What is Methanol?
Methanol (CH₃OH), also commonly known as methyl alcohol or wood alcohol, is the most elementary form of alcohol, characterized by its mild odor and volatility. It is opaque in nature and highly flammable, with a boiling point of 64.7°C. Methanol was discovered in 1661 by Robert Boyle through the distillation of wood, and hence it is ascribed the name ‘wood alcohol.’ It’s been in use for centuries, and is presently used as a fuel, solvent, antifreeze solution, and chemical component across diverse industries.
In this blog, we’ll focus on the diverse forms of methanol, methanol manufacturing process, demand growth projection and ways to source methanol.
How is Methanol Produced?
The production method for Methanol might vary depending upon the type of methanol. Generally, the methanol manufacturing process involves gasification. A fuel such as coal or natural gas is used to produce syngas (hydrogen and carbon monoxide), which is then converted to methanol using a catalyst. For a better understanding, let’s look at how methanol is produced using different sources.
Types of Methanol and Methanol Production Methods
- Bio-Methanol: Derived from organic sources like wood and agricultural wastes, bio-methanol has a low carbon footprint and is becoming a popular choice of fuel in sustainable industries. Using gasification, the biomass is converted into syngas, which is made to interact with catalysts like zinc oxide, alumina, and copper.
The product passes through a purification process, and finally bio-methanol is obtained. The biomass absorbs CO2 from the environment during its growth phase, which is then leveraged and converted into fuel. Since carbon generation is minimal in this process, Bio-Methanol has become a key player in decarbonizing the menthol industry and is a top choice in transportation, renewable energy, construction, and manufacturing industries. - Grey Methanol: This is the most abundantly found form of Methanol, produced by reacting natural gas or methane with steam. The byproduct is syngas, which is converted to methanol using catalysts. The grey methanol production method causes a high level of carbon generation, and yet, it is the one most commonly in use, owing to its cost-effectiveness. Also, notably, grey methanol has been in use in the industries like chemical manufacturing, plastic, and fuel blending. There are established processes for large-scale usage of grey methanol, which makes it a common industrial choice.
- Brown Methanol: Brown methanol is produced by heating coal in a low-oxygen environment. The syngas produced is treated with catalysts to yield brown methanol. Countries such as China, which hold huge coal reserves, are the largest producers of Brown methanol.
According to a report published by Adani, as of 2018, China represented approximately 54% of global methanol capacity and 48% of global production, with around 70% of its methanol derived from coal. However, since this method is responsible for the highest amount of carbon emission, industries are facing an increasing push to move towards the other methods of methanol production. - Blue Methanol: This is an improved version of the Grey Methanol, and follows the same methanol production methods, with an additional step, where carbon capture and storage (CCS) technology is used to trap and store CO2 emissions instead of releasing them into the atmosphere.
Blue methanol is rising in demand as an eco-friendly alternative for grey ethanol, and is particularly favoured in shipping, energy, and chemical production industries.
- E-methanol: The most sustainable form of methanol, this carbon-neutral variant is produced using captured CO2, hydrogen, and renewable energy. Electrolysis is used to separate Hydrogen and Oxygen from water, and the hydrogen is then combined with CO2, followed by catalytic reaction to form Methanol.
The captured CO2 is sourced either directly from the air or from industrial emission, helping to reduce greenhouse house emissions. E-methanol has gained traction in the green shipping, energy storage, and aviation industries in recent years.
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Why is Methanol Preferred Over Conventional Transport Fuel?
With rising global demand for cleaner and greener energy, methanol is emerging as an alternative for conventional transport fuels like diesel and gasoline. There are three factors fueling methanol’s growth in demand: first, cheaper production costs compared to alternatives, especially in regions where coal, biomass, and natural gas are available in abundance.
Secondly, it reduces engine maintenance cost by improving internal combustion efficiency of engines. Methanol can be used independently or blended with gasoline.
Thirdly, it releases significantly less CO2, nitrogen oxides, sulfur oxides, and particulate matter, thus being an eco-friendly choice and reducing air pollution.
Demand Projection for Methanol in APAC
The Asia-Pacific (APAC) market for Methanol is estimated to grow in the next decade. In 2024, the market generated an approximate revenue of USD 19.7 billion which is projected to grow at a compound annual growth rate (CAGR) of 9.4% and reach USD 33.3 billion by 2030 (Grandviewreasearch.com).
China will continue to be the key player, both in terms of supply and consumption, owing to its large-scale methanol production and scaling demand across industries. Indonesia and Malaysia are also expected to expand production capacity and bolster supply, tailing China (kenresearch.com).
The demand for Methanol in India is growing parallelly. In 2024, the revenue generated by the market was approx USD 3049.7 million. At a projected CAGR of 9.5%, the Indian market for methanol is estimated to grow at a marginally higher pace than APAC, and touch USD 5207.9 million by 2030 (Grandviewreasearch.com).
With government initiatives such as the ‘Methanol Economy’ programme, aiming to utilize domestic resources, reduce imports, and lower greenhouse emissions, the national demand for Methanol is projected to reach 4300 tonnes by 2034 (chemanalyst.com). The expanding market, in India and in Asia-Pacific, is poised to open up a new era of opportunities for methanol manufacturers and chemical suppliers.
Industries With Highest Demand for Methanol
Methanol is a versatile chemical with diverse utilities. Listed below the top industrial uses of Methanol:
- Transportation and Automotive Industry: The transportation sector is increasingly turning to methanol as an alternative for regular fuel owing to its cost effectiveness and cleaner burning properties. Methanol, combined with gasoline, enhances fuel efficiency. The marine industry too is following suit and showing growing dependency on methanol.
- Energy & Power Sector: Fuel-cell technology used in e-vehicles and back-up power systems are dependent on methanol-to-hydrogen conversion. Power plants and heavy duty transports used in the energy sector often use DME (Dimethyl Ether) instead of diesel, a cleaner fuel alternative, which is also derived from methanol.
- Chemical Industry: This industry is potentially the largest consumer of methanol, using it to generate formaldehyde, acetic acid, and olefins. These chemicals in turn have crucial usage in the production of plastics, paints, adhesives, and resins.
- Pharmaceutical and Healthcare Industry: In pharmaceutical productions, methanol is used as a common solvent, essential for drug synthesis. The demand in the healthcare sector has been steadily rising owing to expansion in production. Antiseptics, Vitamins, and APIs (Active Pharmaceutical Ingredients) use methanol in the manufacturing process.
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Facility Required for Methanol Manufacturing Process
Methanol is procured in large-scale industrial plants. Raw materials such as organic wastes, biomass, coal, wood etc. are made to undergo a number of chemical procedures for methanol to be formed. The infrastructure of a methanol production plant includes:
- A Feedstock Processing Unit to glean and remove impure particles from the fodder i.e. the raw material being used.
- A Reforming Section in which the feedstock is processed under high pressure and temperature, and converted into syngas or synthetic gas.
- A Methanol Synthesis Reactor is used to convert the syngas into methanol. This is where the syngas reacts with catalysts to yield the gas.
- In the last stage, methanol is passed through a Distillation and Purification Unit to separate it from byproducts and to ensure highest levels of purity.
Methanol production facilities usually also have safety mechanisms, heat recovery systems, and storage tanks to contain volatile substances. It is also compulsory for the plants to have environmental controls such as emission treatment units and carbon capture technology.
Certifications and Regulations for Methanol Production
Methanol production is subject to strict regulation across nations. Here are some of the most significant certifications and regulations manufacturers and suppliers need to be aware of:
ISO Certifications: ISO 9001, ISO 14001, and ISO 45001 are essential for quality management, environmental management, and workplace safety respectively.
India’s Central Pollution Control Board (CPCB): Permissions and regulations from this board ensures that methanol production plants are controlling the industrial pollution caused.
GHS (Globally Harmonized System of Classification and Labeling of Chemicals) ensures proper labelling and hazard communication for Methanol.
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Cost of Methanol Production
The cost of Methanol production is dependent on various factors such as cost of feedstock, regional regulations, production technology, plant efficiency, logistics, and so on.
While costs related to the production infrastructure are fixed, the major variable cost is related to feedstock, which accounts for approximately 70% of the production cost.
Nations that are rich in coal reserves prefer using coal over natural gas as the raw material cost efficiency. Regular maintenance of the machinery and infrastructure also helps to increase efficiency and reduce cost. Labor, catalyst replacement, and energy consumptions are factors which also influence the production costs.
Regional and government subsidies, along with logistic costs (especially where import and export is involved) plays a significant role in influencing cost of production as well. As of January 2025, the Methanex Corporation reported a methanol price of USD 400 per metric tonne in China (methanex.com ).
How Can Partnering with Elchemy Help Your Methanol Business?
Elchemy is an advanced chemical sourcing platform helping chemical companies to source customized chemicals. With our global network of suppliers and manufacturers, we can help you to source raw materials to final products, in a seamless manner with all required certifications.
So whether you’re a chemical company trying to source chemicals (mtethanol or others) in bulk, or you’re a supplier and manufacturer looking for a platform to connect with global buyers, Elchemy can offer you the one-stop solution you need.
You can order for custom methanol production or the raw materials and catalysts required in the manufacturing of methanol, and we can get them delivered to you within the stipulated deadline.
Conclusion
Before we wrap the blog, here’s a quick overview of what we’ve explored so far. Methanol is a versatile chemical with diverse applications across industries. The cost, efficiency, and environmental impact depends on the type of methanol and method of production.
Industries like transportation, energy, chemical, and pharmaceutical which are heavily dependent on methanol are contributing towards scaling demand, which is expected to grow YoY.
While the production methods differ, most of them involve gasification of feedstock followed by catalytic treatment of syngas, which can only be performed in plants with the requisite infrastructure for methanol production, and if you’re in search for a platform to buy or sell methanol in bulk, it’s time for you to get in touch with us at Elchemy.
Hope this blog helped you to understand how is methanol produced. To know more about chemical manufacturing and sourcing processes, keep reading our blogs!
