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From corn fields and cargo ships, early interest in ethanol as a marine fuel

Maersk, Vale and other shippers are using ethanol to reduce emissions. Its abundant supply and low cost make it more appealing than other fuels with lower carbon content. Further commercial use is expected to begin as soon as next year.

The use of ethanol for shipping could 'open up a new market for the fuel which is?in certain countries blended with gasoline. It also offers shipowners a way to reduce conventional fuel use in order to meet emissions reduction targets.

The global shipping industry is under increasing pressure to manage the uncertainty of oil prices as the hostilities in Middle East and the closure of the Strait of Hormuz - a vital waterway - highlight the risks of conventional fuel supply.

Chris Chatterton is a maritime advisor at the Global Centre for Green Fuels.

The unique thing about ethanol is that, in this context, it can be blended into methanol and used on vessels already equipped with methanol. This does not require a major retrofit or a capital investment to implement a single fuel strategy.

The shipping industry has been testing alternative fuels to oil, including ammonia and biodiesel.

ETHANOL TESTS ON SHIPS EQUIPPED W/METHANOL ENGINES

Maersk, a shipping group, completed its first two voyages using 100% ethanol last week. This follows earlier tests with 10% and 50% blends of ethanol on a vessel that was designed to run either on methanol or on fuel oil.

Maersk sees ethanol as an addition to methanol which has been gaining popularity in recent years?as a shipping fuel alternative, though green methanol is still in limited supply.

Maersk's spokesperson said that ethanol is a good candidate for exploration because of its established global market, existing infrastructure and similar properties to methanol.

Singapore-based shipping company X-Press Feeders has said that it also tested a marine fuel mixture consisting of 90% methanol and 10% ethanol on a container ship in Rotterdam.

Vale in Brazil, which transports iron ore by ship, has signed a contract with China's Shandong Shipping Corp for the construction of two vessels that can run on ethanol, heavy fuel oil, or methanol.

According to Everllence, a Swiss engine manufacturer, ethanol can be used in existing methanol compatible engines without major retrofits.

DNV data shows that the number of vessels capable of using methanol is expected to increase from 107 by 2025 to 450 in 2030. Around 313 of the 450 vessels on order are newbuilds.

Chatterton, GCGF's Chatterton, said that green methanol, derived renewable resources, faces near term supply constraints.

Chatterton stated that "Maersk is explicit in its assertion that methanol is one of the main challenges to scaling up alternative fuels. That is why ethanol has been introduced."

CORN AVAILABLE IN BRAZIL AND THE U.S.

The main feedstock for ethanol is corn. Top producers like the U.S.A. and Brazil have plenty of it. Methanol conventionally produced is derived from fossil-fuels.

As yields per acre increase, the U.S. Department of Agriculture projects a domestic corn supply of 17 billion bushels in 2025-2026. This is the highest ever.

The Renewable Fuels Association (a U.S. group of ethanol producers) said that if ethanol captured 5% market share in the marine fuels sector, it would increase corn demand by up to 1.5 billion bushels and demand for 4 billion to 5 billion gallons.

Growth Energy, a U.S. trade group for biofuels, has been lobbying for tax rules to encourage the use of more ethanol.

ETHANOL EFFICIENCY

Ethanol has around 35% more energy per kilo than methanol. This means that ships need less fuel to cover the same distance. The energy content of ethanol is still lower than conventional fuel oil, which requires about 50% more fuel to reach the same output.

Depending on the location and?volume of ethanol, it is comparable to low-sulfur fuel oil (LSFO), but cheaper than green methanol.

The U.S. Grains and Bioproducts Council reported that ethanol cost $700 per metric tonne on a U.S. loading base and more than $800 for imports from Asia as of early June.

Industry sources?said that LSFO in Asia costs more than $750 per tonne, whereas green methanol is easily priced at over $1,000 per tonne.

Chatterton anticipates that more commercial ethanol-bunkering operations will emerge in the next 12-24 months. The first to move are likely to be Brazil's Santos, and Singapore as a top bunker hub. Singapore is developing standards and infrastructure to scale up alternative marine fuels.

Rostom Merzouki is the global sustainability vice-president at ABS. He said that additional early activity in the U.S. Gulf will be linked to exports driven by ethanol supply chains.

Merzouki anticipates that the first-pilot operation in Northwest Europe will expand to other important bunker hubs by late 2020.

(source: Reuters)