Renewable Methanol Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Feedstock (Natural Gas, Renewable Energy, Agriculture Waste, and Others), By Application (Formaldehyde, Dimethyl Ether & Methyl Tert-Butyl Ether (MTBE), Gasoline, Solvents, and Others), By End-User Industry (Chemicals, Transportation, Power Generation, and Others), By Region, and Competition Forecast, 2020-2030F

Market Overview

Renewable Methanol Market was valued at USD 6.39 Billion in 2024 and is expected to reach USD 17.97 Billion by 2030 with a CAGR of 31.37%.

The global renewable methanol market is witnessing robust expansion, driven by the escalating need for sustainable alternatives to fossil-based methanol in fuel and chemical applications. Renewable methanol, produced from biomass, carbon dioxide, hydrogen, or agricultural waste, serves as a versatile, low-carbon fuel and feedstock. It is utilized in transportation as a component in fuel cells, gasoline blends, biodiesel, dimethyl ether (DME), and synthetic fuels, offering reduced emissions compared to conventional fuels. In power generation, it powers fuel cells, gas turbines, and combustion engines, supporting the transition to cleaner energy sources. As a chemical feedstock, renewable methanol is essential for producing plastics, resins, adhesives, solvents, formaldehyde, and bio-based materials, aligning with circular economy principles.

The market's growth is fueled by global efforts to mitigate climate change, with governments implementing policies to promote renewable energy. For instance, the European Union's Green Deal emphasizes low-carbon fuels, encouraging investments in methanol production from captured CO2. The rise of electrification in transportation and the need for sustainable chemicals further amplify demand, particularly in regions with high industrial activity. Innovations in production technologies, such as gasification and carbon capture, enhance efficiency and reduce costs, making renewable methanol competitive. The market also benefits from the expanding use in marine and aviation fuels, where methanol blends offer viable decarbonization options.

Asia-Pacific is emerging as a major hub, driven by rapid industrialization and energy demands in China and India. Europe and North America contribute significantly, with focus on regulatory compliance and technological advancements. Challenges like technological limitations persist, but the market is supported by collaborations between energy firms and research institutions. The forecast period of 2020–2030F is expected to see sustained growth as manufacturers leverage policy support and innovations to meet global demand for eco-friendly methanol solutions.

Key Market Drivers

Increasing Demand for Biofuels in Transportation

The global renewable methanol market is significantly driven by the rising demand for biofuels in transportation, where methanol serves as a clean-burning fuel in fuel cells, gasoline blends, biodiesel, DME, and synthetic fuels. This demand is supported by global policies aimed at reducing greenhouse gas emissions, such as the European Union's Renewable Energy Directive, which mandates biofuel blending targets. Research from the International Renewable Energy Agency indicates that biofuels could meet up to 27% of global transport fuel demand by 2050, highlighting methanol's role in decarbonizing heavy-duty vehicles and shipping. The current annual methanol production stands at 98 million tons, predominantly from fossil sources, but the shift to renewables is accelerating with investments in bio-methanol plants.

This trend is evident in regions like Asia-Pacific, where countries such as China are expanding methanol use in vehicles, with reports showing over 10 million methanol-fueled cars on the road. Manufacturers are developing advanced methanol fuel cells for electric vehicles, reducing emissions of particulate matter and nitrogen oxides compared to diesel. Government incentives, like subsidies for biofuel infrastructure in the United States, further promote adoption. The integration of methanol in marine fuels, as per International Maritime Organization standards, addresses sulfur emission limits. This driver is expected to propel market growth through 2030, as transportation sectors prioritize low-carbon alternatives to meet sustainability goals.

Growing Demand for Renewable Chemicals and Materials

The expanding demand for renewable chemicals and materials is a key driver of the global renewable methanol market, as methanol acts as a versatile feedstock for plastics, resins, adhesives, solvents, formaldehyde, and bio-based products. This is supported by policies promoting circular economies, such as the European Union's Circular Economy Action Plan, which encourages bio-based alternatives to reduce fossil dependency. Industry analyses from the Methanol Institute note that methanol is a building block for over 30% of global chemical production, with renewable variants offering lower carbon footprints. The demand for bio-based materials is rising, with global bio-plastics production capacity projected to increase significantly by 2025, underscoring methanol's role.

In North America and Europe, manufacturers are investing in renewable methanol for sustainable chemicals, with plants like Carbon Recycling International's facility in Iceland converting CO2 emissions into methanol. Government funding, such as grants for carbon capture projects in Germany, supports this shift. The use of methanol in adhesives and solvents reduces volatile organic compound emissions, aligning with safety standards like those from the Occupational Safety and Health Administration. This driver is expected to fuel market growth through 2030, as industries prioritize renewable feedstocks to meet environmental and consumer demands for green materials.

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Key Market Challenges

High Production Costs

The renewable methanol market faces significant challenges due to high production costs compared to fossil-based methanol, limiting scalability. Processes like biomass gasification and carbon capture require substantial capital investment, as noted in analyses from the International Energy Agency. These costs are exacerbated by the need for advanced catalysts and energy-intensive hydrogenation, making renewable methanol less competitive in price-sensitive markets like South America.

The reliance on expensive feedstocks, such as agricultural waste, introduces volatility, particularly in regions with limited biomass availability. Smaller producers struggle to achieve economies of scale, hindering market penetration. Regulatory requirements for certification further elevate expenses, as compliance with standards like REACH involves extensive testing. Addressing this challenge requires investments in cost-reducing technologies, but economic uncertainties delay progress. High production costs emphasize the need for subsidies and innovations to ensure market viability through 2030.

Technological and Infrastructure Limitations

Technological and infrastructure limitations pose major challenges for the renewable methanol market, as current methods like fuel cell technology and gasification require efficiency improvements. Research indicates that scaling up carbon capture and utilization remains complex, with high energy demands limiting widespread adoption. This issue is particularly acute in Asia-Pacific, where infrastructure for methanol distribution is underdeveloped, complicating integration into transportation and power sectors.

The need for specialized storage and handling facilities adds costs, as methanol's corrosiveness requires compatible materials. Policies promoting renewables, such as the U.S. Department of Energy's funding for methanol projects, face implementation hurdles due to technological gaps. Smaller manufacturers lack access to advanced R&D, restricting innovation. Addressing these limitations requires collaborative efforts and investments, but slow infrastructure development in emerging markets poses barriers. The industry must overcome these challenges to drive growth through 2030.

Key Market Trends

Expansion of Production Facilities

The expansion of production facilities is a prominent trend in the renewable methanol market, driven by investments in new plants to meet demand for low-carbon fuels. Companies are building facilities using carbon capture and biomass, such as Carbon Clean Solutions' 10,000-ton/year plant in the U.S. This trend is supported by policies promoting clean energy, with Scandinavian Biogas' 6,000-ton/year plant in Sweden operational by 2023.

In Europe, the focus on reducing emissions drives expansions, with BioMCN's planned plant in the Netherlands. Manufacturers are scaling capacities to lower costs, aligning with global sustainability goals. This trend is expected to drive market growth through 2030, as new facilities increase supply and competitiveness.

Research and Development in Production Efficiency

Research and development in production efficiency is a key trend in the renewable methanol market, focusing on cost reduction and improved yields. Innovations like new catalysts developed by German and Swedish researchers lower energy requirements for methanol synthesis. This trend is fueled by the need for competitive pricing against fossil methanol, with R&D investments in gasification and hydrogenation technologies.

In Asia-Pacific, collaborations like LanzaTech's plant in China using steel mill emissions highlight efficiency gains. Government funding for green chemistry supports these efforts, reducing carbon footprints. This trend is expected to propel market growth through 2030, as efficient production methods enhance viability and adoption

Segmental Insights

Feedstock Insights

Based on feedstock, the renewable energy segment has emerged as the fastest-growing segment in the global renewable methanol market and is projected to maintain its strong growth momentum over the forecast period. This growth is primarily driven by increasing environmental concerns, stringent carbon emission regulations, and the global shift toward sustainable energy sources. Renewable methanol, produced from biomass, municipal solid waste, and captured carbon dioxide using renewable electricity, is gaining significant traction as a low-carbon alternative to conventional fuels. Its adoption is further supported by advancements in renewable energy technologies, favorable government policies, and growing demand from industries such as transportation, chemicals, and power generation. As nations aim for net-zero emissions, the renewable energy-based methanol segment is set to play a pivotal role.

End-User Industry Insights

Based on end-user industry, the chemical segment is expected to dominate the global renewable methanol market and maintain strong growth momentum over the forecast period. Renewable methanol is increasingly used as a key feedstock in the production of formaldehyde, acetic acid, methyl tert-butyl ether (MTBE), and other chemical intermediates, which are essential for manufacturing plastics, paints, adhesives, and textiles. Its low-carbon footprint and compatibility with existing chemical production processes make it a preferred choice for industries seeking sustainable raw materials. Additionally, the chemical sector’s rising emphasis on reducing greenhouse gas emissions and meeting sustainability targets is boosting demand. Coupled with supportive government policies and growing R\&D investments, the chemical segment will remain a key driver of market expansion.

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Regional Insights

Based on region, Europe has emerged as the largest market in the global renewable methanol industry, driven by strong regulatory support, ambitious decarbonization targets, and a robust renewable energy infrastructure. The European Union’s stringent climate policies, such as the Renewable Energy Directive (RED II) and the “Fit for 55” package, have accelerated the adoption of low-carbon fuels like renewable methanol across transportation, shipping, and industrial applications. The region’s focus on transitioning to a circular economy, combined with significant investments in green hydrogen and carbon capture technologies, further supports market growth. Additionally, collaboration between governments, research institutions, and industry players is fostering innovation and large-scale renewable methanol production, solidifying Europe’s position as a global leader in this sector.

Recent Development

• In 2024, Carbon capture solutions provider Carbon Clean has reached a milestone in Ørsted’s FlagshipONE e-methanol plant, Europe’s largest commercial e-methanol project. The first equipment pieces have been installed on the unit’s frame, marking the start of assembling carbon capture units. Once operational in 2025, the plant in Örnsköldsvik, Sweden, will capture 70,000 tons of biogenic CO₂ annually and produce 55,000 tons of e-methanol for shipping, reducing emissions by 94%. Developed by Liquid Wind, FlagshipONE benefits from a partnership with Alfa Laval, Siemens Energy, and Topsoe to accelerate plant deployment.
• In 2024, Carbon Recycling International (CRI) signed a landmark agreement with Tianying Group to deploy its proprietary CO₂-to-methanol technology in China’s first large-scale E-methanol project in Liaoyuan. The plant, set to start operations in 2025, will produce 170,000 tons of E-methanol annually using green hydrogen from renewable-powered electrolysers and biogenic CO₂. CRI will provide technology licensing, engineering design, proprietary equipment, and operational support. This will be CRI’s third commercial-scale methanol project in China, marking a significant step in advancing sustainable fuels and reducing carbon emissions.
• In 2022, Scandinavian Biogas Fuels International AB has entered into a SEK 2.7 billion (USD 269 million) agreement with Germany’s Alternoil GmbH to supply bio-liquefied natural gas (bio-LNG). Deliveries will begin with 8,000 metric tons in 2024, increasing to 11,500 tons annually from 2025 to 2030, with an option to expand volumes to 2 terawatt-hours. The bio-LNG, produced from waste-based feedstock at facilities in Sweden and Norway, will be used in Alternoil’s climate-neutral Reefuel for heavy goods vehicles, supporting Europe’s clean transport transition.
• In 2023, Scandinavian Biogas Fuels International AB has rebranded to Biokraft International AB to align with its strategic focus on liquefied biogas (LBG) expansion in Northern Europe. The new brand, drawn from its Norwegian subsidiary, one of the world’s largest LBG producers, reflects the company’s commitment to circular bioenergy production by recycling organic waste into bioenergy and biofertilizers. With around ten projects underway to build new biogas facilities, Biokraft aims to significantly expand capacity and strengthen its leadership position amid rising EU production targets and growing demand for sustainable fuel.
• In July 2025, LanzaTech Inc partnered with a major Indian steel producer to build a 12,000-ton per year methanol plant that will utilize carbon-rich emissions from the steel mill. This collaboration aims to convert steel mill emissions into methanol, a valuable chemical building block, contributing to both decarbonization and resource utilization.
• In August 2025, BioMCN's Netherlands plant underwent an expansion, increasing its annual production capacity to 10,000 tons. This expansion focused on utilizing sustainable feedstocks for methanol production, according to multiple industry sources. The plant, which was originally designed for converting glycerine from biodiesel production, now primarily utilizes biomethane as feedstock.
• Carbon Clean Solutions Ltd is building a new renewable methanol plant in the United States, with a planned capacity of 10,000 tons per year. The plant will use carbon capture technology to produce renewable methanol from industrial emissions.
• In Sweden, Scandinavian Biogas Fuels International AB is building a new facility to produce renewable methanol from biogas. The plant will have a capacity of 6,000 tons per year and is expected to be operational in 2023.
• In Iceland, Carbon Recycling International Ltd. operates a renewable methanol plant that converts carbon dioxide emissions into renewable methanol. The plant has a capacity of 4,000 tons per year and has been in operation since 2012.
• LanzaTech Inc is planning to build a new renewable methanol plant in China, in partnership with the Chinese Academy of Sciences. The plant will use LanzaTech's carbon capture technology to produce renewable methanol from steel mill emissions.

Key Market Players

• Advanced Chemical Technologies
• BASF SE
• Carbon Recycling International (CRI) LLC
• OCI N.V.
• thyssenkrupp AG
• European Energy AS
• Orsted AS
• Proman AG
• WASTEFUEL
• Enerkem Inc.

Report Scope:

In this report, the Global Renewable Methanol Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Renewable Methanol Market, By Feedstock:
• Natural Gas
• Renewable Energy
• Agriculture Waste
• Others
• Renewable Methanol Market, By End-User Industry:
• Chemicals
• Transportation
• Power Generation
• Others
• Renewable Methanol Market, By Application:
• Formaldehyde
• Dimethyl Ether & Methyl Tert-Butyl Ether (MTBE)
• Gasoline
• Solvents
• Others
• Renewable Methanol Market, By region:
• North America
• United States
• Mexico
• Canada
• Asia-Pacific
• China
• India
• South Korea
• Japan
• Australia
• Europe
• France
• Germany
• United Kingdom
• Italy
• Spain
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in global Renewable Methanol market.

Available Customizations:

With the given market data, TechSci Research offers customizations according to a company’s specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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