Port of Houston expects ammonia and methanol to feature highly in the 2050 sustainable fuel endgame

This content is part of the WPC 2025 series, where we explore key themes from the 40th annual World Petrochemical Conference.

The interest in sustainable maritime fuel is "loud and clear" and continues to solidify, Andy Morgans, Sustainability Program Manager at the Port of Houston said at the World Petrochemical Conference in Houston.

During a panel discussion on low-carbon fuels and the potential for methanol and ammonia to be industry game changers, Morgans added that ammonia and methanol will feature highly in the 2050 sustainable fuel endgame.

He highlighted that over 80% of global trade is done by sea and over 200 facilities utilize the Port of Houston specifically.

Morgans noted that alternative fuel is a challenging business case, with only 2% of the world's shipping fleet currently using alternative fuel. In line with this, he explained that current infrastructure is limited and present demand focused on LNG, which he described as "the lowest hanging fruit" of all the alternatives that may be available.

However, Morgans emphasized that there is strong customer interest in local low-carbon fuel supply and strong future growth potential, citing that in 2021 consultations undertaken by the Port of Houston identified 99 new initiatives supported by stakeholders.

Success is linked to having the flexibility to operate today on conventional fuel but in the next "20 or 25 years" on sustainable low-carbon fuel.

"US policy may be uncertain but regardless there is international certainty," with the International Maritime Organizationn expected to put out binding regulations on clean fuel standards and the price of carbon in October 2025.

The shipping industry will not put all its eggs in one basket and will pursue different pathways depending on operational needs and circumstances, Morgans added.

Platts, part of S&P Global Commodity Insights, last assessed March spot methanol at 100 cents/gal FOB USG on March 19, down 4 cents on the day. Meanwhile, ammonia was last assessed stable on the day on March 19 at $460/mt CFR USGC.

Clear regulation and project financing, core to growth

Regulation will remain the key demand driver for synthetic fuels like eMethanol, said Rahul Malik, Consulting Manager at SPGCI, with the most significant challenge being the cost of production.

eMethanol could be used as a sustainable fuel in shipping, aviation, or road transportation due to its low carbon intensity and compatibility with existing infrastructure, but the cost of production remains prohibitively high.

Thus, governments will need to "initiate and moderate" the regulatory landscape to build up demand. Producers "need financing" to derisk projects, "otherwise no one will commit," Malik said.

While 398 projects for low-carbon ammonia have been announced, about 15% are 60% likely or more to move forward, said Ella Mukerji, Head of Nitrogen Analysis at SPGCI, highlighting a disparity between hypothetical capacity and actual production.

Another important consideration is the low energy density of ammonia, which offers "essentially half" the density of conventional fuels, meaning the energy content per dollar spent is less efficient than current bunkering alternatives.