Green Methanol Ships Market Assessment, By Ship Type [Cruise Ships, Container Vessels, Bulk Carriers, Tankers, Dry Cargo Ships, Tugs and Workboats], By Fuel Type [Single Fuel, Dual Fuel], By Sales Channel [Newly Built and Linefit, Retrofit], By Region, Op

Global green methanol ships market is projected to witness a CAGR of 29.94% during the forecast period 2025-2032, growing from USD 3.12 billion in 2024 to USD 25.36 billion in 2032. The market has experienced significant growth in recent years and is expected to maintain an expansion in the coming years owing to the growing regulatory pressures for decarbonization, advancements in technology, and favorable supportive regulatory frameworks. Strict environmental regulations imposed by bodies such as the International Maritime Organization (IMO) urge shipping firms to switch to cleaner fuels to adhere to emission standards and achieve sustainability objectives. This regulatory pressure is an aspect of a larger worldwide effort aimed at decarbonization, as numerous companies acknowledge the necessity to move towards low-emission fuels. The low carbon profile of green methanol makes it easy for firms to adopt and deliver their environmental, social, and governance (ESG) commitments. In addition, advancements in technology comprising dual-fuel engine technology and methanol-compatible propulsion systems support this shift, enabling ships to run on both traditional and methanol fuels while offering flexibility in operation. Moreover, methanol bunkering facilities at major ports are important to support the adoption of green methanol as a maritime fuel by improving the availability and reliability of fuel for shipping firms. For instance, in April 2023, DNV AS became a part of a working group focused on methanol bunkering, which is overseen by the Standards Development Organization at the Singapore Chemical Industry Council (SCIC-SDO).

Furthermore, increasing investments in producing renewable methanol from biomass and green hydrogen sources are enhancing fuel accessibility while lowering expenses, rendering green methanol a more feasible substitute for conventional marine fuels. Overall, with these drivers, green methanol is positioned clearly as a major contributor to sustainable maritime operations in the forecast period, aligning with global efforts to decarbonize the shipping industry.

Supportive Regulatory Frameworks is Expanding the Market Demand

The growth of the global green methanol ships market is being significantly influenced by increasing supportive regulatory frameworks. Regulatory frameworks implemented by the European Union (EU) are creating a favorable environment for the adoption of green methanol as marine fuel. The Fuel EU Maritime Regulation and Emissions Trading System (ETS) by the EU aims to minimize greenhouse gas emissions in the maritime sector while imposing progressively strict penalties regarding fossil fuels. For instance, operating and non-compliance costs of using traditional fuel such as Very Low Sulfur Fuel Oil (VLSFO) will grow exponentially with bio- and e-methanol being highly viable options due to their competitive pricing and lower environmental impact. Moreover, through the interim guidelines of the International Maritime Organization for ships using methanol propulsion have paved the way for ship owners to order methanol-fueled vessels. Additionally, countries like Canada are taking proactive steps by integrating green methanol into their environmental goals and investing in necessary infrastructure. Overall, these supportive regulatory frameworks mitigate compliance risks for shipping companies and stimulate demand for green methanol, positioning it as a key player in the transition towards sustainable maritime operations.

For instance, in October 2024, international Methanol Seminar, organized by NITI Aayog in India and the Methanol Institute in the USA, focused on the significance of methanol in the global energy transition. It also emphasized the promotion of methanol as a low-carbon fuel for green shipping.

Technological Advancements Propelling the Global Green Methanol Ships Market Growth

Advancements in technology have played a vital role in pushing the global green methanol ships market forward. The major development was the introduction of large-scale engines specifically designed to run on green methanol, such as the MAN B&W ME-LGIM (Liquid Gas Injection Methanol) two-stroke dual-fuel engine, which represents a major step in sustainable shipping technology. It can also run on traditional fuels, offering more flexibility with an easier transition for shipping companies wanting to cut carbon footprints. Moreover, leading shipping operators such as A.P. Moller-Maersk A/S are making substantial investments in dual-fuel vessels with advanced methanol engines. Maersk has placed multiple orders for the construction of ships capable of sailing on green methanol alone, which constitutes a significant milestone in decarbonizing the fleet, this will inspire others in the industry, thus developing a market for methanol-powered vessels. Also, the development of infrastructure for methanol bunkering is an advancement in engine technology, important for supporting this market's growth. The combination of proven engine technology, significant investments from major shipping firms, and expanding bunkering infrastructure creates a robust ecosystem that supports the widespread adoption of green methanol in maritime operation

For instance, in March 2023, Hyundai Samho Heavy Industries Co. and HJ Shipbuilding & Construction Co. (HJSC) placed orders for seven- and two-MAN B&W G80ME-LGIM dual-fuel engines, respectively, as part of the construction of nine 9,000 TEU container vessels for HMM Co., a leading integrated logistics company in South Korea.

Dominance of Dual-Fuel Type in Global Green Methanol Ships Market

The dual-fuel segment is emerging as a dominant segment in the global green methanol ships market, as it offers flexibility and sets a pace for compliance with environmental regulations. The present dynamic growth of this segment has found robust growth with shipowners who want solutions that use both conventional engines and green methanol. A dual-fuel engine transitions into low-carbon technologies while maintaining the flexibility needed for the continued operation of maritime operators. Advancement in engine technology allows combustion efficiency and smooth switching between fuel types, making dual-fuel systems more attractive. In addition, government incentives and collaborations between engine manufacturers and shipbuilders are accelerating the adoption of dual-fuel systems, further enhancing their market presence. Overall, the dominance of dual-fuel technology in the green methanol ships market reflects a strategic response to the challenges of decarbonization and sustainability in maritime operations.

For instance, in November 2024, China Marine Bunker (PetroChina) Co. Ltd. (CHIMBUSCO Jiangsu) reached an important milestone by successfully fueling the new methanol dual fuel powered 1300TEU container ship NCL VESTLAND. This vessel was developed by China COSCO Shipping Corporation Limited and CHIMBUSCO Jiangsu, with 79.5 tons of methanol supplied at Sanfu Shipbuilding in China.

Asia-Pacific Dominates Global Green Methanol Ships Market Share

Asia-Pacific is poised to dominate the global green methanol ships market accompanied by several factors that provide high support for decarbonization initiatives, rapid industrialization, increasing trade volumes. Countries like China, South Korea, and Japan are at the forefront of methanol-based vessels with their large shipping industries and desire to reduce greenhouse gas emissions. China is anticipated to be the largest producer and consumer of methanol. Increasing investments in methanol production capacity and the development of bunkering infrastructure further support the growth in the region. Such investment is crucial in increasing the supply or availability of green methanol aligning with global sustainability goals. Major shipbuilding companies in South Korea and China, are actively constructing their green methanol vessels. Moreover, supportive regulatory frameworks are encouraging the maritime industry in Asia-Pacific to transition towards sustainable fuels. The region's focus on innovation in sustainable fuel technologies positions it as a leader in the green methanol market.

For instance, in December 2023, A.P. Moller-Maersk A/S launched the first of its 18 large methanol-enabled vessels. On 9 February 2024, it entered service on the AE7 string connecting Asia and Europe, with Ningbo, China, being its first destination.

Future Market Scenario (2025 – 2032F)

Regulatory authorities’ strict emission targets will give a boost to shipping companies in adopting green methanol solutions, thus accelerating the decarbonization drive.

With ongoing investments in renewable methanol production and infrastructure, green methanol will emerge as a viable solution for future shipping requirements.

Advancements in dual-fuel technologies and the growth of methanol bunkering infrastructure will aid the shift to sustainable fuel.

Key Players Landscape and Outlook

The global green methanol ships market is characterized by a dynamic landscape of key players and a positive outlook for future growth. Major companies leading the market are developing and manufacturing vessels, using green methanol by innovating dual-fuel technologies that have gained prominence as people seek green shipping. This growth is driven by strict environmental regulations set by the international bodies, pushing shipping firms towards low-emission fuels like green methanol. In addition, ongoing investments in the technology development of renewable methanol production and infrastructure development in methanol bunkering are improving the viability of this fuel. Companies are increasingly recognizing the importance of aligning with global decarbonization goals, which further supports the adoption of green methanol technologies. Overall, the landscape for the global green methanol ships market is poised for significant expansion, with key players actively contributing to innovation and sustainability in maritime operations by acquisition, mergers, collaborations and new product launches.

For instance, in November 2024, China COSCO Shipping Corporation Limited and Freepoint Commodities have signed a memorandum of understanding (MoU) focused on the production of green methanol. According to the agreement, the two parties are dedicated to enhancing their collaborative efforts in the field of maritime green energy.