more bottle flakes are going back to bottles so that's a good opportunity for tray flakes. PPWR targets 30pc recycled content for contact sensitive packaging and 35pc for non-contact sensitive packaging by 2030. Will Europe be able to reach these targets in the tray market? It could, and it is possible, but it is ambitious. At this time, we are a long way from that point on tray-to-tray and it is very complicated. If we look to the bottle market, these percentages are achievable. Around 70pc of bottles are collected on average in Europe, but less than 30pc of trays. If we achieve similar collection volumes for trays then around 30pc recycled content should be feasible. But it will be challenging. At the moment bottle flake prices are at a significant premium to the virgin PET, which is impacting demand particularly in thermoforming applications and other cost saving markets like strapping and fibre. What impact could this have for PET tray flakes? People try to minimise their impact on the balance sheet, bottom line so less competitive prices versus virgin for rPET bottle flakes and pellets could spur more interest in tray. And maybe with the additional demand for bottle flake or food grade pellets from legislation and recycled content targets, people are looking for an alternative source so that they're not having to compete with that bottle flake market. But for PETCORE the focus is not on cost, our intention is that every package place on the market is collected, sorted and recycled. Over the last 12 months, we've seen quite a few chemical recycling projects being delayed or deferred. Is the difficult business environment across the whole industry an additional challenge for scaling up tray-to-tray? Of course there are challenges. We need to look at how the bottle recycling market has changed in the past 15 years with collection, technology, volume, quality, capacity etc., and the tray market is much later in the in the evolution, so it will take some time in order to achieve a similar situation as the bottle market. Of course, we expect that the speed of acceleration to reach the point of maturity to be faster for trays because we can take some learnings from previous experiences. Five years ago, trays were considered a contaminant at bottle sorting plants, and what we see today is that trays have the possibility to be a properly recycled stream providing another outlet of waste for sorters and recyclers. We need the material to be collected and it will require investment of course. The current infrastructure may be sufficient if managed properly. To increase the number of streams collected and volumes there may not be the need to invest in new infrastructure but just to boost current infrastructures. Chemical recycling is also part of the picture. There is a place for everyone, and mechanical and chemical are absolutely complementary. At the end of the day, we need to try to recover as much material as possible, then minimise the use of virgin resources so we know streams that can be as effective as possible. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK establishes public energy company

25/05/15

UK establishes public energy company

London, 15 May (Argus) — The UK parliament has passed a bill establishing a publicly owned energy company, Great British Energy (GBE), to support the nation's renewable energy ambitions. The company, funded with £8.3bn ($11.02bn) over the current parliamentary term, aims to accelerate renewable energy projects, enhance energy security, and support job creation, the department for energy security and net zero (Desnz) announced on Thursday. GBE will invest in clean energy initiatives, including technologies such as floating offshore wind, and collaborate with private companies to expand renewable energy capacity. The government states the company will help stabilise energy costs by reducing reliance on fossil fuels. The bill includes £200mn for renewable energy projects, such as rooftop solar for schools, hospitals, and communities. It has also committed £300mn to develop the UK's offshore wind supply chain, supporting manufacturing of components such as cables and platforms. The legislation received approval from the devolved governments of Scotland, Wales, and Northern Ireland, enabling GBE to operate across the UK. Desnz secretary of state Ed Miliband is expected to outline GBE's strategic priorities "soon", specifying technology focus areas and investment criteria. The government sees GBE as a key part of its plan to transition to clean energy and stimulate economic growth through a "modern industrial strategy", it said. Industry body Energy UK welcomed the bill's passage. "[GBE] can play a vital role in making the government's clean energy ambitions a reality by attracting extra private sector investment," chief executive Dhara Vyas said. By Timothy Santonastaso Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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