Over the past forty years, there was huge emphasis on methanol as an alternative transportation fuel. There were noteworthy attempts to realize the potential of methanol as a day-to-day transportation fuel of the 90s, yet, it did not achieve much success on a large scale. However, this well-known chemical also provides a viable and clean alternative to gasoline despite its relative obscurity.

Methanol is a simple alcoholic chemical compound. It is a thin, colorless, inflammable fluid at room temperature, and has lesser carbon content and more hydrogen than most liquid fuels. Today, the most common feedstock for production are natural gas and coal. It is used in many industries to manufacture a diverse traditional and modern chemical products, including formaldehyde and acetic acid, dimethyl terephthalate, methyl methacrylate, and methyl chloride to manufacture a wide range of end products, including plywood, particleboard, foams, paints, silicones, resins, plastics, and LED/LCD screens.

Methanol, as a fuel, is analogous to ethanol and has similar chemical and physical properties. Given the fact that it is currently one of the cleanest sources of energy available, methanol is used directly as a fuel or fuel additive in significant markets, particularly China which is the principal consumer and producer or methanol as a fuel across the globe. Currently, approximately 60% of the global demand for methanol comes from the industrial chemical market demand, and more countries are investing in more efficient ways of production, including China and the United States. While methanol demand in energy-related applications is strongest in China, a number of countries around the world, including Australia and Israel, have projects in place or are considering adopting these applications on a wider scale.

Methanol is often mixed with petrol for usage as transport fuel owing to it being economical in terms of price, as compared to gasoline as well as for its clean air benefits. Over the past several years, methanol-gasoline blending in China has grown rapidly. Due to its status as an alternative fuel substitute, markets tend to favor energy sources like methanol when the oil price is high. While there has been some uncertainty in the methanol industry due to lower energy prices, the consumption of methanol in the long-term is anticipated to see an upsurge to meet the world’s increasing demand for clean-burning energy products.

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The key advantages of methanol as a fuel include: cleaner combustion, including reduction in the emanation of greenhouse and poisonous gases; established production infrastructure; direct usage in current vehicles using the lower concentration blend (up to M15); plethora of available feedstock and end market uses, thus high flexibility and adaptability. The key hindrances of methanol as a fuel include: lower energy content when compared to gasoline; more corrosive and volatile than other fuel sources, thus restricting its material and vehicle compatibility; more expensive than gasoline when taking account into the installation cost for relating fueling station conversion.

The methanol industry is present across the whole globe, with production in Asia, North and South America, Europe, Africa and the Middle East. Globally, more than 90 methanol plants have a cumulative production capacity of 110 million metric tons (36.6 billion gallons or 138 billion liters). Methanol has long been hailed as a possible alternative motor fuel to gasoline as its combustion produces significantly less CO2 and other toxic chemicals than gasoline, thereby alleviating the increase of greenhouse gas around the world. This a major driver for the growth in demand for Methanol fuel. Flexible fuel vehicles and filling stations for blends of methanol from M3 to M85 have been deployed, across the globe. 

At the same time, it is important to make the structure strong and minimize the damage to the passengers in case of accidents. With electric vehicles making inroads into the mainstream, the market for these materials is growing faster than ever. By using methanol as a marine fuel, the emissions of SOx are reduced by approximately 99 percent, nitrogen oxides by 60 percent and particulate matter by 95 percent.

The international pressure to reduce ships emissions like Carbon Dioxide (CO2), Nitrogen Oxides (NOx), Sulphur Oxides (SOx) and Particulate Matter (PM) is rising. Application of natural gas in liquefied form (LNG) offers good perspectives for larger ship vessels, but offers no solution for smaller vessels, mainly because of the lack of available space on board. Although Methanol’s NOx emissions are slightly higher while compared to LNG, it can still be used as an alternative fuel. Also, the storage is easier and the entire installation can be smaller in size and simpler as compared to LNG. Technology is available, but there is a challenge to develop technical solutions that comply with regulations and are economically attractive.

According to Methanol Institute, the global methanol production currently amounts to about 75 million metric tons per year. Methanol has emissions comparable to other fossil fuels such as LNG and MDO, if it is manufactured using natural gas as a feedstock. Bio-methanol produced from second generation biomass such as waste wood has a much lower global warming potential than fossil fuels and is lower than ethanol by most production methods.

In the past few decades, methanol has been competitive with other fuels such as marine gas oil (MGO), in terms of price, on an energy-equivalent basis. With a fall in oil prices, the price of MGO will weaken rapidly. Although, methanol will still remain economical in many important distribution regions and it is estimated that over the cycle, it will remain competitive with MGO.

Related Reports:

Asia Methanol Market

Renewable Methanol Market

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