It is nearly twenty years since the publication of a paper outlining how methanol could be the new platform molecule for the fuels and chemicals sectors in a low carbon world, and a way of storing renewable energy. In 2024, the methanol economy moved a step closer. The EU’s FuelEU Maritime regulation, which came into effect at the start of 2025 with the aim of increasing the share of low-carbon fuels in maritime transport, has provided a boost. The Methanol Institute announced that 2024 would be the year that ‘methanol goes mainstream’ as a marine fuel. And, at the end of the year, it does seem that they might be right. The giant A P Moller Group is taking a lead with recent announcements to buy more dual-fuel tankers and to convert green methanol to plastics. There has also been bad news, however.
The idea of methanol displacing petroleum fuel and the gas/naphtha route to chemicals, sparked discussion in Europe twenty years ago, but little action. The concept had more practical success in China, where coal is used to produce methanol via syngas, and vehicles run on high methanol blends. China has continued to have faith in methanol as a molecule for the future, by investing in new low carbon technologies such as the conversion of CO2 using renewable electricity. I have written blog articles about methanol before, and I am running out of ancient Chinese proverbs to illustrate how methanol is on the point of attaining a new status, not just in China, but worldwide.
Methanol can be made from many sources of carbon in differing shades of green and black. In a low carbon economy, it can be produced from biogenic or fossil carbon wastes, virgin biomass or CO2. But gasification of solid raw materials, a frequent first step on the way to methanol, can be difficult and it brought the main bad news of the year. Enerkem, a pioneer in converting municipal waste to methanol and ethanol, announced the closure of its plant in Alberta, Canada early in the year, citing market and domestic regulatory conditions. Others have indicated that there were also performance issues.
So what does 2025 hold? Although methanol has gained a foothold in the EU maritime market, the industry must now establish supply chains for fuel with the necessary GHG savings and sustainability requirements. A sign of its wider acceptance was the launch, by DNV, of a competence standard for safe use of methanol as fuel on ships. There are also signs that low carbon methanol may have a future in road transport in Europe.
The EU is changing its mind about completely banning internal combustion engine vehicles long-term. But they must be fuelled by carbon neutral fuels, and methanol is likely to be the best candidate if the cost can be brought down. A study of e-fuels for passenger vehicle applications in China, published in 2024, concluded that by 2030 the cost of e-methanol could be reduced to a value only 30% higher that of coal derived methanol. As with any e-fuel, the cost of renewable electricity will be critical, and it will probably remain high in Europe, opening the way for the import of lower cost e-methanol from areas with cheap solar generated electricity. Global production of low-carbon methanol is expected to reach 6.8m tonnes at the end of 2025, with four plants under construction in China.
But for the methanol economy to become a reality, progress is needed in the chemicals sector. In 2025, producers will be under pressure to reduce GHG emissions, now that SBTi has published a methodology for developing Science-based targets for the chemicals industry. The substitution of fossil raw materials by biobased feedstocks is one option for reducing emissions. For those who wish to gradually reduce the impact of their methanol production, procurement of biogas on a mass balance basis from the gas grid is possible in some areas. Purchase of biogas certificates is another option. Wider availability of low carbon intensity methanol would boost its use in chemicals.
But what about methanol displacing olefins and naphtha? A striking development of 2024 was the creation of a new company, Vioneo, announced by the A P Moller Group. It has an ambitious mission; to produce olefins and plastics from segregated, traceable biomethanol. The first plant will be in Antwerp. New supply chains and ongoing investment will be required. It is the first step, but as the ancient Chinese saying goes, ‘The journey of a thousand miles begins with a single step’.
Published: 3 January 25
