Green methanol: a new paradigm for clean energy in the context of the \"dual carbon\" goals

What are the routes for producing green methanol?     Based on the source of raw materials, green methanol is mainly divided into two categories: methanol produced from carbon dioxide and green hydrogen generated from renewable energy (also known as electrolytic methanol), and methanol produced from biomass. Among them, biomass-based methanol production can be further divided into methanol production via biomass gasification and methanol production via biomass fermentation.     ? Methanol production from carbon dioxide and green hydrogen: Methanol production from carbon dioxide and green hydrogen involves using renewable electricity to electrolyze water to produce green hydrogen, which is then used as a feedstock along with captured carbon dioxide to manufacture methanol through carbon dioxide hydrogenation. This process can be carried out through either direct hydrogenation or indirect hydrogenation routes.     Direct hydrogenation is the process of converting carbon dioxide into methanol through a single hydrogenation step; this approach is subject to thermodynamic equilibrium limitations, with an equilibrium conversion rate of carbon dioxide around 20%. The reaction conditions are mild, but the selectivity for methanol is low, typically ranging from 70% to 80%.     Indirect hydrogenation involves first converting carbon dioxide into carbon monoxide through reverse water-gas shift (RWGS), and then further hydrogenating the carbon monoxide to produce methanol. The indirect hydrogenation route can overcome the limitations of thermodynamic equilibrium, significantly improving the conversion rate of carbon dioxide and the yield of methanol; however, it requires higher reaction temperatures and has a more complex process flow. Icelandic Carbon Cycle Inc. (CRI) was the first to achieve commercial application of the direct hydrogenation of carbon dioxide to produce methanol; in China, institutions such as the Dalian Institute of Chemical Physics under the Chinese Academy of Sciences (using the direct method), the Shanghai Advanced Institute of Science and Technology under the Chinese Academy of Sciences (also using the direct method), and the Southwest Research Institute of Chemistry and Engineering (using the indirect method) have already carried out industrial demonstrations on a scale of several hundred tons. At present, this technology mainly faces challenges such as high costs for carbon dioxide capture, green hydrogen production, and storage and transportation.     ? Methanol production from biomass gasification: This technology involves gasifying biomasses such as straw, wood chips, corn cobs, rice husks, straw, and urban solid waste, and then using conversion and decarburization processes to produce syngas with a specific hydrocarbon ratio, which is used to manufacture methanol.     Our country possesses abundant biomass resources, which can be utilized efficiently to produce methanol. However, in biomass gasification projects, a large-scale and stable supply of biomass feedstock is key to the success of such projects; at present, large-scale industrial application has not yet been achieved. How to obtain high-quality syngas with stable composition and low inert gas content is the main challenge faced by methanol projects; at the same time, supporting technologies such as tar treatment and wastewater treatment must also be developed.     ? Methanol production via biomass fermentation: Methanol production through biomass fermentation involves using microorganisms to anaerobically ferment biomass to produce biogas, which is then reformed into hydrogen and carbon monoxide in order to synthesize methanol. The main problems facing this technology at present include: the overall efficiency and reaction rate of the anaerobic fermentation process are low, which results in anaerobic fermentation mainly being carried out in small-scale production units ； In addition to methane, biogas also contains large amounts of carbon dioxide, hydrogen sulfide, water vapor, etc.; there is still much room for improvement in current desulfurization technologies ； The reactions of methane-steam reforming and methane-carbon dioxide reforming still need to be improved in terms of catalysts and reaction rates. In October 2024, the biomass natural gas-based green methanol project of Daqing Refining & Chemical Company in China obtained China’s first ISCC certificate for fermentation processes.

Prospects for the Application of Green Methanol As a low-carbon energy carrier, green methanol is becoming one of the key aspects of global energy transition, thanks to its advantages such as the ability to replace fossil fuels, ease of storage and transportation, and compatibility with existing chemical and energy infrastructure.     (1) Road transportation: Methanol-powered vehicles have entered the stage of large-scale deployment, serving as an important breakthrough for reducing carbon emissions in land transport. As a pioneer in the industry, Geely Automobile in our country has put into operation over 60,000 methanol-powered passenger and commercial vehicles, with a total driving distance exceeding 20 billion kilometers. Compared to traditional gasoline vehicles, methanol fuel can reduce the emission of pollutants such as carbon dioxide and particulates. It helps to alleviate urban air pollution while also decreasing dependence on oil. With the improvement of the refueling infrastructure and increased policy support, methanol-powered vehicles are expected to become more widely used in areas such as public transportation and logistics, offering significant advantages especially in long-distance freight transport and construction machinery.     (2) Shipping sector The shipping industry is a major source of emissions of greenhouse gases such as carbon dioxide, and it is also the largest downstream application area for green methanol at present. According to the IMO’s Strategy for Reducing Greenhouse Gas Emissions from Ships 2023, by 2030 alternative technologies that result in zero/near-zero greenhouse gas emissions should be adopted, with their share in fuel/energy use reaching at least 5%, with a goal of 10%. At that time, the annual demand for green methanol is expected to range from 21.3 million to 42.6 million tons. According to Clarkson’s data, as of February 2025, there were 50 methanol-fueled ships in operation worldwide, with 250 new ship orders placed. As a liquid fuel at room temperature, methanol can be utilized with existing port storage and transportation facilities (only conventional storage tanks need to be modified), thereby significantly reducing the costs associated with ship modification and operation.     (3) Aviation sector: Similar to the shipping sector, international policies aimed at reducing carbon emissions in aviation are pushing airlines to seek alternatives to fossil-based aviation fuels. The EU’s ReFuelEU regulation requires that, starting in 2025, all flights must use 2% sustainable aviation fuel (SAF), with this proportion rising to 6% by 2030. Green methanol can be used to produce sustainable aviation fuel through further processing, and Honeywell has already achieved commercial application of this technology. According to McKinsey, by 2030, the global annual demand for mandatory sustainable aviation fuel is expected to be around 4.5 million tons ； If the usage levels committed to voluntarily by airlines are taken into account, global annual demand for sustainable aviation fuel will exceed 20 million tons by 2030.     (4) Chemical industry: In the chemical industry, green methanol is evolving from an energy carrier to a low-carbon raw material. It can serve as a substitute for traditional fossil-based methanol in the synthesis of chemicals such as acetic acid and olefins, and further used to produce materials like ethylene-vinyl acetate copolymers (EVA) and polyolefins, thereby reducing carbon emissions throughout the product’s life cycle. When combined with carbon capture technology, industrial carbon dioxide emissions can also be converted into methanol feedstock, creating a \"capture-reuse\" loop. Policies such as the EU Carbon Border Tax (CBAM) will further boost the adoption of green methanol in the chemical industry.

Current status of the green methanol industry at home and abroad The green methanol industry is currently in its introductory phase, with rapid growth in global production capacity plans, which are mainly concentrated in regions such as Europe, China, and **. According to the renewable methanol database developed by the Methanol Institute (MI) in collaboration with Finnish company GENA Solutions Oy, as of February 2025, this database tracks 210 renewable methanol projects around the world. By 2030, the total production capacity is expected to reach 35.7 million tons per year, of which 19.4 million tons per year will come from electrically produced methanol and 16.3 million tons per year from bio-based methanol production. Companies involved include HIF Global, OCI Global, Orsted, and others.     Regarding China’s green methanol industry, according to relevant statistics, the planned production capacity by the end of 2023 was around 11.4 million tons per year. By the end of 2024, the planned production capacity had exceeded 50 million tons per year, showing strong growth momentum. Relevant data show that by the end of 2024, the domestic capacity for green methanol production that had been put into operation, registered, or approved exceeded 15 million tons per year. The companies involved include Yigao Environmental Protection, China Energy Engineering Group, CRRC Shandong Wind Power, Sinochem Saiding Green Energy Technology, and MingYang Green Chemicals, among others.     Key challenges in the development of China’s green methanol industry: First, production costs remain high. The technical routes for producing green methanol (such as alcohol production via biomass gasification, and the production of green hydrogen through water electrolysis coupled with carbon capture) still face significant economic barriers. Biomass gasification for alcohol production has a cost 30%~50% higher than that of traditional coal-based methanol production, due to high raw material collection costs and low gasification efficiency ； In the green hydrogen pathway, the cost of electrolyzer equipment and electricity constitute the main constraints; only when the price of green electricity drops below 0.2 yuan per kWh can it become economically viable. Furthermore, the carbon price in our country is only 70–80 yuan per ton, which is not sufficient to offset the cost difference between green methanol and conventional methanol, resulting in a lack of motivation for companies to make the transition.     Second, the infrastructure and supply chain support are insufficient. Regarding the application of methanol in road transportation, the number of methanol refueling stations is merely 1/200 that of conventional gas stations; they are concentrated in pilot regions such as Guizhou and Shanxi. Inter-regional networking has not yet been realized ； In the shipping industry, there are just over ten ports worldwide capable of methanol bunkering; in China, only Shanghai Port and Qingdao Port possess this capability. Furthermore, the long-distance transportation of methanol relies on railways and roads, with costs accounting for 15% to 30%; large-scale pipeline transportation technology is not yet mature.     Third, the standard system and certification mechanisms are incomplete. The EU has strict definitions for green methanol, recognizing only methanol produced from biomass or green hydrogen, as well as methanol made from renewable carbon dioxide. In China, however, no unified certification standards have been established, and there are no authoritative certification bodies, which results in companies facing challenges such as long export certification processes and high costs.     Fourth, the policy incentive mechanism has not yet developed systematic support. The EU systematically supports the development of green methanol through a tripartite mechanism of regulations, standards, and markets. Although China has established methanol as a strategic alternative fuel, the lack of tax incentives and a delayed carbon credit trading system make it difficult to support a premium of over 50% for green methanol, thus creating economic barriers to its adoption by enterprises.

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