Shipping lines flirting with ethanol in pivot away from China to appease Trump could be bad news for our green bunkering ambitions. With maritime decarbonization ambitions suffering a significant blow after the Trump administration pressured the International Maritime Organization’s member states with tariff and sanction threats to ditch adopting its Net-Zero Framework to price maritime shipping emissions, Maersk is changing tactics.

Methanol’s dominance in the global maritime decarbonization strategy — and China’s place as the premier supplier of green fuels — is being challenged. The world’s second-largest shipping line successfully trialled a 50-50 ethanol-methanol mix for one of its vessels in December, with the aim of eventually using a 100% ethanol mix. Driving the pivot toward the use of bioethanol isn’t technical; it's geopolitical — while China is the clear leader in green methanol, the US is (not coincidentally) the world’s top producer of fuel ethanol. “If all the upside is only in China, then some countries will object,” Maersk CEO Vincent Clerc explained to the Financial Times.

This leaves Egypt’s multi-bn green hydrogen and methanol pipeline — projects led by Scatec, Fertiglobe, and Maersk’s own C2X — at risk. These projects were planned for a world that agreed on a carbon price higher than that offered by ethanol and had green hydrogen and methanol at the center of these plans.

Wrong fuel, wrong place

Egypt’s competitive advantage lies in its vast, uninhabited desert — but only if green hydrogen and methanol are what you’re gunning for. The country’s multi-bn National Low-Carbon Hydrogen Strategy and ambitious green bunkering ambitions centred around using solar and wind to create green hydrogen are a great fit for the country’s geography, but bioethanol is a very different animal, with less than 5% of the country cultivable.

SOUND SMART- Green methanol is an industrial fuel produced from green hydrogen and captured carbon dioxide, which requires only land to host solar or wind projects and a plant to create the fuel. In contrast, green ethanol is a biological fuel created through the natural fermentation of plant sugars by yeast — a process that requires thousands of acres of cultivable land and massive amounts of fresh water to grow the feedstock, or residues like used cooking oil and wheat straw. These commodities are much less plentiful in Egypt than the sun and desert land along the Red Sea.

The country is among the most land-constrained and water-scarce nations on earth, with food security understandably taking precedence over any green fuel export plans. Egypt can produce bioethanol at low levels for chemical exports, but scaling production to meet the needs of the maritime industry is a very different equation.

To put things in perspective, the Egyptian Bioethanol Company’s plannedUSD 135 mn,capacity Damietta plant would not even produce enough to power two 17k+ TEU vessels. To fuel a fleet, Egypt would not only need many more projects like this, but also — and more importantly — enough byproducts to fuel them or crops grown specifically as feedstock on limited agricultural land.

And even if Egypt could find the land, it can never compete on price against the US Midwest or the Brazilian interior. In those regions, ethanol is a commodity produced with massive economies of scale and rain-fed agriculture. Egypt’s agriculture is entirely irrigation-based, making its feedstock inherently more expensive.

But Egypt is not without options

While the US works to dismantle carbon emission reduction initiatives, the European Union is moving in the opposite direction with the Carbon Border Adjustment Mechanism — commonly known as CBAM. Although this levy may seem like an existential threat to fertilizer, cement, aluminum, and steel manufacturers, it simultaneously creates a sizable offtake market for those looking to launch green hydrogen projects in Egypt. Even before talk of green ethanol or votes to delay maritime carbon emission rules further complicated the country’s green bunkering ambitions, redirecting planned green hydrogen output to greening domestic manufacturing has been highlighted as a logical reaction to the lack of offtake demand abroad.

Egypt can also still sell — and earn from — fueling ships passing through the Suez Canal, even if the fuel wasn’t produced here. By partly repositioning as a regional processing and blending hub for ethanol, Egypt could still place itself in the value chain by importing ethanol and processing it into marine-grade fuel for passing ships. The country already seems to be working toward this with a USD 1 bn plan to build bunkering stations along the canal in the works, which should, in theory, be able to fuel any ship, whatever type of fuel it uses.

And beyond the recent hype around ethanol, methanol is still the maritime industry's main route to decarbonizing. While ethanol as a fuel source for cargo ships is just in early trial phases to assess feasibility, there are already 38 methanol-powered cargo vessels in service with another 186 on order, according to data from Alphaliner.

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