Tom Barlow-BrownA recent white paper commissioned by the Methanol Institute and authored by energy expert Dr. Jeroen Dierickx from iDefossilise concludes that the EU’s regulatory framework will drive the adoption of bio- and e-methanol as competitive alternatives to fossil marine fuels.
The study describes the impact of the FuelEU Maritime Regulation and the EU Emissions Trading System (ETS) in shaping a favourable economic landscape for renewable fuels. These regulations incentivise vessel operators to shift away from fossil fuels by imposing escalating penalties on non-compliance. By 2050, non-compliance costs could reach €1,997 per tonne of fossil fuel.
The white paper also highlights the progressive phase-in of the EU ETS, which will apply 100% to maritime emissions by 2026, with CO2 allowances priced at an estimated €100 per ton. ‘The findings confirm that EU regulations will strongly support the transition to low-carbon methanol fuels, enhancing their business case,’ said Gregory Dolan, CEO of the Methanol Institute.
Price forecasts for bio-methanol are set at €1,193 per tonne, while e-methanol is expected to drop from €2,238 to €1,325 per tonne after 2034. The study further outlines blending requirements, with renewable methanol fuels set to gradually replace fossil fuels, achieving 100% bio-methanol by 2050.
This regulatory framework is projected to create significant investment opportunities, providing stability for fuel producers through 2050.
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