Methanol (CH3OH) is a primary chemical found in many everyday products, such as plastics, paints, car parts, construction materials, as well as pharmaceuticals. It is the feedstock used by wood processing factories to produce formaldehyde, which is then used as a binding agent in resins. The large refineries also use methanol as a blending component, while other chemical manufacturers would require it to produce amines, that are subsequently used by the defence industry in ammunition production.
Methanol can also serve as a clean energy carrier for powering road and maritime transportation, fuel cells, boilers and cook stoves. Methanol presents some advantages over ammonia or hydrogen. For instance, its energy density is higher compared to that of ammonia and therefore storage can be done in smaller spaces, and ships would not have to refuel as often.
Methanol also has a head start within the technological emergence phase. More than 60 methanol-capable vessels are already on the water, with more than 300 on order, being in the initial scale phase as shipping fuel. By contrast, ammonia is in the proof-of-concept phase, having passed initial pilot tests. Furthermore, infrastructure already exists for methanol, as globally 100 ports already have methanol available and almost half of those also have storage capacity.
Traditionally, methanol is produced from natural gas and coal, accounting for about 10% of global CO2 emissions of the chemical and petrochemical sectors. To reduce its carbon footprint, it can also be synthesised from alternative feedstocks. These include captured CO28 combined with clean hydrogen, a process known as e-methanol, or from biomass sources such as agricultural waste, forestry residues, and municipal solid waste, referred to as biomethanol. These alternatives to conventional fossil-based methanol are generally referred to as green methanol. Compared to conventional methanol, e-methanol using renewable electricity can reduce CO2 emissions by up to 95%.10 Similarly, biomethanol derived from woody biomass can emit approximately 0.2 kg CO2/kg, significantly less than natural gas (1.6 kg CO2/kg) or coal-based (3.8 kg CO2/kg) production methods.
Mara Bălașa, EPG Associate
Mara is an Associate within the Clean Economy department of the EPG. With a background in economics and political science (BSc University of Warwick), applied economic analysis, and data analysis (MSc Stockholm School of Economics), she is currently researching the green transition with a focus on industrial policy. Mara has been a PhD Fellow at the Center for Statecraft and Strategic Communication, Stockholm School of Economics, since 2022. During her master’s degree, she was the recipient of the UniCredit Foundation Masterscholarship for top students.
Previously, Mara was a market operations analyst at the European Central Bank and a research executive in public affairs in Brussels, focusing on energy and transport. She has also briefly worked in public administration at the Ministry of Economy in Romania and at the Permanent Representation of Romania to the European Union.
Contact: mara.balasa@epg-thinktank.org