Renewable Methanol Market Size - Industry Analysis Report, Regional Outlook, Application Potential, Price Trends, Competitive Market Share & Forecast, 2025 - 2034

Renewable Methanol Market Size

The global renewable methanol market is anticipated to grow exponentially from 2025 to 2034, with a strong CAGR over the forecast period, attributed to a global shift toward clean energy and carbon-neutral fuels. Clean power reached more than 40% of world electricity generation in 2024, with record growth in renewables, led by solar, pushing the figure, a report by Ember says. Renewable energy sources contributed a record 858 terawatt-hours (TWh) of electricity in 2024, a 49% rise from the previous record of 577 TWh set in 2022. Solar power was the primary source of the increase, which was driven largely by the huge growth in solar power, which has more than doubled output over the last three years and now generates more than 2,000 TWh.
 

The reference year 2024 is a turning point for industry change as the developed as well as the emerging economies raise investment in green fuel alternatives. An increasing number of government regulations for decarbonization, coupled with massive industrial uptake, is driving the growth of green methanol as an upscale solution for the energy transition.
 

Sectors from transportation to chemicals and power generation are increasingly adopting renewable methanol because of its adaptability, low carbon footprint, and compatibility with conventional infrastructure. Ongoing innovation in technology and the creation of affordable, scalable production systems are also speeding up market entry. The sector is accelerating quickly to commercialize green methanol through investments in next-gen carbon capture and electrolysis technology.
 

For example, in May 2025, the Chinese company Lanze Energy commenced construction of a green methanol plant in Yancheng, Jiangsu Province, that will produce 300,000 tons of green methanol a year. Such facilities are meant to aid the decarbonization process of the global shipping sector.
 

In addition, the use of carbon recycling, biomass gasification, and green hydrogen in methanol production processes has enhanced cost-effectiveness and lowered emissions. Leading companies are also deploying digital technologies to enhance operating efficiency and maximize yields from available feedstocks, including municipal solid waste, agricultural residues, and captured CO?.
 

Yet, the market is confronted with several challenges, such as limited green methanol distribution infrastructure, upfront capital expenses, and regulatory uncertainty. Inadequate policy support and languid permitting processes can hold up new production projects. Therefore, more stringent government incentives, carbon pricing instruments, and international cooperation are required to develop a conducive environment for rapid deployment.
 

Renewable Methanol Market Trends

Trends in the emerging renewable methanol sector identify the industry's shift from pilot-scale production to commercial competitiveness. One of the trends is the pace of uptake of green methanol by the shipping and aviation industries as a consequence of new emission standards and international climate commitments.
 

In 2024, the International Maritime Organization (IMO) implemented enhanced carbon intensity indicators that will require fleet operators to pursue carbon-neutral options like bio-methanol and e-methanol. At this time, the European Union added maritime shipping to its Emissions Trading Scheme (ETS), incentivizing operators to use renewable methanol as a marine fuel.
 

Automotive original equipment manufacturers (OEMs) and e-fuel producers are also testing methanol-to-gasoline (MTG) and methanol-to-olefin (MTO) technologies to expand their use case. This follows the global decarbonization direction and boosts demand across various end-user industries.
 

In August 2024, Honeywell revealed that Inner Mongolia Jiutai Group selected its UOP eFining™ technology to make 100,000 tons of sustainable aviation fuel per year from eMethanol. This is Honeywell's inaugural commercial eFining license in the world and is part of the company's strategic direction on three key megatrends: the future of aviation, energy transition, and higher automation.
 

Another significant trend is the establishment of distributed renewable methanol production units. These modular systems take advantage of proximate biomass or CO? and are positioned strategically in remote or off-grid locations, making clean fuels accessible to everyone. Consequently, they minimize transportation costs, improve energy security, and foster community-level sustainability.
 

Additionally, the advent of national and regional hydrogen plans — the US Hydrogen Energy Earthshot Initiative and Europe's REPowerEU — indirectly supports the adoption of renewable methanol. Green hydrogen, one of e-methanol's major inputs, is gaining better availability and reducing in cost, facilitating large-scale production at competitive prices.
 

Renewable Methanol Market Analysis

The segment of chemicals will lead the renewable methanol industry by 2034, driven by growing applications of green methanol as a renewable raw material in the manufacture of formaldehyde, acetic acid, olefins, and other specialty chemicals. With the chemical sector coming under pressure to curb Scope 1 and Scope 3 emissions, renewable methanol is proving to be one of the most important levers for decreasing lifecycle emissions without impacting performance.
 

As circular economy philosophies become more widely adopted, chemical producers prefer feedstocks from industrial CO? capture, biomass, and waste compared to the historic fossil-based raw materials. Renewable methanol provides an available drop-in fuel that fits these environmental aspirations and enables certification across sustainability schemes like ISCC and RED II.
 

The industrial waste segment will also see strong growth over the forecast period. Utilizing municipal solid waste (MSW), agricultural residue, and other non-recyclable waste streams as feedstock is consistent with waste valorization strategies and national zero-waste policies. Some nations are developing waste-to-methanol (WtM) pilot projects to help eliminate landfill overflows and decrease methane emissions.
 

Geographically, Europe shall dominate the world renewable methanol market due to its ambitious climate targets, sophisticated regulatory structures, and strong financing instruments for low-carbon technologies. The European Green Deal, Fit for 55 Package, and Carbon Border Adjustment Mechanism (CBAM) all encourage the shift towards renewable methanol in industries.
 

Others like the Netherlands, Germany, and Denmark are pioneers with several pilot schemes, policy supports, and public-private partnerships. European Investment Bank and development banks at the national level are financing methanol-based decarbonization initiatives.
 

Renewable Methanol Market Share

Prominent players in the renewable methanol industry include:

• Blue Fuel Energy
• BioMCN
• Varmsland Methanol
• Enerkem
• Mitsubishi Chemicals
• Methanex Corporation
• Chemrec AB
• Carbon Recycling International Inc.
• BASF SE
• Petronas
   

Market leaders in the renewable methanol industry are adopting vertical integration, strategic partnerships, and capacity increases to strengthen their market positions. With a combination of feedstock flexibility, carbon capture, and process intensification, these companies are seeking competitive advantages.
 

New entrants are also appearing. The Asian and Middle Eastern markets see opportunities for significant value in renewable feedstocks and large-scale production with multiple co-products based on abundant renewable energy possibilities and existing industrial CO? emissions.
 

Renewable Methanol Industry News

In February 2025, Spanish oil major Repsol sanctioned a more than €800 million investment in its renewable methanol project, Ecoplant, in Tarragona. The plant will be the first in Europe to manufacture renewable and circular methanol from waste with the help of gasification technology.
 

In May 2025, Metafuels AG announced its plans to build a new synthetic sustainable aviation fuel (e-SAF) production plant at the Port of Rotterdam. The move represents a milestone in the commercial deployment of its own Aerobrew methanol-to-jet technology.