The renewable methanol market was valued at US$ 196.8 Mn in 2022, and is projected to reach around US$ 361.9 million by the end of 2030, in terms of revenue, growing at a CAGR of 7.9% during the forecast period (2022-2030). The growing popularity of renewable methanol in formaldehyde and Mineral Turpentine Oil (MTO), both of which are major chemical compounds in the chemical industry and are widely used in paints and coatings, agrochemicals, cosmetics, food, and medicines. The replacement of renewable methanol for marine fuels, as well as rigorous government laws to minimize greenhouse gas emissions, have contributed to the market expansion. These factors increase the growth potential of the renewable methanol market.
Renewable Methanol Market - Impact of Coronavirus (COVID-19) Pandemic
The coronavirus outbreak resulted in lower transport activities across the globe. This led to a decreased demand for blended fuels from the transportation industry, which, in turn, impacted the demand for renewable methanol in 2020. Moreover, low gasoline prices are also impacting the renewable methanol consumption. Many production facilities in Brazil, the European Union, and the U.S. have reduced their production due to sluggish local and international demand. The reduced demand is expected to increase the renewable methanol stocks in many markets, decreasing the renewable methanol prices and compromising profitability. Renewable Methanol Market grew at a low CAGR of around 3% for a short term period in 2021.
Renewable Methanol Market: Growth Drivers
Rise in the demand for renewable methanol as a motor fuel
The increasing use of global renewable methanol across the transportation industry is projected to augment the market growth. Renewable methanol is produced from natural gas, coal and landfill waste, wood waste, and seaweed. Methanol, which is made from sustainable biomass, is a long-term greenhouse gas reduction transportation fuel preference. It reduces greenhouse emissions by 15-20% as compared to gasoline. It is often used as a motor fuel and also has the highest hydrogen-to-carbon ratio as compared to liquid fuel owing to its high octane number. It is a liquid fuel that can be mixed with petrol and ethanol and utilized in today's vehicles with minimum additional expenditures. It is a completely safe fuel. The toxicity is equivalent to, if not superior to, that of petrol. In the event of a spill, it also biodegrades immediately. For instance, India has an installed Methanol Production capacity of 2 MT per annum. As per the plan prepared by NITI Aayog, using Indian high ash coal, stranded gas, and biomass can produce 20MT of methanol annually by 2025.
Growth in environmental issues
Increasing environmental issues due to global warming and changing weather conditions are fueling the renewable methanol market growth. Since, renewable methanol reduces carbon dioxide emissions by up to 95%, nitrogen oxide emissions by up to 80%, and sulfur oxide and particulate matter emissions are totally eliminated when compared to traditional fuels. The depletion of natural resources due to increasing reliance on fossil fuels and fluctuating prices of natural gas and crude oil are also contributing to the renewable methanol market growth. For instance, according to The World Meteorological Organization, The annual mean global near-surface temperature for each year between 2023 and 2027 is predicted to be between 1.1°C and 1.8°C higher than the 1850-1900 average. Thus, growing environmental concerns subjected to CO2 emissions are projected to propel the renewable methanol market growth.
Renewable Methanol Market: Market Restraints
High demand for agricultural feedstock for the production of biogas and bioethanol
The rising demand for agricultural feedstock, particularly crops used for the manufacture of biogas and bioethanol, serves as a challenge to the production and use of renewable methanol. Farmers are allocating resources and land to crops, such as corn, sugarcane, and others, that are currently predominantly implemented in the manufacturing of biofuels, leaving a smaller area available for menthol-producing crops like peppermint and spearmint. As a result, the availability of raw materials for sustainable methanol extraction has been decreasing, resulting in rising market prices and probable shortages. This is projected to hamper the expansion of the renewable methanol Market. Never the less, the quantity of fertile area required to cultivate crops to create a substantial amount of fuel is enormous. This might have a significant influence on environmental biodiversity since natural ecosystems, particularly forests, are being overrun. The downside of biogas today is that the techniques employed in its production are inefficient.
Renewable Methanol Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2022 | Market Size in 2022: | US$ 196.8 Mn |
Historical Data for: | 2018 to 2021 | Forecast Period: | 2023 to 2030 |
Forecast Period 2023 to 2030 CAGR: | 7.9% | 2030 Value Projection: | US$ 361.9 Mn |
Geographies covered: |
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Segments covered: |
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Companies covered: |
Methanex Corporation, Carbon Recycling International, BioMCN, Enerkem, Chemrec Inc., and Varmlands Methanol |
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Growth Drivers: |
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Restraints & Challenges: |
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Market Trends
Renewable Methanol Market: Market Segmentation
On the basis of primary source in 2022, the biomass segment has accounted the largest market share of 42.4% in terms of value, followed by municipal waste and industrial waste segment respectively. As per European Technology and Innovation Platform BioMCN in the Netherlands produces methanol from biomass by gasifying glycerine, a byproduct of biodiesel manufacturing. The thermochemical conversion of syngas to methanol is well understood for fossil feedstocks, and the essential stages for biomass are the same. The fundamental difficulty is the economic feasibility of gasifying biomass at high pressures and conditioning raw synthesis gas. Integrating municipal solid waste (MSW) gasification with renewable energy to synthesize methanol shows great potential in alleviating the dependence on fossil energy and reducing the negative environmental impact of increasing MSW production. Methanol is currently produced from natural gas, but it may also be produced from wood waste or rubbish by a partial oxidation reaction into syngas, followed by catalytic conversion into methanol, a process known as bioethanol.
Integrating municipal solid waste (MSW) gasification with renewable energy to synthesize methanol has significant potential for lowering reliance on fossil energy and the negative environmental effect of rising MSW output.
Figure 1: Renewable Methanol Market, By Primary Source, in 2022
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Renewable Methanol Market: Regional Analysis
Europe dominated the renewable methanol market in 2022, accounting for 29.4% share, followed by North America and Asia Pacific, respectively. Europe has the largest global share of this market. In comparison to fossil fuels, the renewable methanol is gaining popularity among consumers because it is renewable plus safe for the environment. Methanol is less costly to produce than other alternative fuels. Additionally, it is less flammable than petrol. Methanol can be further produced from a variety of domestic carbon-based feedstock, including biomass, natural gas, and coal. According to the government of India, Ministry of Road Transport and Highways, methanol 15 (m15) in petrol will reduce pollution by 33% and diesel replacement by methanol will reduce by more than 80%. Europe held the dominant position in the Renewable Methanol Market. Other countries, such as Saudi Arabia and China, offer significant growth opportunities for manufacturers looking to expand their presence in these markets. The growing popularity of such products is also attributed to the increasing adoption of renewable methanol globally.
Figure 2: Renewable Methanol Market, By Region, 2022
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Renewable Methanol Market: Recent Developments
In January 2023, Sweden launched Project Air, an industrial initiative to transform the chemical industry toward climate neutrality, with far-reaching effects throughout industrial value chains. The project is in a collaboration between Perstorp Group and Uniper. Using circular production processes, this collaboration with CINEA project air will create sustainable methanol for chemical industry.
Renewable Methanol Market: Key Companies
Key players active in the renewable methanol market are Methanex Corporation, Carbon Recycling International, BioMCN, Enerkem, Chemrec Inc., and Varmlands Methanol.
*Definition: Renewable methanol is a low-carbon chemical derived from sustainable biomass, often known as bio-methanol, or from carbon dioxide and hydrogen generated by renewable power. Renewable methanol is made from renewable materials such as industrial waste and biomass. It is an important component in the creation of biodiesel, which may be utilized with car fuels. Renewable methanol is widely utilized in the energy, transportation, vehicle, and chemical production industries. It helps reduce carbon dioxide emissions by 60%-80%.
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About Author
Vidyesh Swar is a seasoned Consultant with a diverse background in market research and business consulting. With over 6 years of experience, Vidyesh has established a strong reputation for his proficiency in market estimations, supplier landscape analysis, and market share assessments for tailored research solution. Using his deep industry knowledge and analytical skills, he provides valuable insights and strategic recommendations, enabling clients to make informed decisions and navigate complex business landscapes.
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