Global Methanol Market Size, Share & Trends By 2028.

(MENAFN- Straits Research) Introduction

As a hydrogen carrier fuel, methanol is produced from a variety of sources including high ash coal, agricultural residue, CO2 from thermal power plants, and natural gas, aligning with global commitments to reduce greenhouse gas emissions and transition towards renewable energy sources. Globally, methanol is used in thousands of products, from plastics and paints to cosmetics and fuels. Its role as an energy resource spans across marine, automotive, and electricity sectors, with an emerging presence as a renewable energy resource. Methanol's clean-burning and biodegradable properties make it an attractive alternative fuel, offering environmental and economic advantages. The production of methanol from renewable feedstocks, such as agricultural waste and captured CO2, further reduces its greenhouse gas intensity and supports the energy transition in end-user markets.

Market Dynamics Growing Demand for Methanol in Fuel Blending Drive the Global Market

The escalating demand for methanol in fuel blending is a substantial driver for the methanol market , underpinned by methanol's multifaceted benefits and global initiatives to reduce carbon emissions and reliance on traditional fossil fuels. Methanol, a low carbon, hydrogen carrier fuel, is being increasingly recognized for its potential to significantly cut down greenhouse gas emissions and urban air pollutants when blended with gasoline. This aligns with global efforts to meet climate commitments, such as those outlined in COP 21, and is particularly relevant in countries like India, where the 'Methanol Economy' program aims to reduce oil import bills and convert abundant coal reserves and municipal solid waste into methanol. The blending of methanol with gasoline, even at levels of 15%, can result in a notable reduction in gasoline imports and emissions, offering a cleaner alternative that also promises economic benefits through job creation and cost savings.

• For instance, with millions of motorcycles and a growing car market, Vietnam's transport sector drives methanol uses in fuel blending and MTBE for affordable, high-octane fuels. For instance, domestic car production in Vietnam is estimated at 388,500 units in 2024, marking a 27% rise from 2023, according to the General Statistics Office. It represents a modest 1.6% increase year-on-year and accounts for 59.5% of total car sales in the market.

Use of methanol as an alternative fuel in marine and manufacturing industries creates tremendous opportunities

Adopting methanol as an alternative fuel in marine and manufacturing industries represents a significant opportunity for the methanol market, driven by the imperative to meet stringent environmental regulations and the industry's commitment to decarbonization. Methanol's potential as a marine fuel is particularly promising due to its ability to reduce emissions of nitrogen oxides (NOx), sulfur oxides (SOx), and particulates, thus contributing to cleaner air quality and compliance with the International Maritime Organization's (IMO) emissions standards. Its liquid state at ambient temperatures simplifies storage and handling onboard ships. Existing infrastructure can be adapted for methanol bunkering, making it a practical and immediate solution for the shipping industry.

• For instance, the Egyptian government signed a framework agreement with Maersk's green methanol project developer C2X for a USD 3 billion hydrogen-to-marine fuel plant in the Suez Canal Economic Zone and is expected to produce up to 300,000 tonnes of green methanol annually, with potential to scale up to as much as one million tonnes per annum.

Regional Analysis

The Asia Pacific methanol market stands as a pivotal segment of the global chemical and energy landscape, driven by robust industrial demand and evolving energy needs as of April 5, 2025. This region, encompassing major economies like China, India, Japan, and South Korea, accounts for a significant share of methanol consumption, fuelled by its widespread use as a chemical feedstock in producing formaldehyde, acetic acid, and olefins, as well as its emerging role in fuel applications. China, the region's largest consumer, relies heavily on methanol for its coal-to-chemicals industry, with the National Development and Reform Commission (NDRC) noting its integration into manufacturing and energy sectors.

• For instance, China is laying more emphasis on the development of new methanol units as in 2023 alone, newly added methanol units included 2.4 million tons from Baofeng, 800,000 tons from Hualu Hengsheng (Jingzhou), 600,000 tons from Inner Mongolia Guangju New Materials, 550,000 tons from Inner Mongolia Junzheng Chemical, and 400,000 tons from Alxa League Shanghai Mongolia Energy. It is expected to add 7.85 million tons of production capacity in 2024, including 6.6 million tons from Inner Mongolia Baofeng, 550,000 tons from Inner Mongolia Junzheng, 300000 tons from Henan Jinkai Chemical, and 400000 tons from Ningxia Guanneng.

The North America methanol market, is a significant segment of the global chemical and energy landscape, driven by its dual role as an industrial feedstock and an emerging alternative fuel. The United States, as the region's dominant player, benefits from abundant natural gas reserves, a primary methanol feedstock, with production facilities concentrated in states like Texas and Louisiana, as noted by the U.S. Energy Information Administration (EIA). A notable shift is occurring toward methanol's use as a biofuel and alternative fuel, spurred by U.S. Department of Energy (DOE) initiatives like the Renewable Fuel Standard and Canada's Clean Fuel Regulations, which promote low-carbon options. Methanol's adoption in marine transport and fuel cells, backed by pilot projects from the National Renewable Energy Laboratory (NREL), reflects this trend, particularly in coastal regions.

• Based in California, WasteFuel plans to produce 30,000 mt/year of biomethanol initially, with production starting by late 2025. The company, backed by shareholders like BP and Maersk, aims to scale up to 10-12 plants globally, each with 40,000-80,000 mt/year capacity.

Key Highlights

• The global Methanol market size was valued at USD 32.26 billion in 2024 and is projected to grow from USD 34.16 billion in 2025 to USD 40.64 billion by 2028, exhibiting a CAGR of 5.9% during the forecast period (2025-2028).
• Based on feedstock, the global methanol market is segmented into Natural Gas, Coal, Biomass & Renewables. The Natural Gas segment is the largest revenue contributor to the market and is projected to exhibit a CAGR of 5.8% from (2019-2028).
• Based on application, the global methanol market is segmented into Formaldehyde, Acetic Acid, MTBE, DME, Fuel Blending, MTO, Biodiesel and Others. The Formaldehyde segment is the largest revenue contributor to the market and is projected to exhibit a market share of 6.3% from (2019-2028).

Competitive Players

Methanex Corporation

Metafrax Group

OCI N.V., SABIC

Celanese Corporation

Mitsubishi Gas Chemical Company, Inc.

BASF SE

Zagros Petrochemical Company

Petronas Chemicals Group Berhad

China National Chemical Corporation (ChemChina)

Proman AG

LyondellBasell Industries N.V.

SINOPEC

Reliance Industries Limited

Atlantic Methanol Production Company (AMPCO)

Recent Developments

• February 2025: MET Development (MAIRE), Eni, and Iren Ambiente have started the permitting process for an innovative circular methanol and hydrogen production plant at Eni's refinery in Sannazzaro de' Burgondi (Pavia), Italy. The plant will be developed by MAIRE together with Italian energy producer Eni and Italian utility Iren, leveraging NEXTCHEM's (MAIRE's technology business unit) proprietary NX Circular technology which will convert approximately 200,000 tons per year of non-recyclable waste into synthesis gas
• May 2024: NEXTCHEM (MAIRE) partners up with Johnson Matthey to jointly license Waste-to-Methanol solutions under NEXTCHEM's Circular Methanol trademark. Following the joint cooperation agreement of July 2021, aimed at integrating MyRechemical's waste-to-syngas technology with JM's syngas-to-methanol technology, the two companies have reached a new agreement to jointly commercialize the integrated technology under MyRechemical's proprietary Circular Methanol trademark.
• August 2024: Huadian Group, a Chinese state-owned enterprise (SOE), aims to invest USD 440 million in Vietnam's central province of Quang Tri for producing green hydrogen and methanol. Per the latest proposal, the Chinese giant plans to build a 265-MW wind farm and an 80-MW solar farm, along with a 30-MWh battery energy storage system (BESS), to serve the production of 12,000 tons of green hydrogen and 100,000 tons of methanol a year, respectively
• March 2024: XCE Energy Holdings and Goldwind International Vietnam have recently entered a strategic partnership through the signing of an MOU on renewable energy power system solutions using green methanol for Xuan Cau Industrial Park and Free Trade Zone project in Lach Huyen, Hai Phong (LHF). The collaboration leverages the unique strengths of both organizations to foster the development of the LHF project towards a greener and more sustainable future.
• February 2024: A series of 12 dual-fuel methanol vessels with a capacity of 13,000 TEUs containerships to be delivered by Hyundai Samho Heavy Industries in 2025 and 2026. This news series of 12 methanol represents a major milestone on the CMA CGM Group's path towards Net Zero Carbon by 2050 and highlights the Group's strategic and technological partnership with Hyundai Samho Heavy Industries and Korea to decarbonize the shipping industry.

Segmentation

By Feedstock

Natural Gas

Coal

Biomass & Renewables

By Application

Formaldehyde

Acetic Acid

MTBE

DME

Fuel Blending

MTO

Biodiesel

Others

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