Shipping's slow start
Decarbonisation of the shipping industry has been slow with alternative fuels remaining limited. According to DNV’s barometer for green restructuring of shipping, there are 3785 ships in domestic traffic in Norway. Norway leads on emission-free ships with 112, which is equivalent to approximately 3% of the fleet.
Part of the reason is that there is no obvious replacement for the heavy fuel oil that ships have burned for decades. Owners are testing several cleaner options instead, including liquefied natural gas, ammonia, biofuels, batteries and methanol.
In this blog, we discuss e-methanol as a solution to reducing shipping emissions. Current uptake is low with large infrastructure and cost barriers to overcome, but with funding support and policy, e-methanol is a leading clean fuel for the sector.
E-methanol
E-methanol is a synthetic liquid fuel made by combining renewable hydrogen with captured carbon dioxide (CO2). The hydrogen comes from splitting water through electrolysis, powered by low-carbon electricity, and is then combined with CO2 to form methanol.
Its main practical advantage is that it stays liquid at ordinary temperatures, so it can be stored, transported and loaded onto ships far more easily than hydrogen or fuels that have to be kept very cold.
How clean it is depends on where the carbon dioxide comes from. Methanol releases CO2 when burnt, so the fuel only counts as low carbon if that CO2 was captured from the air, or from sustainable biomass and biogas, rather than from fossil sources. Capturing CO2 directly from the air is still a new and expensive industry, which limits the scalability of e-methanol.
Shipping fuel alternative market
No single fuel has emerged as the clear successor to heavy fuel oil, and each option comes with trade-offs. Here is where the main contenders sit, and where e-methanol fits among them.
Liquefied natural gas (LNG) is natural gas cooled into a liquid, so it takes up less space. It is the most widely used alternative fuel in shipping, cutting sulphur and some carbon dioxide against heavy fuel oil, but it remains a fossil fuel.
Ammonia contains no carbon, so it releases no CO2 when used, which makes it a strong long-term candidate. It is toxic and harder to handle, though, and engines and supply chains are still being developed.
Biofuels are made from renewable material such as used cooking oils and animal fats. They are sulphur-free and can often be used in existing engines, yet they can be expensive due to low energy densities and have feedstock limitations.
Electric batteries produce no emissions in use and already power smaller vessels such as tugs and short-route ferries. For large ocean-going ships, the batteries required would be far too big and heavy to be practical today.
E-methanol's appeal is that it is a liquid, is easy to handle, and runs in engines close to today's designs, which makes it one of the more practical options for larger ships alongside ammonia.
Projects and early adoption
Very few commercial e-methanol plants exist in the world today. Most projects are still at the planning or pilot stage, and global production remains small.
One leading operational plant is the Kassø facility in Aabenraa, Denmark, developed by European Energy with Mitsui & Co. Inaugurated in 2025, it was the world's first large-scale commercial e-methanol plant, producing around 42,000 tonnes a year from biogenic CO2 (from combustion or decomposition of biomass) and renewable electricity and cutting emissions by up to 95% against fossil fuels. Its output already supplies buyers beyond shipping, including LEGO and Novo Nordisk.
Shipping companies themselves have been slow to commit. Maersk is initiating a transition, having ordered a series of dual-fuel vessels that can run on methanol and taken its first e-methanol supply from Kassø, as part of its aim to be climate neutral by 2040. Across the wider industry, methanol orders remain low, with only two methanol-capable vessels ordered in the first half of 2026 (DNV).
What regulation means for e-methanol
Rules on shipping emissions are still at an early stage, but they are starting to take shape. The International Maritime Organization (IMO), the United Nations body that regulates global shipping, agreed its 2023 Greenhouse Gas Strategy, which commits the sector to reaching net-zero emissions by around 2050.
The IMO is now developing its Net-Zero Framework, which pairs a global standard for cleaner fuels with a price on the emissions that ships produce. Alongside this, the European Union's FuelEU Maritime regulation came into force in January 2025 and sets tightening limits on the greenhouse gas intensity of fuel used by larger ships calling at EU ports.
For e-methanol and other clean fuels, these developments signal support for the sector. However, regulations such as the IMO’s Net-Zero Framework are still in the early stages with limited binding regulations. The IMO’s framework decision has been delayed until 2027, which will slow clean fuel adoption for the sector.
Outlook
E-methanol has real potential as a marine fuel. It is easy to handle, runs in near-standard engines, and already has a working commercial plant behind it. Production is still small, shipping companies remain cautious, and how clean the fuel depends on a supply of captured carbon that is not yet available at scale. Direct air capture in particular needs far more investment if the market is to grow, and it is one of the areas we will be watching most closely.
As the fuel mix takes shape, demand is growing for people who understand both clean fuel production and shipping. At Mint Selection, we support this market across renewable developers, project developers, independent power producers and investors, spanning power-to-x, hydrogen and the wider energy transition. If your organisation is building capacity in e-methanol or alternative marine fuels, contact us at hello@mintselection.com.