Methanol Market by Feedstock (Coal, Natural Gas, and Others), End-use Industry (Automotive, Construction, Electronics, Appliances, Paints & Coatings, Insulation, Pharmaceutical, Packaging, and Others), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2022-2030

Global Methanol Market Analysis

The global methanol market size was $35,320.0 million in 2021 and is predicted to grow with a CAGR of 5.0%, by generating a revenue of $54,630.4 million by 2030.

Global Methanol Market Synopsis

Methanol market is gaining significant popularity as it acts as an alternative to conventional transportation fuels such as ethanol. Methanol has low production costs and lower risk of flammability due to which they are widely used compared to gasoline-based fuels. Also, methanol can meet the domestic fuel requirements as it can be produced from different feedstocks such as natural gas and coal. One of the major advantages of methanol is its ability to blend with gasoline that replaces the use of harmful octane enhancers. Thus, ability of methanol to blend with gasoline can enhance the performance of automobiles by lowering the risk of flammability. The growing application of methanol in the hydrogen fuel cells as it is an excellent hydrogen carrier fuel is a major growth driving factor. Hydrogen fuel cells are becoming extremely popular as it is a clean and efficient source for electricity generation. These factors are anticipated to boost the methanol industry growth in the upcoming years.            

However, some of the disadvantages of methanol include lack of dedicated infrastructure. Also, methanol is highly flammable, corrosive, and toxic due to which its exposure can cause eye damage that can cause blindness by causing damage to the optic nerve. In addition, high exposure to this toxic fuel is known to cause damage to central nervous system that can be fatal.

The use of methanol as a marine fuel is anticipated to gain significant market share. This is because methanol is cost-effective fuel as well as it can meet the stringent emission regulations of the industry to avoid environmental hazards such as air pollution. The use of methanol in shipping sector lowers the emissions of hazardous sulphur oxides, nitrogen oxides, and other harmful particulate matter. Also, the cost required to convert existing vessels to run on methanol is cheaper compared to other fuel conversion alternatives such as gasoline.

According to regional analysis, the Asia-Pacific methanol market accounted for $19,849.8 million in 2021 and is predicted to grow with a CAGR of 4.9% in the projected timeframe. This is because in China, the use of methanol as a clean fuel in transportation is under large-scale development as the number of methanol-powered vehicles in China is increasing rapidly.

Methanol Overview

Methanol, also known as methyl alcohol or methyl hydrate is the simplest alcohol, which is light, colorless, flammable, volatile and has distinctive alcoholic odor. It has wide range of applications in industrial sector where methanol is used as an industrial fuel, solvent, and others. Also, it is largely used in paints & coatings, automotive, packaging pharmaceutical, electronics, and insulation industry.

COVID-19 Impact on Global Methanol Market

The COVID-19 pandemic has brought several uncertainties leading to severe economic losses as various businesses across the world were standstill. This has ultimately lowered the demand for methanol due to disruptions in supply chain, closure of manufacturing plants, as well as economic slowdown across several countries. In addition, the import-export restrictions were laid down on major methanol producing countries such as the U.S. and China. For instance, sanitization of goods being imported from China was imposed by several countries. In addition, the construction & automotive sector faced the highest impact in terms of sales and acquisition of new projects due to which the methanol demand reduced significantly. For instance, in construction industry, several construction projects were postponed or cancelled due to shortage of raw materials, labors, fear of contracting the COVID-19 virus among workers, as well as travel restrictions. Similarly, in the automotive sector, methanol is used in spark-ignition engines. However, disruptions in the exports of automotive parts from China as well as closure of automotive assembly and manufacturing units have hampered the methanol market share during the pandemic. However, in October 2021, the Indian government took new initiative to produce methanol from coal using coal-to-liquid technology. The first project under coal-to-liquid technology has been launched in West Bengal. Also, the second coal-to-liquid methanol generation project has been established at Sonapur, near Asansol, West Bengal. These initiatives are predicted to drive the methanol market size during the analysis timeframe.

Growing Application of Methanol in Industrial Sector to Drive the Market Growth

Methanol has immense application across day-to-day products. For instance, methanol is used in several chemical applications as a solvent. For instance, in feedstock, methanol is used for the production of several chemicals such as acetic acid and formaldehyde. Also, it is used in the manufacturing of foams, windshield washer fluids, plywood subfloors, and others. In addition, methanol can be blended with gasoline for the production of high-octane fuel. Also, this high-octane methanol fuel produces lower emissions compared to gasoline fuel thereby reducing the negative environmental impact. In China, methanol is largely used in industrial boilers, kilns, furnaces, and other thermal applications. Also, methanol is a vital component of biodiesel which is largely used renewable fuel.

To know more about global methanol market drivers, get in touch with our analysts here.

Growing Popularity of Ethanol and Bioethanol Over Methanol to Restrain the Market Growth

Ethanol is less chemically toxic and carries more energy per gallon compared to methanol which is 75% of energy of gasoline per gallon. Also, methanol is more corrosive compared to ethanol which is anticipated to restrain methanol market share in the upcoming years. In addition, the cost of raw materials required for the production of methanol such as capital costs, freight costs, the cost of coal & natural gas is high, which is anticipated to hamper the methanol market growth.

Use of Methanol as a Biodiesel and for Production of Olefins to Drive Excellent Opportunities

Methanol is widely used for the production of biodiesel. Biodiesel is a renewable fuel derived from animal fats or plant oils. The use of methanol in the production of biodiesel acts as a catalyst in the production process. Also, methanol is used in the manufacturing of plastic products for the production of light olefins which are the building blocks for plastic manufacturing. The production of olefins from methanol is known as methanol-to-olefins (MTO) process. Thus, innovative applications of methanol can be used to fuel marine vessels, boilers, cars, trucks, kilns, cookstoves, and others. Also, methanol is clean, sustainable fuel and its clean burning properties make it a net carbon-neutral fuel that leads to lower greenhouse emissions.

To know more about global methanol market opportunities, get in touch with our analysts here.

Global Methanol Market, by Feedstock

Based on feedstock, the market has been divided into coal, natural gas, and others. Among these, the natural gas sub-segment accounted for the highest market share in 2021 whereas the coal sub-segment is estimated to show the fastest growth during the forecast period. 

Global Methanol Market Share, By Feedstock, 2021

Source: Research Dive Analysis

The natural gas sub-type is anticipated to have a dominant market share and generate a revenue of $23,522.9 million by 2030, growing from $14,951.2 million in 2021. The production of methanol from natural gas is a simple process that involves simple processes such as synthesis gas production, syngas conversion into crude methanol, and crude methanol distillation to achieve the desired purity. The methanol produced using this process is water soluble, clear liquid, and readily biodegradable. The use of methanol as a feedstock offers several advantages such as energy security owing to low dependence on gasoline-based fuel, lower production cost, and others. The use of natural gas as a feedstock is safe compared to gasoline-based fuels owing to low risk of flammability. In addition, the efficiency of methanol production from natural gas is as high as 50-60%and it depends on degree of waste heat recovery.

The coal sub-type is anticipated to show the fastest growth and shall generate a revenue of $13,582.8 million by 2030, increasing from $8,020.8 million in 2021. The lower prices of coal and presence of vast coal reserves have increased the demand for use of coal as a feedstock. Also, the use of coal can address the issues related to decline in fuel supplies, thereby reducing the carbon emissions. On September 10, 2021, Bharat Heavy Electricals Limited (BHEL), the India based largest power generation equipment manufacturer, successfully demonstrated the methanol production from coal. This methanol can be used as a motor fuel to power ship.

Global Methanol Market, by End-use Industry

Based on end-use industry, the market has been divided into automotive, construction, electronics, appliances, paints & coatings, insulation, pharmaceutical, packaging, and others. Among these, the automotive sub-segment accounted for highest revenue share in 2021.

Global Methanol Market Share, By End-use Industry, 2021

Source: Research Dive Analysis

The automotive sub-segment is anticipated to have a dominant market share and generate a revenue of $11,028.7 million by 2030, growing from $8,025.9 million in 2021. In automotive sector, methanol is widely used as a motor fuel owing to high octane content that boosts the vehicle efficiency and improves the power and acceleration. In addition, methanol as a fuel in automotive industry utilizes existing infrastructure, offers low price per calorie, and is a safer liquid fuel. The use of methanol in gas turbines lowers the harmful nitrous oxide emissions by almost 80%. Thus, the use of methanol is economically beneficial, low-cost fuel system, and complies with clean air law requirements. These factors are anticipated to boost the growth of automotive sub-segment during the analysis timeframe.

Global Methanol Market, Regional Insights

The methanol market was investigated across North America, Europe, Asia-Pacific, and LAMEA.

Global Methanol Market Size & Forecast, By Region, 2021-2030 (USD Million)

Source: Research Dive Analysis

The Market for Methanol in Asia-Pacific to be the Most Dominant

The Asia-Pacific methanol market accounted $19,849.8 million in 2021 and is projected to grow with a CAGR of 4.9%. The demand for methanol in the Asia-Pacific region is driven by its use as a low emission alternative fuel that helps in achieving low carbon mobility. At present, in India, the methanol production capacity is 2 MT per annum. However, as per NITI Aayog, the Indian government agency, the use of biomass, high ash coal, and stranded gas can increase the methanol production to 20 MT per annum by 2025. This is because India generates 500 million tonnes of biomass every year, has 125 billion tonnes of coal reserves, with huge quantity of stranded and flared gas. In addition, the NITI Aayog has planned to substitute at least 10% of crude oil imports with methanol by 2030. In addition, the Indian government is working on the use of Di Methyl Ether (DME) and methanol in transportation sector for rail, marine, road, and defense sector. Also, use of methanol in mobile towers, power generation, industrial boilers, diesel gensets, and other applications is gaining significant popularity. 

Competitive Scenario in the Global Methanol Market

Investment and agreement are common strategies followed by major market players. For instance, in March 2022, Proman, the leading petrochemicals company, entered into cooperation agreement with Maersk, the Denmark-based shipping company for the development of green methanol supply solutions to produce methanol-fueled container vessels.

Source: Research Dive Analysis

Some of the leading methanol market players are Celanese Corporation, BASF SE, Methanex Corporation, SABIC, Petroliam Nasional Berhad (PETRONAS), Mitsubishi Gas Chemical Company, Inc., Valero, Mitsui & Co., Ltd., Zagros Petrochemical Co., and Methanol Holdings (Trinidad) Limited.