Global Biomethanol Market Research Report: Forecast (2024-2030)

Market Definition

Biomethanol is a renewable & sustainable variant of methanol produced from biomass sources such as organic waste, agricultural residues, forest residues, and municipal waste through the process of biomass gasification or anaerobic digestion. It is considered a renewable energy source, as the carbon dioxide released during its combustion is balanced by the carbon dioxide absorbed during the growth of the biomass feedstock. It is also considered an alternative energy source owing to its high octane number and various advantages, including low flammability, high performance, and low emissions.

Market Insights & Analysis: Global Biomethanol Market (2024-30):

The Global Biomethanol Market size is estimated to grow at a CAGR of around 26.45% during the forecast period, i.e., 2024-30. The market growth is attributed to the rising importance of Biomethanol to mitigate climate change by substantially reducing or eliminating CO2 emissions, and in particular to the growing focus on holding the average global temperature at no more than 1.5°C. This implies achieving net carbon-neutral emissions across all sectors of the economy in the coming years. Low-emission methanol is expected to help in decarbonizing various sectors, particularly as a feedstock in the chemical industry or as a fuel in road or marine transport.

The Global Biomethanol Market is still in its nascent stage since production is currently low and there is ongoing research & development on the feasible end-use expansion of this low-emission fuel. Moreover, the high cost of renewable methanol is one of the main reasons hindering the growth of the market across the globe. Nonetheless, with the surging pressure from regulatory bodies and the green initiatives by national governments to curb the use of fossil fuels as primary energy, the use of Biomethanol is estimated to become economical in the upcoming years.

According to the IRENA, Biomass & Municipal Solid Waste (MSW), feedstock costs vary between USD 5 and USD 17 per gigajoule (GJ). With a lower feedstock cost range of around USD 6/GJ, the cost of Biomethanol is estimated to be in the range of approximately USD 320/t and USD 770/t. Furthermore, the pressing need to decarbonize one of the essential sectors of the economy, i.e., the transportation sector, which contributes substantially to global carbon emissions, positively enhances market growth. In 2022, as per the International Energy Agency (IEA), the transportation sector’s carbon emissions fueled nearly 8 Gt of CO2. Due to this, governments across the globe and major players in the transportation and logistics industries have initiated various plans to decrease the carbon intensity of transportation fuels. As a result, Biomethanol is now being used as a blend with conventional gasoline and diesel or as a pure biofuel in certain vehicles, particularly fuel cell-powered vehicles.

Thus, by replacing fossil fuels with Biomethanol, the transportation industry plays a key role in reducing greenhouse gas emissions and contributing to a cleaner, greener, and more sustainable future. For instance, in 2022, the Methanol Institute (MI) is tracking more than 80 renewable methanol projects around the globe that are projected to produce more than eight million metric tons (2.7 billion gallons or 10 billion liters) per year of e-methanol and Biomethanol by 2027. Hence, this trend is expected to reflect an increasing awareness among consumers of the importance of renewable & sustainable fuel sources to combat climate change and reduce carbon emissions in the forthcoming years.

Global Biomethanol Market Driver:

Growing Adoption of Biomethanol in the Marine Industry – The marine industry is increasingly under pressure to lower its carbon footprint, most of which comes from the use of fossil fuels to run ocean transportation. According to the United Nations Conference on Trade and Development (UNCTAD) in 2022, the maritime sector presently accounts for about 2.8% of all global greenhouse gas (GHG) emissions, mainly due to its rapid growth, its dependence on carbon-intensive bunkers, and the sheer size of its business (more than 80% of the world merchandise trade by volume is transported by sea). As a result, governments across the globe are implementing regulations and policies for the marine industry to reduce carbon emissions.  For instance:

• In 2023, the International Maritime Organization has set new indicative checkpoints for international shipping to reach net-zero GHG emissions for 2030 (by at least 20%, striving for 30%) and 2040 (by at least 70%, striving for 80%).  

This has led shipping companies to reduce their carbon emissions from their routine business operations. As a result, several marine companies, like Maersk, Evergreen, Cosco Shipping, etc., are setting targets to reduce emissions in the upcoming years. In addition to after-treatment systems, which allow the continued use of heavy fuel oils, the shipping industry has been looking into alternative fuels, among which renewable methanol is a primary alternative.

Biomethanol is considered one of the most significant alternative fuels for the marine industry. As a result, shipping companies like Maersk and Cosco Shipping Holdings are increasingly collaborating with and investing in biomethanol companies like European Energy, WasteFuel, Orstred, etc. to boost production and aim to increase their fleet's future. These growing collaborations, combined with rising regulations, would foster market growth in the upcoming years.

Global Biomethanol Market Opportunity:

Surging Bio-Fuel Blending Mandates by Governments to Amplify Market Growth – Governments of nations such as the European Union, the US, China, Denmark, etc., are increasingly mandating the blending of biofuels, including biomethanol, at a certain percentage with gasoline. These mandates are designed to promote the use of biofuels as renewable fuels, reduce greenhouse gas emissions, and steadily achieve climate neutrality.

The growing blending mandates by governments could play a crucial role in promoting the biomethanol market by creating a reliable and growing demand for bio-based fuels. These mandates typically require a certain percentage of biofuels, including biomethanol, to be blended with conventional fossil fuels such as gasoline and diesel. As a result, fuel suppliers and distributors must adhere to these requirements, ensuring a steady market for biomethanol. This steady encourages investment in renewable methanol production facilities and several financial incentives for companies to expand their capacity, further anticipated to provide a flourishing opportunity for the participants in the Global Biomethanol Market during 2024–2030.

Global Biomethanol Market Challenge:

Competition for Land Resources Between Biomass & Food Crops – The competition for land resources between biomass cultivation for biomethanol production and food crops could present a significant challenge for the biomethanol industry in the forecast period. As the world seeks cleaner and more sustainable energy alternatives, biomethanol has emerged as a promising renewable fuel option. Thus, the growing demand for biomethanol could pose a rapid requirement for feedstock globally in the coming years, typically derived from biomass sources like agricultural waste, forestry residues, and energy crops.

According to the IEA, in 2022, demand for vegetable oil, waste, and residue oils and fats could increase by about 56% to approximately 79 million tons over the forecast years. Fuels made from waste and residues are in particularly high demand because they satisfy GHG and feedstock policies. Agricultural land is a finite and valuable resource, essential for meeting the growing global demand for food. When land is diverted from food crops to cultivate biomass for biomethanol, there is a risk of reducing the available land for food production. This could lead to reduced agricultural output, potentially affecting food availability and affordability, especially in regions where food security is already a concern. These factors could slow down market growth in the forecast period.

Global Biomethanol Market Trend:

Increasing Investment & Partnerships in the Biomethanol Industry – The biomethanol market has witnessed rising investment and collaboration in recent years, owing to growing awareness of sustainable and renewable fuel options. Private investors are increasingly investing in biomethanol ventures due to their potential long-term return and the positive environmental impact of such investments. Additionally, governments and policymakers in the US, China, India, Sweden, Brazil, etc. are recognizing the importance of low-carbon energy sources and thus providing financial support and incentives for biomethanol projects.

Partnership and collaboration between biomethanol producers and other companies from the energy sector, marine industry, chemical industry, etc. further play a significant role in accelerating the development and commercialization of biomethanol technologies.

• In 2023, BP, a British multinational oil & gas company, invested around USD 10 million in WastFuel, a biofuel company, to research the potential of biomethanol in hard-to-abate sectors such as shipping.

These partnerships facilitate the transfer of knowledge and the integration of novel ideas into the development of biomethanol production processes and technologies.

Furthermore, collaborations allow companies to pool resources, share risks, and optimize efficiency in the development and implementation of biomethanol projects. Joint ventures and research collaborations enable companies to leverage each other's strengths, leading to faster progress and more robust outcomes. As a result of these growing investments and partnerships, the biomethanol industry has witnessed accelerated growth and technological advancement in recent years.

Global Biomethanol Market (2024-30): Segmentation Analysis

Global Biomethanol Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the global level. According to the analysis, the market has been further classified as:

Based on Feedstock:

• Agriculture Waste
• Municipal Waste
• Forestry
• Black Liquor
• Others (Industrial waste, marine biomass, etc.)

The municipal waste segment has held the major share in the Global Biomethanol Market during the historical years. The rising utilization of municipal waste for biomethanol production addresses waste management challenges, especially in densely populated urban areas where waste disposal is a major issue. Thus, converting municipal waste into biomethanol contributes to the circular economy by turning waste into a valuable resource in the coming years. According to IRENA, in 2030, it is estimated that a potential 44 million tons of MSW could be available in the EU. This presents a significant opportunity for the Global Biomethanol Market in the forthcoming years. Thus, the availability of such a substantial amount of municipal waste in the EU indicates a substantial increase in potential feedstock for biomethanol production. As the EU is one of the significant markets for renewable energy and sustainable fuels, this could lead to a boost in biomethanol production capacity across the globe.

Global Biomethanol Market (2024-30): Regional Projections

Geographically, the Global Biomethanol Market expands across:

• North America
• Latin America
• Europe
• Asia-Pacific
• Rest of World

Of all the regions across the globe, Europe is expected to experience an upsurge in demand for biomethanol in the forecast years. The market growth is attributed to the increasing adoption of biofuel across the region. Thus, biomethanol has been gaining traction as a sustainable biofuel, especially in the transportation and marine sectors. Also, the European Union's Renewable Energy Directive (RED II) has been promoting the use of advanced biofuels, such as biomethanol, to replace conventional fossil fuels and reduce greenhouse gas emissions in the coming years.

Furthermore, the region's transition toward green chemicals is fostering the application of biomethanol as a sustainable and eco-friendly chemical in the production of a wide range of products, including plastics, solvents, and various chemical intermediates. Biomethanol's role in this green chemical shift underscores its significance in reducing the environmental footprint and promoting a more environmentally responsible approach to industrial processes. Thus, the consistent demand for sustainable and bio-based chemicals across the region is further expected to escalate market growth in the forthcoming years.

Global Biomethanol Market Industry Recent Development:

• 2024: BASF announced a collaboration with Envision Energy to develop further the conversion of green hydrogen and CO2 into e-methanol through an advanced, dynamic process design.
• 2023: Enerkem Inc., announced a collaboration with Dimeta, a joint venture between two of the largest off-grid energy suppliers, initiating feasibility studies for the development of two large-scale projects that will convert waste into renewable and recycled carbon dimethyl ether (DME).
• 2023: Enerkem Inc. signed a memorandum of understanding with Technip Energies to accelerate the deployment of Enerkem’s technology platform for biofuels and circular chemical products from non-recyclable waste materials.

Gain a Competitive Edge with Our Global Biomethanol Market Report

1. Global Biomethanol Market report by Markntel Advisors provides a detailed & thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive analysis helps business organizations to gain a holistic understanding of market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing business organizations to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. Global Biomethanol report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, business organizations can develop strategies to minimize risks & optimize their operations.