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Focus on 'low-hanging fruit' for emissions reduction - Methanex

Tuesday 16th October 2018

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New Zealand has a lot of “low-hanging fruit” it can pursue now with known technologies to start reducing greenhouse gas emissions, Methanex New Zealand managing director Dean Richardson says.

The company, the country’s biggest user of natural gas, says the country has a “very ambitious” 2050 target for emissions reduction. But Richardson says the government appears to be  attempting a 50-year technology “jump” to achieve that when lower-carbon fuels and technology are available now, particularly in thermal energy for industry.

Methanol can remain part of that longer-term transition, he said, given it is now being made from renewable processes at some sites.

“The world sees methanol and gas as part of the solution whereas New Zealand currently is seeing gas as part of the problem,” he told BusinessDesk yesterday.

The government will today start hearing submissions on legislation to effect its ban on new offshore exploration and restrict onshore exploration to Taranaki. The ban, intended to signal a long-term transition away from fossil fuels, has created uncertainty around long-term gas supplies and reduced international interest in exploration here, critics say.

Vancouver-based Methanex is the world’s biggest maker of methanol, which is widely used in textiles, paints, building products and plastics. But the firm is selling more of its product in Asia as a fuel additive and as a replacement fuel to coal for use in boilers.

New Zealand accounted for more than a quarter of the firm’s global production last year.

Richardson was speaking yesterday after touring the 186-metre Taranaki Sun, one of seven dual-fuel tankers that runs on methanol, and which the group commissioned two years ago. The company’s tanker business, Waterfront Shipping, has another four such vessels under construction as part of a push into marine fuels that can be used as alternatives to fuel oil and diesel.

Methanex opted to run the vessels on methanol to meet new International Maritime Organisation fuel standards aimed at reducing sulphur emissions. They take effect from 2020.

Opting for that capability added about US$2 million to the US$50 million cost of each vessel, Richardson said.

New Zealand has yet to sign up for the new standards for domestic shippers. Most ships operating internationally will be captured by the new regulations.

Richardson said shipping firms will all face different choices about the fuel options they select. But, as a starting point, New Zealand should adopt the new standard.

Relative to other alternatives, like LNG or ultra-low sulphur diesel, methanol provides a small additional reduction in carbon dioxide emissions but a “dramatic” cut in emissions of polluting particulates and sulphur oxides, and greenhouse gas nitrous oxide emissions.

As a water-soluble, liquid fuel the port-side infrastructure for methanol is also relatively conventional, making it a viable alternative.

Richardson said using a New Zealand-made marine fuel would not only contribute to the country’s emission goals but would also add to its fuel security.

(BusinessDesk)

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