RENEWABLE METHANOL MARKET ANALYSIS

Market Challenges And Opportunities

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.