Green Methanol Market Size, Share & Industry Analysis, By Type (Biomethanol and E-Methanol), By Production Route (Power to Methanol, Biomethane Reforming, Biomass Gasification, and Waste to Methanol), By End Use (Chemical and Fuel), and Regional Forecast, 2024-2032

The global green methanol market size was valued at USD 350.9 million in 2023 and is expected to grow from USD 526.2 million in 2024 to USD 16,021.8 million by 2032 at a CAGR of 53.3% during the forecast period. Asia Pacific dominated the green methanol market with a market share of 8.51% in 2023.

Methanol is an emerging fuel in the petroleum industry and is currently produced mostly from fossil fuels. However, a shift toward renewable methanol, which is derived from biomass or synthesized from green hydrogen and carbon dioxide (CO2), is about to change the dynamics of the global methanol market. Renewable methanol could expand the use of methanol as a chemical raw material and fuel while helping industrial and transport sectors move toward net carbon neutrality goals. In the current scenario, the cost of producing renewable methanol is high and production is low. However, with the right policies in place, renewable methanol could be cost-competitive by 2050 or sooner depending on the market development. The life-cycle emissions of methanol produced and used account for around 0.3 Gigatons of CO2 per year, which is approximately 10% of the total chemical sector emissions. However, using various sustainable feedstocks such as biomass, waste, CO2, and hydrogen, even 100% carbon-free products can be achieved. Owing to such a promising scenario, it is gaining the attention of investors and market players operating in the global conventional methanol market, which is set to fuel the global market growth during the forecast period. 

The COVID-19 outbreak negatively impacted the fossil fuel-based methanol market due to the lockdown, which halted import-export activities globally. Lockdowns, travel restrictions, and economic instability caused disruption in supply chains and delays in key industrial activities, which reduced sales in 2020. However, green methanol is in the nascent stage of the product development cycle, thus having low to no impact of the pandemic. 

Green Methanol Market Trends

Momentum toward Sustainability and Circular Economy to Boost Sales Revenue

Momentum toward sustainability and growing emphasis on circular economy will create a progressive environment for the global green methanol market, which is poised to boost its sales revenue during the forecast period. The wake of rising carbon emission levels and growing temperatures, along with negative impacts on the environment, has forced government bodies and market giants from every industry to think about more sustainable and cleaner solutions. The attention is further driven by the need to avoid the rise in global temperature to no more than 1.5 Degree Celsius. To meet this target, net carbon-neutral emissions have to be achieved among all the industrial sectors by 2050. The product can be produced via bio-feedstocks and green hydrogen, which can significantly reduce greenhouse gas emissions such as sulfur oxides (Sox), nitrogen oxides (NOx), particulate matter, and others. In addition, the product can be easily used as a fuel without the need to change the existing vehicle engines. Methanol-powered vehicles can be a perfect alternative solution for the transportation industry. Therefore, the energy transition toward more sustainable alternatives and several benefits attached to green methanol are poised to create numerous opportunities in the market in the coming years.

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Green Methanol Market Growth Factors

Government Initiatives to Support the Growth of the Global Market

Renewable methanol can reduce up to 95% of carbon dioxide emissions, 80% of nitrogen oxide emissions, and 100% of particulate matter emissions compared to conventional fuels. It has the potential to be a major contributor to decarbonization in sectors where low-emission fuels are currently limited, such as chemical feedstock or as a fuel for road or maritime transport. Such promising factors have grabbed the attention of various government bodies across the globe and made various favorable policies to support the growth of the global market. For instance, in the past decade, in various places in China, the use of methanol as a gasoline blend has been mandatory, and its concentration in gasoline can range from 5% to 100%. In November 2016, Israel presented a new blend of fuel, the Fiat 500 M15, which is made up of 85% gasoline and 15% methanol and is capable of 2% CO2 reduction while maintaining the vehicle’s performance. Similarly, other countries such as Egypt, India, Italy, New Zealand, and others are evaluating various blends of methanol with gasoline to introduce fuel with a low carbon footprint without affecting performance. Such government initiatives on a global scale are expected to support the green methanol market growth.

RESTRAINING FACTORS

High Production Cost May Impede the Market Growth

Though green methanol seems a promising solution, the high cost associated with its production and low-scale production are restraining its market growth. The cost of production of bio-methanol significantly varies depending on the cost of feedstock, investment costs, and the conversion efficiency of the process. In the present scenario, the cost of feedstock for biomass and MSW ranges from USD 0 to USD 17 per Gigajoule (GJ). For MSW, the cost ranges from USD 0 to USD 6/GJ. For biomass, the cost is estimated to range from USD 320/ton to USD 770/t. Such high range deviation in prices of feedstock has hindered its market growth till now. In addition, the lack of biomass and low-scale production of green hydrogen is creating an extra layer of hurdles for market players. Thus, the high costs and various challenges associated with feedstock may impede market growth during the forecast period.

Green Methanol Market Segmentation Analysis

By Type Analysis

Biomethanol Segment Held Largest Share Owing to its Mass Production

Based on type, the market is segmented into biomethanol and e-methanol.

The biomethanol segment accounted for the largest global green methanol market share in 2023 and is projected to grow significantly during the forecast period. Biomethanol is currently the most produced type of product globally, making it the largest shareholder in e-methanol. It is produced using various types of feedstock, such as forestry and agricultural waste, biogas from landfills, sewage, municipal solid waste, and others. These feedstocks are easy to access, and the methanol produced through these raw materials is cheaper than the e-methanol, which has resulted in high demand for biomethanol. 

E-methanol is produced via renewable carbon dioxide and hydrogen, reducing carbon emissions to zero and making it an ideal alternate transportation fuel. According to the International Energy Agency (IEA), the transportation industry alone was responsible for over one-third of the carbon emissions in 2021; thus, finding an alternate solution is crucial. E-methanol reduces the carbon emission and can be used without making any changes to existing infrastructure. As a result, this segment is projected to grow significantly during the forecast period.

By Production Route Analysis

Power to Methanol to Become Primary Production Route By 2025 Due to Different Advantages

Based on production route, the market is classified into power to methanol, biomethane reforming, biomass gasification, and waste to methanol.

The power to methanol segment is set to account for the major share in the global market by the end of 2025. The growth is attributed to the several capacity expansion plans based on the power to methanol route. In this route, hydrogen and carbon dioxide are the key raw materials that lower the carbon emissions significantly. Due to its unique characteristics, hydrogen is considered an important ingredient of the decarbonization roadmap as it can be easily produced via electrolysis of water and burns cleanly. In addition, carbon dioxide can be captured using carbon capture technologies and can be sourced directly from the air. Attributed to various advantages, the power to methanol route is slated to emerge as the primary route to produce green methanol by 2025.

The biomethane reforming segment accounted for a significant share in the global market in 2023 and is projected to grow moderately during the forecast period. The growth is anticipated due to its heightened demand as a co-feed with existing natural gas facilities. Essentially, in biomethane reforming, biogas is reformed into syngas, which is further processed to produce biomethanol. The advantages of this route are easy production and availability of biogas, which is an essential feedstock for this production route.

By End Use Analysis

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Chemical Segment to Dominate Owing To Huge Product Consumption as a Raw Material

Based on end use, the market is classified into chemical and fuel.

The chemical segment accounted for the majority of share in the global green methanol market in 2023 and is poised to maintain its dominance throughout the assessment period. The growth is driven by massive consumption of methanol for the production of various chemicals. Methanol is a base material for many chemical compounds, such as acetic acid and formaldehyde, and its utilization has significantly expanded in the production of ethylene and propylene. The surging demand for methanol and growing preference for green biomethanol are slated to maintain the segment's dominance during the forecast period.

Green methanol is emerging as an ideal solution for fuel purposes. It is carbon-free and will allow end users to meet their carbon emission goals. Moreover, it is an excellent energy carrier which has increased its consumption as a fuel in factories and electricity generation. The product can be stored at room temperature with an indefinite shelf life. It can be used as a fuel for various vehicles such as road, marine, air, and others, which is expected to drive its demand significantly till 2032. As a result, the fuel segment is anticipated to grow substantially in the foreseen period.

REGIONAL INSIGHTS

Based on region, the market is segmented into North America, Europe, the Asia Pacific, and the rest of the world.

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The Asia Pacific region is set to become the largest consumer, surpassing the North American region by 2025. The huge shift is anticipated on the back of humongous capacity expansion plans in China, which is set to position the region at the top. For instance, according to the Methanol Institute, China is set to account for over 90% of the regional production and consumption by the end of 2025. In addition, China is already the largest methanol producer and consumer of fossil fuels. As a result, a nation already has a favorable condition for the market to flourish in the region.  

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The market size in North America stood at USD 273.5 million in 2023. The huge demand is attributed to the presence of leading biomethanol manufacturers, which meet the domestic demand coming from the chemical and fuel industry. The North America market is projected to grow significantly during the forecast period owing to huge investment plans by new and existing market players.

Europe has accounted for substantial demand for the product on the back of leading economies such as Germany, France, and the U.K., which are among the top 10 manufacturing superpowers. Along with a vast manufacturing base, according to the European Commission, Europe’s transport sector contributes nearly 5% to the EU’s total GDP. Biomethanol, being an ideal choice and momentum toward renewable energy are slated to drive regional growth.

The rest of the world includes countries such as Brazil, Mexico, Saudi Arabia, Egypt, and other important economies from Latin America and the Middle East & Africa. These countries have moderately low expansion plans compared to other regions, which is slated to result in slow growth during the forecast period.

List of Key Companies in Green Methanol Market

Key Players Emphasize Rapid Capacity Expansions to Strengthen Their Position

Alberta-Pacific Forest Industries Inc, ANDRITZ, Avaada Group, Cepsa, and Enerkem are identified as key product producers in the study of the market. As the market is in the nascent stage of the product development cycle, the global production of the product is very low. Hence, the market players are aggressively investing in the capacity expansion of green methanol projects to leverage the advantage of being a first mover. In addition, many companies are coming together in collaboration to utilize each other’s technology to integrate an efficient production plan. Projects are also dependent on the availability of raw materials in their local regions to maintain smooth production and keep the production cost in control.

LIST OF KEY COMPANIES PROFILED:

• Alberta-Pacific Forest Industries Inc (Canada)


• ANDRITZ (Austria) 


• Avaada Group (India)


• Cepsa (Spain)


• Enerkem (Canada)


• Mitsui & Co., Ltd. (Japan)


• OCI Global (Netherlands)


• SunGas Renewables (U.S.)


• Thyssenkrupp Uhde GmbH (Germany)


• Veolia (France)

KEY INDUSTRY DEVELOPMENTS:

• January 2024 – BASF announced a new collaboration with Envision Energy, a green technology provider. Both companies collaborated to develop an advanced and dynamic process design to convert green hydrogen and carbon dioxide into e-methanol.


• December 2023 – Perpetual Next Company announced the development of the second biomethanol production plant in Estonia. The plant, which will have a production capacity of 220 kilotons, is estimated to come into operation by 2027. 


• December 2023 – Cepsa and C2X Companies announced a joint project to establish a new production plant to produce green methanol with an investment of over USD 1 billion. With this capacity expansion plan, the company will align itself to meet the global demand for green methanol coming from shipping sector, aviation, chemicals, and others.


• September 2023 – OCI Global announced that it is planning to double its green methanol production capacity in the U.S. The plant, which will have a production capacity of 400 kilotons, will be operational by 2025.


• July 2023 – A.P. Moller – Maersk backed SunGas Renewables announced its plans to build a green methanol plant with an investment plan of USD 2 billion. The plant is expected to start production by 2027. It will be located in Louisiana, U.S., and will be capable of producing 400 kilotons annually.

REPORT COVERAGE

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The research report provides a detailed market analysis and focuses on crucial aspects such as leading companies, type, production route, and end use. In addition, it provides quantitative data regarding volume and value, market analysis, research methodology for market data, and insights into market trends and highlights vital industry developments and competitive landscape. In addition to the above-mentioned factors, the report encompasses various factors that have contributed to the market's growth in recent years.

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