Three companies will kickstart methanol supply in the Port of Singapore from January 1, its Marine and Port Authority (MPA) said in a statement.

Singapore is the world's top bunkering hub due to its strategic location along the Strait of Malacca, having a well-developed infrastructure and access to refineries.

"This marks an important step towards establishing methanol bunkering at scale and driving Singapore's ambition to be a sustainable multi-fuel bunkering hub," the MPA said.

Global Energy Trading Pte Ltd, Golden Island Pte Ltd, and PetroChina International (Singapore) Pte Ltd were selected out of 13 firms that applied for licences since Singapore called for applications in March, MPA said.

They were chosen for the "reliability of their supply chains, operational readiness, safety systems, and the sustainability certification of the methanol to be supplied," according to MPA.

"The strong interest reflects the sector's growing focus on lower-emission marine fuels," it said.

The licences will be valid for five years to support "the early development of methanol bunkering by giving licensees sufficient scope to build capabilities, strengthen supply chains, and anchor initial investments as the market develops," it added.

Green methanol, or bio-methanol, is composed of waste carbon dioxide (CO2) and "green hydrogen", which is created by using renewable energy to split water molecules.

Compared to conventional marine fuels, green methanol has a lower carbon footprint, cutting emissions by up to 65 percent, according to shipping firms.

Global shipping -- which generally runs on diesel and other bunker fuels -- contributed to at least three percent of the world's greenhouse gas emissions, according to the latest statistics by the UN's trade and development body UNCTAD.

New guidelines by the International Maritime Organization said shipping emissions needed to be cut by at least 40 percent by 2030 and down to zero by around 2050 if the commitments in the Paris Climate Accords are to be achieved.