Towngas advances green methanol capacity despite International Maritime Organization (IMO) uncertainty

The Hong Kong and China Gas Co. is advancing plans to expand green methanol production capacity, according to a company executive, despite growing uncertainty over future demand due to the International Maritime Organization’s delay of its Net-Zero Framework.

The company, known as Towngas, has aimed to operate production facilities across China with a total capacity of 1 million metric tons by 2030 via a 50-50 joint venture with Foran Energy, VENEX, mainly targeting demand from shipping companies.

The IMO framework was designed to place a cost on maritime greenhouse gas emissions to promote a low-carbon bunker transition from 2028, but the UN agency’s member states this October voted to delay its adoption by a year amid strong US opposition.

Towngas has expected green methanol bunker demand to exceed 1.4 million mt/y in the next five years, of which 500,000 mt/year in the Greater Bay Area.

Despite the IMO uncertainty, Singapore and the EU have introduced regulations that will promote more low-carbon bunkering while China may soon follow suit.

In recent quarters, Towngas has sealed several preliminary and firm deals to upscale green methanol bunkering in Asia with bunker supply chain companies, either by itself or through VENEX.

Those companies include bunker suppliers SINOBUNKER, Chimbusco Pan Nation Petro-Chemical, SIPG Energy, Golden Island, Global Energy Trading, tank firm Vopak, marine equipment maker CIMC ENRIC, and waste management firm Veolia.