Renewable Methanol Market

Renewable methanol is a second generation biofuel and is produced using renewable energy and non-food crop resources. Methanol has wide range of applications in sectors such as transportation, power generation, and chemical manufacturing. Global consumption of renewable methanol was pegged at 181.1 thousand tonnes in 2015. Sales revenue of renewable methanol is expected to register a CAGR of 6.5% over the forecast period (2016–2026).

Fossil fuel depletion and high natural gas prices has sparked an interest in renewable feedstock

Exploitation of natural resources for fuel has led to high greenhouse gas emissions and high prices of crude oil. This in turn has increased the consumption of methanol. However, if renewable sources (such as biomass, industrial & municipal waste, and industrial CO₂) are used to produce methanol, CO₂ emissions are known to decrease by about 60%-80%. In addition, government regulations in countries such as U.S. and China to use over 10% of renewable fuels in motor fuels by the end of 2020 are expected to drive the demand for second-generation biofuels such as renewable methanol over the forecast period. Wide availability of feedstock for renewable methanol generation and subsidies on gasifier systems are other factors expected to boost the growth of the global renewable methanol market over the forecast period.

However, the supply of agricultural feedstock for biogas generation and bioethanol production is expected to challenge the growth of renewable methanol production and consumption over the forecast period.

Market segmentation

MTBE and Dimethyl Ether end-use application segments expected to gain traction over the forecast period

Dimethyl Ether produced from renewable methanol is an attractive alternative for diesel due to its high cetane number and low exhaust gas emissions. Consumption of dimethyl ether from renewable sources is also anticipated to increase in new fuel injection systems. This also reduces emissions of sulphur oxides and nitrogen oxides. As renewable methanol can be directly blended into petrol with ethanol and can be used to produce MTBE, this segment is expected to register the highest CAGR over the forecast period. The Dimethyl Ether, MTBE, and Solvents segments are expected to witness significant CAGRs in terms of volume and value over the forecast period. The Formaldehyde segment is estimated to be valued at US$ 41.1 Mn by the end of 2016 and is expected to register a CAGR of 5.2% over the forecast period.

Biomass primary source segment anticipated to expand at a significant rate over the forecast period

The Biomass segment is anticipated to account for a value share of 41.8% of the global renewable methanol market by the end of 2016, as biomass is expected to prove as a good option for the production of biofuels such as renewable methanol. Many developed countries meet their biofuel needs and improve their energy security by adopting technologies for alternatives to reduce CO₂ emissions. Domestic bio-waste being the best option, the Municipal Waste segment is expected to gain adequate market share over the forecast period and register a significant CAGR of 6.7% in terms of value over the forecast period.

APEJ set to register the highest CAGR during 2016–2026 

The APEJ region is estimated to register the highest CAGR of 7.7% in terms of value over the forecast period. Increasing demand for fuel and energy against the backdrop of an increasing population is expected to lead to the adoption of renewable energy generation sources and processes. This is expected to increase the demand for renewable methanol in the APEJ region. The renewable methanol market in North America and Western Europe is estimated to be relatively mature over the forecast period. CO₂ emissions in the Middle East have almost doubled today as compared to the last thirty years. However, awareness about the dangers of climate change has forced the region to bring down its CO₂ emissions. This in turn is expected to positively impact the growth of the renewable methanol market in MEA.

Long-terms supply agreements is the main strategy adopted by key players in the North America and Europe renewable methanol market

The major players operating the global renewable methanol market are BioMCN, Methanex Corporation, Enerkem, Chemrec Inc., Carbon Recycling International, and VarmlandsMetanol. Top market companies are strategically focussing on partnering with long-term contract feedstock suppliers and end-use customers in order to maintain their market share in the global renewable methanol market.