Renewable Methanol Market size is expected to achieve high growth rates in the near future owing to rising concerns for reducing carbon dioxide emissions worldwide.
Renewable methanol is derived from unconventional sources of energy such as from industrial wastage and biomass. The product is an ideal input for producing biodiesel which can also be blended in automotive fuels and processed as feedstock in many chemicals. Production process is very similar to traditional methanol in which carbon dioxide is replaced with carbon monoxide. Carbon monoxide has a high carbon to hydrogen ratio which helps in curbing greenhouse gases emission in environment. The product has a number of applications in various sectors including power generation, transportation, chemicals, etc.
Rising CO2 emissions worldwide has compelled governments to impose strict regulations for reducing carbon footprints. This has significantly propelled the demand of renewable based methanol in past few years. Also, the increasing conversion of industrial and agricultural wastages into renewable methanol is also anticipated to drive product demand during the forecast time frame. Biomass is a major source for producing methanol. It has created lucrative opportunities for renewable methanol market owing to its rising demand in producing variety of chemicals and solvents. Moreover, rising demand from formaldehyde production by using methanol is likely to drive product demand in near future. On the other hand, high volatility in crude oil prices is also one of the important factors contributing positively in product consumption across the globe.
High cost of production coupled with lack of sufficient infrastructure required for the production process may pose obstacles in renewable methanol market growth path in the coming years. Furthermore, unavailability of desired agricultural feedstock to be used in bioethanol production and in biogas generation may pose challenges to product demand in near future.
Renewable methanol is produced from a number of sources including biomass, municipal waste, industrial waste and from many other sources. The product is majorly produced by using biomass as it less costly as compared to other sources. Resources needed to produce methanol by biomass are forest residues, crop residues, tree crops and few forage crops. This type of methanol can be produced by using a thermochemical technique called as gasification. On the other hand, municipal waste required to produced methanol includes all waste products generated commercially or residentially.
On the basis of end users, the renewable methanol market is segmented into chemicals, construction, transportation, power generation and others. Power generation is a major end user segment of methanol as government all across the globe are looking out for ways to reduce dependency on conventional fuels to achieve low fuel costs and to reduce carbon emissions globally. Some of the benefits offered by the product in power generation is its ability to offer utility fuel flexibility and ease of access at the site. There are many companies which have switched to methanol for power generation. For instance, Israel Electric Company has invested around USD 5 million in converting a 50MW turbine in a power generation plant to run through methanol.
Europe and North America are likely to emerge as key renewable methanol market attributed to strict government policies about carbon emissions in the regions. Additionally, regulations in Europe regarding mandatory product usage and its blends in automobile industry is likely to accelerate regional product demand from 2019 to 2025. Furthermore, the product is gaining prominence in nations including India and China owing to rising demand for alternative fuels for power generation in these countries so as to reduce dependence on fossil fuels for providing electricity to masses. China and Australia have highly focused in using methanol for fuel blending purposes. Myanmar and Philippines have also formulated several regulations aimed at mandating use of methanol for fuel blending.
Several key players are involved in the renewable methanol market including BioMCN, Blue Fuel Energy, Carbon Recycling International Inc, Varmsland Methanol, Chemrec AB, Methanex Corporation, BASF SE, Enerkemand, Mitsubishi Chemicals, Statoil and Petronas. The market is very competitive as key players are focusing on expanding their product portfolio to sustain in the market. Recently BASF announced that the company has started producing methanol by using biomass process. The product is now being produced from second generation feedstocks by using residual materials and waste.
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