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Renewable Methanol Market Size Forecast to Reach US$4.4 Billion by 2027

The Renewable Methanol Market size is forecast to reach US$4.4 billion by 2027 after growing at a CAGR of 4.2% during 2022-2027. Renewable methanol is produced from feedstocks such as municipal solid waste, agricultural residue, Co2 emission, among others. The synthesis of renewable methanol involves fermentation or gasification of biomass (agricultural residue, forestry residues, others) into syngas which is further processed to obtain renewable methanol. The demand for renewable methanol is extensively driven by the automobile sector where it is implemented as fuel for the internal combustion engine, hybrid (fuel/electric) systems, and fuel cells, helping governing bodies globally to reduce greenhouse gas emissions from automobiles. The automobile industry globally is booming with increasing production and sales and this will further contribute to the growth of the market in the forecast period. For instance, as per the statistics by India Brand Equity Foundation, India became the fifth-largest auto market in 2020 with 3.49 million units sold combinedly in the commercial and passenger vehicles segment. Furthermore, renewable methanol finds its massive use in the chemical industry where it is utilized in the production of several chemicals such as formaldehyde, acetic acid, methyl tert-butyl ether, ethylene, etc. The chemical industry is expanding globally and this will drive the growth of the market in the forecast period. For instance, as per the 2020 Chemical Industry Outlook Report by BASF, global chemical production is projected to increase by 4.4% in 2021. The high production cost associated with renewable methanol might hamper the market’s growth in the forecast period.

COVID-19 Impact

The COVID-19 pandemic had a negative impact on the renewable methanol market. Supply chain disruption and procurement of raw material were the major challenges faced by the market during the pandemic. Market players had to modify their working strategies to maintain a stable business operation amid the pandemic. As per the April 2020 report by OCI N.V., the demand for methanol got hampered due to the slowdown of industrial activity. The stagnant growth in various end-use industries further restricted the growth of the market during the pandemic. Going forward, the market is projected to witness significant growth owing to the increasing demand for renewable methanol from end-use industries such as automobile, chemical, and power generation.

Renewable Methanol Market – By Feedstock

Co2 emission feedstock dominated the renewable methanol market in 2021. Co2 is captured either from the atmosphere or from industrial exhaust streams and reacted with renewable hydrogen to produce renewable methanol. This type of feedstock is used extensively for the production of renewable methanol owing to its higher availability compared to other feedstocks. As per the Innovation Outlook 2021 report by The International Renewable Energy Agency (IRENA), the highest potential for the production of renewable methanol remains with the hydrogeneration of Co2 to methanol. Renewable methanol production from Co2 emission does not involve the feedstock availability limitations which happens in the case of biomass feedstocks. The biomass segment involves gasification of forestry residues or agricultural residues to produce a syngas which gets further processing to obtain renewable methanol. The biomass segment is projected to witness significant demand in the forecast period. municipal solid waste will have decent demand for the production of renewable methanol in the forecast period.

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Renewable Methanol Market – By End Use Industry

The automobile industry dominated the renewable methanol market in 2021. Renewable methanol is utilized in the automobile industry as fuel in internal combustion engines, modified diesel engines, and advanced hybrid and fuel cells. The automotive industry is booming globally and this will contribute to the growth of the market in the forecast period. For instance, according to the July 2021 stats by the European Automobile Manufacturers Association, passenger car registration surged by 10.4% in June 2021 compared to the same month in 2020. Similarly, as per the data by India Brand Equity Foundation, the electric vehicle market is expected to become a US$ 7.09 billion market opportunity by 2025. Such a high boost in the automobile industry globally will increase the implementation of renewable methanol as fuel in various automobiles and this will contribute to the growth of the market in the forecast period. The chemical industry will drive the growth of the market significantly in the forecast period.

Renewable Methanol Market – By Geography

The Asia-Pacific region held the largest market share in the renewable methanol market in 2021 with a market share of up to 34%. The high demand for renewable methanol is attributed to the region’s growing automobile industry. For instance, as per the stats by the China Association of Automobile Manufacturers, in September 2021, the production of Chinese commercial vehicles reached 310000 units, jumping 35.5% month on month. Similarly, as per the CEIC data report, in 2020, 3481193 units of diesel vehicles were sold in China which was 2,805,966 units in 2019. Such massive growth in the region’s automobile sector will augment the higher utilization of renewable methanol in the forecast period. The North American region will witness significant demand for renewable methanol owing to the expanding chemical industry in the region.

Renewable Methanol Market Drivers

Expanding chemical industry will drive the growth of the market

Renewable methanol is an integral element in the chemical industry where it is implemented as a feedstock in a large quantity for the production of several chemicals. The chemical industry is expanding globally with increasing production and this will stimulate the growth of the market in the forecast period. For instance, according to the June 2021 Mid-Year US Chemical Industry Outlook report, chemical volumes and shipments in the US are anticipated to surge by 3.2% and 8.2% respectively in 2022. Similarly, according to the report by India Brand Equity Foundation, the domestic chemical sector’s small and medium enterprises are anticipated to display 18-23% revenue growth in the fiscal year 2022. Such expansion in the chemical industry will augment the higher uses of renewable methanol in the production of various chemicals, ultimately contributing to the growth of the market in the forecast period.

Booming automobile sector will drive the growth of the market

Renewable methanol finds its extensive use in the automobile sector as it is used in various automobiles as fuel. The automobile industry globally is booming and this will drive the growth of the market in the forecast period. For instance, according to the data by European Automobile Manufacturers Association, sales in the petrol car segment surged by 11.9% in 2019 compared to the fourth quarter in the previous year. Similarly, according to the September 2020 data by the International Energy Agency, the production and sales of Chinese diesel vehicles stood at 368,000 units and 366,000 units respectively, surging 13% year-on-year. Such massive growth in the automobile industry globally will amplify the higher implementation of renewable methanol as fuel in various automobiles, thereby contributing to the growth of the market in the forecast period.

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Renewable Methanol Market Challenges

High cost of renewable methanol might hamper the growth of the market

The production of renewable methanol involves a high cost which has been a challenge in the market for many years and this might affect the growth of the market in the forecast period. The expensive nature of the production process restricts the scaling up of renewable methanol. As per the Innovation Outlook 2021 report by The International Renewable Energy Agency, the production of renewable methanol remains more expensive than fossil methanol. This expensive production process associated with renewable methanol might affect the growth of the market in the forecast period.

Renewable Methanol Industry Outlook

Investment in R&D activities, acquisitions, product and technology launches are key strategies adopted by players in the market. Renewable Methanol top 10 companies include:

  1. BASF SE
  2. Carbon Recycling International
  3. Enerkem
  4. Fraunhofer
  5. Nordic Green
  6. OCI N.V.
  7. Serenergy A/S
  8. Methanex Corporation
  9. Eni S.p.A.
  10. Synhelion 

Recent Developments

In June 2019, Eni and Synhelion teamed up to produce methanol from renewable energy. This collaboration helps Eni to achieve the goal of reducing greenhouse gases and the use of carbon dioxide as raw material.

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Key Takeaways:

Co2 emission feedstock will witness the highest demand in the forecast period. This type of feedstock is available globally on a large scale compared to other feedstocks, making it a suitable choice in the market.

The automotive industry will drive the growth of the market in the forecast period. According to the July 2021 stats by the European Automobile Manufacturers Association, passenger car registrations in the European region jumped by 25.2% in the first of 2021.

The Asia-Pacific region will witness the highest demand in the forecast period owing to the booming automobile industry in the region. For instance, according to the August 2020 report by the China Association of Automobile Manufacturers, the Chinese automobile industry is anticipated to stay on a progressive track and the New Energy Vehicles segment is projected to witness the highest demand in the forecast period.

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Reportedtimes, PR-Wirein, Extended Distribution, Research Newswire, English

Contact Information:

Venkat Reddy
Sales Director
Email: venkat@industryarc.com
Website: https://www.industryarc.com
Phone: (+1) 970-236-3677

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