A recent study reveals that the United States has enough spare capacity in ethanol production to make a significant impact on the global marine fuel market. This development offers shipowners an alternative fuel option as the number of vessels capable of using methanol increases.
The report, titled Marine Ethanol: Unlocking the US Opportunity, was released by the Maritime Ethanol & Methanol Alliance (MEMA) on Wednesday. It suggests that ethanol could be used in current methanol dual-fuel engines and bunkering setups with relatively minor adjustments. This could help address concerns about the availability of low-emission methanol.
The study mentions that over 300 vessels capable of using methanol are currently operating or on order. This represents a potential market for ethanol, whether used as a standalone marine fuel or mixed with methanol.
The U.S. is particularly well-suited to meet this demand. American ethanol plants can produce around 18.5 billion gallons each year, while actual production was about 16.4 billion gallons in 2025. This leaves around 2 billion gallons of excess capacity.
The United States accounts for slightly over half of the world’s fuel ethanol production and exports to around 80 countries. An established distribution network, including Gulf Coast terminals near key bunkering locations, supports this trade.
According to the report, supplying just 1% of annual shipping fuel consumption would need about 1 billion gallons of ethanol, which could be covered by the U.S.'s existing spare capacity. A 5% market share by the mid-2030s would require about 5 billion gallons annually, leading to the need for increased production or changes in current demand.
These findings come as ethanol is starting to transition from pilot projects to commercial shipping operations.
In September, A.P. Moller-Maersk successfully conducted the first publicly announced commercial ship-to-ship ethanol bunkering for a deep-sea containership in the United States. The operation involved the dual-fuel vessel Tangier Maersk, which received U.S.-produced corn ethanol in Houston.
The operation aimed to provide practical experience in sourcing, handling, bunkering, and utilizing ethanol as Maersk looks into additional fuel options for its expanding fleet of alcohol-capable vessels.
Engine developer WinGD later confirmed that the vessel sailed from Houston to New York using ethanol, marking the first operational use of its X-DF-M/E alcohol-fueled engine platform with ethanol.
The new study rates ethanol's readiness for technology at levels 8 to 9, indicating that the core technology is mature, though widespread commercial use is still in its early stages.
It also emphasizes ethanol's potential to reduce traditional air pollutants compared to heavy fuel oil. The report states that ethanol nearly eliminates sulfur oxide emissions, reduces nitrogen oxides by 40% to 94% depending on engine technology, and cuts down particulate matter by 90% to 99%.
These reductions relate to emissions from fuel combustion, not ethanol's overall lifecycle greenhouse gas emissions, which depend on many factors like feedstock, production methods, and supply-chain emissions.
The study also points out potential cost advantages, estimating the net production cost of ethanol—which factors in revenue from co-products—to be under $1 per gallon, although this figure does not reflect the delivered price of marine fuel.
However, significant challenges must be addressed before ethanol can become a widely traded marine fuel. These challenges include developing consistent fuel specifications, establishing reliable certification and traceability systems, and ensuring ethanol meets environmental standards set by upcoming shipping regulations.
“Ethanol is moving beyond pilot programs, and this study shows the United States has the production capacity and infrastructure to supply the shipping industry on a large scale,” stated Clarence Woo, managing director of the Global Centre for Green Fuels.
“The next challenge is consistency. As international bunkering expands, the shipping industry needs standardized and interchangeable marine fuel specifications, along with traceable feedstocks and a strong supply chain, so that ethanol from different producers and regions can be used confidently.”
This study comes at a time when the International Maritime Organization (IMO) is preparing for further discussions on its proposed Net-Zero Framework.
The Marine Environment Protection Committee of the IMO is set to meet from November 30 to December 3, with an extraordinary session planned for December 4, pending confirmation. These discussions may affect how alternative fuels are evaluated and integrated into future international shipping emissions regulations.
For U.S. ethanol producers, the marine fuel market represents a promising new demand source, while shipowners can access an established fuel supply chain without needing to wait for renewable methanol production to scale up.
However, the study’s forecasts are exploratory, and how well ethanol competes with other marine fuels will depend on several factors, such as its delivered cost, lifecycle carbon intensity, regulatory treatment, and acceptance in the market.
The full study can be found at the Global Centre for Green Fuels.