Global Low-carbon Methanol Market Size Likely to Grow at a CAGR of 34.7% By 2034

Market Size and Growth

As per the Low-carbon Methanol Market size analysis conducted by the CMI Team, the global Low-carbon Methanol Market is expected to record a CAGR of 34.7% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 2.5 Billion. By 2034, the valuation is anticipated to reach USD 27.7 Billion.

Overview

As per the industry experts at CMI, the Global Low-carbon Methanol Market is expanding as transportation and industry transition to cleaner fuels. WasteFuel and SunGas Renewables are leading North America’s modular plants and carbon negative fuel markets with a focus on the production of green methanol via CO₂ capture, renewable hydrogen, and biomass.

In Europe, CRI and Thyssenkrupp Uhde mitigate integrating CCU with further electrolysis advancements. Södra in the Asia Pacific region is investing in affordable renewable methanol for the domestic as well as export markets. Other companies across all regions are adopting climate benchmarks under a circular economy model along with sustainable certifications. They result from strategic partnerships, which, combined with regulatory support, give global impetus.

Key Trends & Drivers

Developments in CCU and Electrolysis Technology: This concern includes the advancement in carbon capture and utilization (CCU) alongside water electrolysis technologies aimed at producing green methanol from CO₂ emissions and renewable hydrogen. These processes are critical towards achieving a near-zero emission target for the fuel and chemical industries. The advancements made in CCU along with electrolysis continue to improve both the efficiency and scalability of low-carbon methanol production. Recently, CRI launched its flagship CO₂-to-methanol plant in China in 2022. Just a year later, Oxylus Energy partnered with Element 1 to utilize CO₂-derived methanol in their hydrogen systems by 2025. Such advancements result in improved emissions and enhanced cost-effective production methods, refining the global net-zero targets for methanol emissions.

The Enhancement Of Green Hydrogen Infrastructure: Refers to the expansion of existing systems used for storage and production, as well as the distribution of green hydrogen, which is one of the key components utilized to create low-carbon methanol.enhancing infrastructure for hydrogen increases input economy decreases costs while improving supply consistency. The deployment contracts ITM Power issued launched NEPTUNE V 5MW electrolyzer, set for use April 2024 further boosting efficient hydrogen generation, creating new access zones for renewable subsidized European Japanese regions, expanding functionality, and serving as support systems aid subsidized fossil sourced hydrogen. Reliant on these, foster consistent growth directly benefiting investment, lifting goal fuel-emission chemical globalization calculus acceleration.

Investments from Energy Majors and Start-ups: This driver is characterized by increased funding from existing energy operators as well as new businesses to scale low-carbon methanol. It indicates increasing certainty for its acceptance as a sustainable fuel. In 2025, Honeywell and AM Green signed an MoU to explore green methanol production from captured CO₂ in India. In 2024, GAIL entered into a contract supplying 350 ktpa of CO₂ with AM Green for methanol production. These initiatives exemplify strategic sponsorship by both utility giants and green innovators. Accelerated development, testing, and commercialization are made possible through this financial support. Inflow of capital into the sector encourages innovation in competitiveness and accelerates the global rollout of projects.

Supportive International Collaborations and Research Initiatives: International Collaboration and Research Activities aimed at Scaling Low Carbon Methanol Production involves collaboration across borders towards development, commercialization, and technological advancement of applicable processes or methods toward low carbon emission systems. Focused collaborations lead to lower costs, more knowledge resources, speedier timelines, and enhanced deployment potential.

Some agreements include AD Ports together with Transmar and Orascom devising plans for Storage & Export Hubs for the Green Methanol in Egypt or CRI’s GAMER project advancing high-temperature electrolysis towards CO₂ methanol conversion (efficiency). These are all examples showcasing interregional commitment efforts as well as interdisciplinary diversity, incorporating multiple sectors into one definable objective group globally referred to as supply chains market access alongside technical prowess which defines the world’s cooperation needed for integration on standardisable scalable systems on which such created low carbon methanol can be produced flexibly without restrictions.

Report Scope

SWOT Analysis

• Strengths: Low-carbon methanol represents a significant decrease in greenhouse gas emissions when compared to conventional methanol, allowing it to support necessary decarbonization goals. It is able to be formed from a number of renewable sources including captured CO₂, green hydrogen and biomass. Its compatibility with existing fuel infrastructure will help aid the transition for the chemical and shipping industries. The growing support from governance with net-zero mandates means there will be ongoing and settled demand. Major industry players are already investing in capacity or expanding production based on existing technologies. These characteristics align with the significant growth potential for low-carbon, in a transition to a clean energy system.

• Weaknesses: There is room for growth from capturing CO₂ and pairing with green hydrogen; however, the current prices make it very expensive to produce low-carbon methanol given the value structure. Regional limitations from areas where there is no existing infrastructure also limit supply and distribution potential for green methanol. Availability of biomass feedstock, coupled with some technical challenges, also limits scalability. For smaller producers without the ability to capitalize on intensive projects, there is further uncertainty with no standard recognition of compliance for green methanol. Ultimately, these constraints exacerbate the limitations of commercial data dealing with restricted access to minimal scale applications. 

• Opportunities: Heavy shipping, aviation, and industrial transport sectors are witnessing new opportunities through global decarbonization strategies. There is also a rapid increase in investment for carbon capture and hydrogen infrastructure, which is decreasing the costs massively overall. There are transitional markets for green methanol through blending with fossil equivalents. Strategic partnerships have the capacity to expedite deployment along with the contribution of government subsidies.

• Threats: Increased competition from other alternative fuels ammonia, SAF, and green hydrogen may divert focus and funding. Regulatory uncertainty or policy changes such as withdrawing subsidies could jeopardize project viability. Technical underperformance risks in large scale CCU or biomass conversion pose incurrable performance problems. Hydrogen price volatility impacts cost estimations significantly. Environmental concerns about biomass sourcing raise criticism. A combination of these aspects undermines confidence from investors, causing stagnation of market expansion.

List of the prominent players in the Low-carbon Methanol Market:

• WASTEFUEL
• Veolia
• Thyssenkrupp Uhde
• SunGas Renewables
• Sodra
• Proman
• OCI
• Mitsubishi
• Methanex Corporation
• Enerkem
• Cepsa
• Carbon Recycling International
• AVEL Energy
• AVAADA
• ANDRITZ
• Others

The Low-carbon Methanol Market is segmented as follows:

By Type

• Biomethanol
• E-Methanol

By Production Route

• Power to Methanol
• Biomethane Reforming
• Biomass Gasification
• Waste to Methanol

By End-Use

• Chemical
• Fuel

By Feedstock

• Biomass
• Carbon Capture & Utilization (CCU)
• Renewable Hydrogen + CO₂
• Natural Gas with Carbon Capture

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America