Renewable methanol is ‘uniquely positioned’ to be a future-proof fuel

With the correct policy support, renewable methanol has the potential to grow from chemical building block to mainstream energy source, writes Methanol Institute CEO Gregory Dolan.

For the shipping industry to achieve the IMO’s 2050 carbon reduction targets an investment and technology transition on the scale of a moonshot will be needed.

It is a progressive process too, but there is no doubt that the end point is fuels produced sustainably from renewable sources, enabling net carbon neutral performance on the ship; from well to wake.

We have no illusions about how difficult this will be and although the shipping industry is hearing a lot about potential choices, few are currently available at the required scale or have the necessary regulatory approvals to enable them to be adopted.

Methanol is among the choices available to owners today that has industry acceptance and regulatory approvals – and one that offers a range of renewable pathways that could enable methanol to provide a long term, net carbon neutral solution.

A new joint report by the International Renewable Energy Agency (IRENA) and the Methanol Institute – “Innovation Outlook: Renewable Methanol” – concludes that increasing production of renewable Methanol can provide the platform needed to support cost effective decarbonization.

While transitioning the global economy to carbon-neutral energy will take massive investments in technology development, infrastructure, and deployment, economies of scale for renewable methanol production and use will lead to competitive fuel pricing for multiple sectors, the report finds. It concludes that as a liquid with the highest hydrogen to carbon ratio of any liquid fuel, renewable methanol can be a key energy source.

The worldwide annual production of methanol nearly doubled over the last decade to reach about 98m metric tonnes (MMT) in 2019 and is expected to grow to more than 120 MMT by 2025 and 500 MMT by 2050.

IRENA’s Transforming Energy Scenario (TES) describes an ambitious, yet realistic, energy transformation pathway based largely on renewable energy sources and steadily improved energy efficiency (though not limited exclusively to these technologies). This would set the energy system on the path needed to keep the rise in global temperatures to well below 2degC and towards 1.5degC during this century.

Under the TES assumptions, IRENA estimates that by 2050 the future production of Methanol could be comprised as follows:

• Methanol from biomass: 135 Mt
• Methanol from green hydrogen and captured CO2: 250 Mt
• Methanol from fossil fuels: 115 Mt

Land and marine transportation will likely be main drivers for the expansion of renewable methanol, due to mandates and legislation being increasingly put in place by regulating authorities to reduce GHG emissions and achieve sustainability goals, the report finds.

Since methanol can be utilised in existing combustion engines as well as more advanced powertrains and chemical production processes, conventional grey and blue methanol can be used today, with a transition to green methanol over time. This makes renewable methanol uniquely positioned to be a future proof fuel.

The report concludes that since government decisions will increasingly drive energy investment decisions, the world’s energy destiny lies in the hands of policy makers. Crafting the right policies and incentives is crucial to meeting the goals of carbon emission reduction, energy security, sustainability, and improvement in quality of life. Sufficient investment in long-lived capital-intensive renewable technologies will not happen without confidence in strong, stable, predictable and sustained policy.

To this end, the report makes seven recommendations for industry and governments on ow to facilitate the transition to renewable methanol:

  1. Ensure systemic investment throughout the value chain, including technology development, infrastructure and deployment;
  2. Create a level playing field through public policy to facilitate sector-coupling;
  3. Support market forces in the chemical sector, focusing on carbon intensity in consumer products;
  4. Acknowledge how renewable methanol can contribute to carbon neutrality in “green deals”, Covid-19 economic recovery packages and hydrogen strategies;
  5. Translate the political will for carbon reduction into regulatory measures and support to facilitate long-term growth;
  6. Encourage international co-operation on trade strategies to create jobs and foster competitive new industries for e-methanol in both producing and consuming regions;
  7. Institute policy instruments to ensure equitable tax treatment and a long-term guaranteed price floor for renewable methanol and other promising fuels.

Currently the main barrier to renewable methanol as well as for other renewable alternatives remains the cost compared to fossil counterparts. For the most part, production of methanol from biomass and from CO2 and H2 is not limited by technology. What is needed is political will to make sustainability a priority and introduce robust policies to stimulate increased use of renewable solutions.


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