Green methanol is a key fuel for net-zero energy transition. It uses sustainable biomass as its feedstock: agricultural waste, food waste, manure, and other matter with high levels of organic gases. Moreover, the process is powered by renewable energy sources and proper filtration ensures that no pollutants escape into the atmosphere. On the other hand, fossil methanol is derived from coal and gas and thus creates high CO2 emissions.
However, green methanol is not cost-competitive yet. The price of green fossil is 5-15% higher than the price of fossil methanol (1). Scalability – in synergy with government support and investment – is required to reach cost competitiveness.
The green methanol segment is still in its very infancy. But we have seen major companies, such as BASF and A.P. Moller – Maersk, have entered the segment. We believe that green methanol has strong potential in mitigating the climate crisis in the near future.
1) Average prices for 2022 at several exchanges. Source: S&P Global
