The supply and feasibility of accessing and using green methanol is causing concern to shipping companies. Shipping giants who had initially sworn off LNG-fueled ships are deterred from fully investing in green methanol’s future and are placing orders to build vessels fueled by LNG instead. This change is further reflected in recent ship order data reported by TradeWinds, which shows that green methanol-fueled orders have slipped back this year while 109 LNG-capable vessels had already been ordered by June 2024.

In effect, this has meant that present fears over the supply of green methanol have negatively impacted the shipping industry’s efforts to go green. While shipowners may be keen to reduce carbon emissions, they cannot do so comfortably with fears about green methanol supply looming over their current shipbuilding orders. The slower production and supply of green methanol has also led to uncertainty around shipping carbon prices, causing shipping companies to become risk-averse and place orders to build LNG-fueled containerships, prioritizing stability in fuel supply and access over their commitment to green fuel.

Moreover, this switch to LNG-fueled vessels is likely not sustainable. Much like any natural resource, LNG supply is not endless and shipowners could face similar issues with LNG availability.

Most of the vessels being ordered today will only be operational in 2026 or even 2027 and 2028, given the nature and time needed to fulfill them. This will set the shipping industry back in terms of their net zero goals. However, if concerns over green methanol supply can be addressed quickly and efficiently, this need not have a significant impact on the industry’s ESG goals and 2050 targets.