Green Methanol Market is Projected to Reach $3.14 Billion by 2031

03 Jun 2024

Green methanol has been around for years now, with companies such as CRI, OCI N.V., and Chemrec AB being some of the earliest players in the market. Carbon Recycling International (CRI) set up a first-of-its-kind e-methanol demonstration plant in 2010-11 in Iceland and became the first company to start commercial production of e-methanol in 2012 under the brand name Vulcanol. OCI N.V.’s subsidiary BioMCN was the first company to enter bio-methanol production, with the first project starting in 2010 in the Netherlands with a capacity of 200 KT/year. 

Since then, the market has grown significantly, with demand increasing every day owing to strict carbon-emission regulations in the maritime industry and growing emphasis on biofuels from the governments. The maritime industry, biofuels, and support from the government are expected to further drive the growth of the market during the forecast period.

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Green Methanol Market Overview

Green methanol or renewable methanol is produced from a variety of sources such as biomasses, including forestry and agricultural waste, byproducts, biogas, sewage, municipal solid waste (MSW), black liquor from the pulp and paper industry, carbon dioxide, and green hydrogen produced with renewable electricity. Methanol produced from biomass is called bio-methanol, and the one produced from CO2, green hydrogen, and renewable electricity is known as e-methanol.

The global green methanol market is projected to reach $3,149.05 million by 2031 from $122.35 million in 2021, growing at a CAGR of 39.63% during the forecast period 2022-2031.

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Market Segmentation:

Segmentation 1: by End-Use Industry 
•    Transportation/Mobility 
•    Chemical Industry 
•    Power Generation 
•    Other End-Use Industry

The transportation/mobility segment is the largest end-use industry and is expected to dominate the market during the forecast period 2022-2031. The transportation/mobility segment is witnessing the growing adoption of green methanol due to the rising emphasis on the decarbonization of the marine industry. 

Segmentation 2: by Application 
•    Chemical Feedstock 
•    Other Application 

The fuel segment is the largest application segment and is expected to dominate the market during the forecast period 2022-2031. Green methanol is being used as a fuel, mainly in the maritime industry, owing to strict regulations and growing emphasis on its decarbonization.  

The International Maritime Organization (IMO) has set an ambitious target of reducing international shipping carbon emissions per transport work by at least 40% by 2030 and by 70% by 2050, from 2008 levels. This is expected to be one of the major drivers of the growing application of green methanol as fuel in the maritime industry.

Segmentation 3: by Methanol Type
•    Bio-Methanol 
•    E-Methanol

The bio-methanol segment is the largest in methanol type and is expected to dominate the market during the forecast period 2022-2031. Bio-methanol is produced from biological feedstock such as forest residue, municipal solid waste (MSW), biogas, and biomass.  

Bio-methanol production has been around for decades and does not require large investments, unlike e-methanol production, which requires large investments to set up green hydrogen and carbon capture plants.

Segmentation 4: by Region
•    North America - U.S., Canada, and Mexico 
•    Europe - Germany, Denmark, Sweden, Netherlands, and Rest-of-Europe 
•    China 
•    U.K. 
•    Asia-Pacific and Japan - Japan, India, South Korea, Australia, and Rest-of-Asia-Pacific and Japan 
•    Rest-of-the-World - South America and the Middle East and Africa

Europe dominates the green methanol market due to the presence of several leading companies, such as Carbon Recycling International (CRI), European Energy, and Liquid Wind AB, in the region. A highly developed renewable energy market and growing investment from shipping companies such as Auramarine and A.P. Moller – Maersk are also contributing to the dominant share of Europe in the market.

Demand Drivers and Limitations in the Green Methanol Market 

Following are the demand drivers for the green methanol market: 

•    Rising Use of Green Methanol in the Chemical Industry 
•    Government Activities toward Low-carbon Infrastructure 
•    Increasing Demand for Green Methanol in Renewable Energy Storage 

The market is expected to face some limitations as well due to the following challenges: 

•    Limited Availability of Renewable Feedstock Sources for Bio-Methanol 
•    High Cost of e-Methanol Production 

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Key Market Players and Competition Synopsis

Bio-methanol is the largest segment in the market, accounting for around 98.27% market share in 2021, while e-methanol contributed around 1.73% share.

Some prominent names established in this market are: 

Company Type 1: Bio-Methanol Producers
•      BASF SE 
•      Carbon Recycling International (CRI) 
•      OCI N.V. 
•      A.P. Moller – Maersk 
•      Södra 
•      Enerkem 
•      GIDARA Energy 
•      Nordic Green ApS 
•      WasteFuel 
•      Glocal Green 

Company Type 2: e-Methanol Producers 
•      OCI N.V. 
•      A.P. Moller – Maersk 
•      Methanex Corporation 
•      Mitsubishi Gas Chemical Company, Inc. (MCG) 
•      European Energy 
•      Carbon Recycling International (CRI) 
•      Eni S.p.A. 
•      Liquid Wind AB 
•      Synhelion SA 
•      HIF Global 
•      ABEL Energy Pty Ltd. 
•      Southern Green Gas Limited 

Analyst’s Thoughts

The green methanol market is expected to register continuous growth during the forecast period owing to the growing demand for sustainable energy sources, rising green methanol demand from the maritime industry, and investment from the government toward green and sustainable technologies.  

Moreover, growing investment in renewable energy sources and demand for energy storage technologies are also expected to contribute toward the growth of the green methanol market during the forecast period.