THE GREEN FUEL RACE: LNG’S RESURGENCE AND THE “PAUSE” IN THE METHANOL RUSH

In the relentless journey towards the International Maritime Organization’s (IMO) Net Zero 2050 targets, the global shipping industry is witnessing a fierce duel between alternative fuel sources. If 2023 was hailed as the “Year of Methanol” with massive orders from giants like Maersk and CMA CGM, the 2024-2025 period seems to be tilting the scales back in favor of Liquefied Natural Gas (LNG). No longer viewed merely as a short-term “transition fuel,” LNG is asserting its position as the most practical, feasible, and economically secure solution amidst the prevailing uncertainty surrounding the supply of Green Methanol.

The Stalling of the Methanol Hype

Not long ago, Green Methanol was championed as the “holy grail” of the maritime industry. The reasoning was compelling: engine technology was mature, storage at ambient temperature was simple, and most importantly, it offered the potential for complete carbon neutrality if produced from renewable energy. However, the harsh reality of the supply chain has thrown cold water on this optimism. The core issue lies in supply availability. For Methanol to be truly “green,” it must be synthesized from green hydrogen and carbon captured from the atmosphere or biomass. Currently, the global production of green methanol is incredibly scarce, with production costs estimated to be three to four times higher than traditional Very Low Sulfur Fuel Oil (VLSFO).

Shipowners are facing a classic “chicken and egg” dilemma: Ordering Methanol-powered vessels is easy, but securing the fuel to power them is a different story. If a Methanol-capable ship is forced to run on Grey Methanol (produced from natural gas) or Brown Methanol (from coal) due to a lack of green supply, the Well-to-Wake emissions can be even worse than conventional diesel. This uncertainty regarding supply and pricing has caused many shipowners to hesitate, pausing their Methanol transition plans to reassess the landscape.

LNG: The Return of the Pragmatist

While Methanol struggles with infrastructure bottlenecks, LNG has quietly solidified its standing. Historically, concerns over “methane slip” (unburned methane escaping into the atmosphere) drew criticism towards LNG. However, with new generations of high-pressure dual-fuel engines, methane slip has been significantly mitigated. More importantly, LNG offers absolute logistical peace of mind. Infrastructure for terminals, bunkering vessels, and the LNG supply chain has been fully developed globally over decades. An LNG-powered vessel can easily refuel in Singapore, Rotterdam, or even Vietnam’s Cai Mep – Thi Vai without encountering obstacles.

Economically, LNG is currently winning by a landslide. LNG prices have stabilized following the energy shock of 2022. Compared to Green Methanol, which largely remains on paper or in small-scale pilot projects, LNG is immediately available at competitive operational costs. For shipowners, investing in LNG dual-fuel vessels is seen as a safe strategic move. Even without the immediate availability of Bio-LNG or Synthetic LNG (E-LNG), using conventional fossil LNG immediately reduces CO2 emissions by 20-25%, completely eliminates sulfur oxides (SOx), and minimizes particulate matter. This serves as a solid stepping stone to meet increasingly stringent IMO regulations and the EU ETS (Emissions Trading System) in the short to medium term.

Bio-LNG: The Passport to the Future

A crucial argument allowing LNG to turn the tables on Methanol is the seamless transition pathway to Bio-LNG. Unlike the need for complete technological overhauls or new ship designs, Bio-LNG is a “drop-in” fuel—meaning it can be blended with or completely replace fossil LNG in existing tanks and engines without any modifications. As the supply of Bio-LNG (produced from organic waste and biogas) scales up, existing LNG vessels will automatically become “greener” without requiring additional capital expenditure (CAPEX). This transforms current LNG ships into highly liquid assets with extended lifespans, mitigating the risk of them becoming technologically obsolete “stranded assets.”

Market Perspectives and Lessons for Vietnam

Data from maritime brokerages indicates that in the first half of 2024, the order book for LNG-powered vessels surged once again, particularly in the large container ship and Pure Car Truck Carrier (PCTC) segments. This reflects the pragmatic mindset of shipowners: They need a solution that is “good enough right now” rather than waiting for a solution that is “perfect in the future” but currently elusive, like Methanol or Ammonia.

For Vietnam, this trend opens up strategic opportunities. Situated on the vital Asia-Europe maritime route, developing LNG terminal infrastructure (such as the Thi Vai and Son My projects) not only serves national energy needs but also positions Vietnam to become a new LNG Bunkering Hub in the region. Embracing the LNG trend allows Vietnam’s logistics industry to stay in sync with the global fleet’s direction while avoiding the risks associated with premature investment in fuel infrastructures that have yet to be commercially proven at scale.

In conclusion, while Methanol remains a bright candidate for the long-term future, in the present and medium term (the next 5-10 years), LNG is proving itself to be the “king” of the transition phase. The resurgence of LNG is not a step back for green ambitions, but a necessary market correction to balance environmental ideals with the vital reality of economic efficiency.