The renewable methanol market is estimated to be valued at US$ 212.35 Mn in 2023 and is expected to exhibit a CAGR of 7.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Renewable methanol is a sustainable fuel produced from carbon dioxide and renewable sources like biomass, municipal solid waste, or CO2 emissions. It is colorless and volatile in nature with high energy density and storage capabilities. Renewable methanol can be used for direct fuel applications or as a platform chemical for various other derivatives. It acts as a cost-effective alternative fuel and helps reduce greenhouse gas emissions significantly.
Market key trends:
One of the major trends driving the renewable methanol market is increasing demand for sustainable energy solutions. With growing awareness about climate change, there is rising focus on developing green alternatives to fossil fuels. Renewable methanol is considered carbon neutral as it absorbs the same amount of CO2 during production as released during combustion. It can replace liquid fuels derived from crude oil and help lower transportation sector emissions remarkably. Many countries are supporting renewable methanol commercial production through subsidies and incentive programs to boost its usage in transportation fuel applications like marine fuel and biodiesel. Initiatives toward developing methanol as a marine fuel are also propelling the market growth.
Threat of new entrants: The renewable methanol market poses low threat of new entrants due to high capital requirement for setting up new production plants and well established brands dominating the market.
Bargaining power of buyers: Buyers have moderate bargaining power due to availability of alternatives like ethanol, however renewable methanol still holds advantage over other substitutes due to its versatility.
Bargaining power of suppliers: Suppliers have moderate bargaining power due to availability of raw material alternatives and opportunity for forward integration by large players.
Threat of new substitutes: Threat of substitutes is moderate as renewable methanol can be substituted by other green alternatives like bioethanol however its versatility makes it irreplaceable in certain applications.
Competitive rivalry: Intense competition exists among existing players to gain higher market share.
Strength: Rising support through government policies and funding for bio-based fuels production is driving its adoption. Renewable methanol displays great compatibility with existing infrastructure and technologies.
Weakness: High capital investment requirement for plant setup poses challenge for small players. Fluctuation in raw material prices impacts production costs.
Opportunity: Growing demand for green fuels from transportation sector presents lucrative growth prospects. Potential to replace fossil-based methanol and other liquid fuels widens application scope.
Threats: Slow industrial adoption impacts economies of scale. Stringent quality norms and certification requirements raise compliance costs.
The Global Renewable Methanol Market Demand is expected to witness high growth, exhibiting CAGR of 7.9% over the forecast period, due to increasing demand for sustainable fuels from end use industries like transportation. Rising environmental concerns, depleting fossil fuel reserves and supportive renewable fuel policies and mandates have also augmented the adoption of renewable methanol.
Regional analysis: North America dominates the current renewable methanol space, accounting for over 35% share of global production capacity in 2023, led by presence of large production plants in Canada and US. Asia Pacific emerges as a highly lucrative market, expanding at fastest CAGR through 2030 on back of growing commitment towards decarbonization and green infrastructure development across China, Japan and South Korea.
Key players: Key players operating in the renewable methanol market are Methanex Corporation, Carbon Recycling International, BioMCN, Enerkem, Chemrec Inc., and Varmlands Methanol. Major players are investing in capacity expansion and strategic partnerships to reinforce their position and benefit from increasing commercialization of renewable methanol.