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Green Methanol Market to Develop Rapidly by 2031

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The Global Green Methanol Market Size is predicted to be valued at $12,478.5 million by 2031, surging from $349 million in 2021, at a noteworthy CAGR of 37.8%.

Impact Analysis of COVID-19 on the Green Methanol Market

The COVID-19 pandemic has had a significant impact on the global economy, including the green methanol market. The pandemic disrupted supply chains, reduced demand for energy and transportation fuels, and slowed down investments in renewable energy and low-carbon technologies. The pandemic has caused a reduction in capital expenditures in the energy sector, with many companies and governments cutting back on their investments in renewable energy projects. This slowdown in investments has additionally affected the development of green methanol production facilities and other low-carbon technologies. The COVID-19 pandemic had a mixed impact on the green methanol market, with short-term disruptions to the supply & demand for methanol.

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Global Green Methanol Market Analysis

The green methanol market is expected to grow significantly in the coming years due to increase in concerns about environmental sustainability, carbon emissions, and the depletion of fossil fuel reserves. Green methanol can be used in a variety of applications, including fuel for transportation, energy storage, and as a feedstock for the production of chemicals and materials. For instance, in the chemical industry, green methanol is used as chemical derivative for the production of formaldehyde, acetic acid, methyl methacrylate (MMA), and methylamines. The adoption of green methanol is gaining significant popularity across several countries owing to increase in adoption of renewable energy sources such as wind and solar power, used for the production of green methanol. These renewable energy sources help in achieving clean energy transition and reduce the emission of greenhouse gases caused by the combustion of fossil fuel which is used for the production of conventional methanol.  Production of green methanol from renewable electricity is known as electro-methanol, and it has the potential to become a major source of renewable fuel in the future.

Some of the disadvantages of green methanol is that it burns easily and is toxic, if left untreated. In addition, for the production of green methanol, carbon is needed and this carbon must come from renewable sources. The futuristic demand for green methanol is high owing to growth in demand for renewable fuels. However, considering the current production rate of green methanol, it is difficult to meet the high futuristic demand of green methanol. These factors are anticipated to restrain the green methanol market growth during the forecast period.

Governments around the globe are increasingly supporting the use of renewable energy sources and sustainable fuels, including green methanol. This is often achieved through the implementation of policies & regulations such as tax incentives, carbon pricing, and renewable energy targets. For instance, the government policies and regulations can have a significant impact on the growth of the green methanol market. Changes in policies, such as the reduction or elimination of tax incentives, could potentially drive the green methanol demand during the forecast period. Many governments offer tax incentives for companies that produce green methanol. These incentives can help offset the higher production costs of green methanol and make it more competitive with traditional fossil fuels. Governments are setting targets for the production and use of renewable energy sources, including green methanol. For example, the European Union has set a target for 32% of its energy to come from renewable sources by 2030.

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Global Green Methanol Market, Segmentation

The global methanol market is segmented on the basis of type, feedstock, application, en use industry, and region.


The type segment is further classified into bio-methanol and e-methanol. Among these, the bio-methanol subsegment accounted for a dominant share in 2021. Bio-methanol is produced from renewable biomass feedstocks, such as agricultural and forestry residues, municipal waste, and dedicated energy crops. Bio-methanol is considered a sustainable fuel as it is produced from renewable resources and has a lower carbon footprint compared to conventional methanol produced from fossil fuels. . In addition, bio-methanol reduces the emission of pollutants such as greenhouse gases thereby improving the air quality. Moreover, it is biodegradable and have low toxicity that reduce the dependence on fossil fuels. Bio-methanol can be used in a variety of applications, including as a transportation fuel, as a feedstock for the production of chemicals & materials, and as a fuel for stationary power generation.


The feedstock segment is further classified into municipal solid waste (MSW), agricultural waste, forestry residues, carbon dioxide, and renewable hydrogen. Among these, the carbon dioxide subsegment is anticipated to show the fastest growth during the forecast period. The use of carbon dioxide as a feedstock for the production of green methanol is increasing rapidly as it offers economic and environmental benefits. For instance, the use of carbon dioxide for the production of green methanol helps in reducing the harmful carbon emissions, thereby reducing global warming. During carbon dioxide to direct methanol synthesis process, the reaction impurities produced are just water and dissolved carbon dioxide. Owing to these benefits, the use of carbon dioxide for the production of green methanol is anticipated to grow during the analysis timeframe.


The application segment is further classified into chemical uses, and fuel uses. Among these, the chemical uses subsegment is anticipated to have a dominant market in 2021. Green methanol is an attractive feedstock for the chemical industry as it is a renewable, low-carbon alternative to conventional fossil fuel-based feedstocks. It can be produced from a variety of renewable sources, including biomass, waste carbon dioxide, and renewable electricity. This makes it a versatile and sustainable option for chemical manufacturers seeking to reduce their carbon footprint. Green methanol can be converted to olefins, which are used as feedstocks in the production of plastics, synthetic rubber, and other chemical products.

End Use Industry:

The end use industry segment is further classified into automotive, steel industry, chemical, power generation, and others. Among these, the automotive subsegment is anticipated to have a dominant share in 2021. The use of green methanol as a fuel for transportation presents several advantages over conventional fossil fuels. Methanol can be produced from a variety of renewable sources, including biomass and waste carbon dioxide, making it a low-carbon alternative to conventional fossil fuels. Methanol has a higher-octane rating than gasoline, which allows for more efficient combustion and improved engine performance. Methanol can be blended with gasoline in various proportions to reduce the carbon intensity of transportation fuels and comply with low-carbon fuel standards.


The use of green methanol market in Europe accounted for the highest market size in 2021. This growth is majorly attributed to various initiatives taken by the European Union for reducing the carbon emissions to at least 55% by 2030 and to achieve carbon neutrality by 2050. For instance, in January 2023, the large-scale green methanol project in Sweden has received €97million funding from the European Union. This project aims to manufacture green methanol from renewable hydrogen and carbon dioxide that will help in reducing the harmful greenhouse gas emissions by 123% compared to the conventional methanol synthesis process. This project is named as Project Air that is being developed by Uniper, the German-based utility company and Perstorp, the leading Swedish chemical manufacturer. This project will build at Steungsund, southern Sweden that will be able to produce 200,000 tons of green methanol annually. These factors are anticipated to boost the green methanol market size in Europe during the forecast period.

Key Players in the Global Green Methanol Market

Some of the leading green methanol market players are

  • Methanex Corporation
  • Carbon Recycling International
  • Enerkem
  • Fraunhofer
  • Innogy
  • Nordic Green
  • OCI N.V.
  • Uniper SE
  • Vertimass LLC

In March 2021, Uniper SE, the leading energy company based in Germany has collaborated with Liberty Pier Maritime Projects, leading shipping service provider and SDC, the engineering firm for the production of green methanol as a carbon-neutral and sustainable marine fuel.

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