Global Green Methanol Market 2025 – 2034

Reports Description

As per the Green Methanol Market analysis conducted by the CMI Team, the global Green Methanol Market is expected to record a CAGR of 34.04% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 2.54 Billion. By 2034, the valuation is anticipated to reach USD 42.3 Billion.

Overview

The green methanol market is expanding at a rapid pace as industry players are seeking the cleanest alternatives to fossil fuels. Green methanol is derived from biomass, CO₂ capture, and renewable electricity. These three processes make green methanol a sustainable fuel and a critical feedstock for use in chemicals, shipping, and power generation. The green methanol market growth is driven by the rising number of environmental regulations, technology development, and the transition toward decarbonization, with the shipping industry and other major industries championing greener fuel alternatives.

As a result, the green methanol market is expected to have significant expansion growth potential. Projections place the green methanol market at hitting a compound annual growth rate (CAGR) of upwards of 34% from 2025 to 2034. However, barriers include high renewable feedstock production costs and the growing logistics/infrastructure issue. The global tariff policies and trade disruptions caused some supply chain issues, which impacted the following trade scenarios. Overall, the market will grow as more companies lean towards utilizing sustainable fuel feedstock and cleaner production technology solutions.

Key Trends & Drivers                                                                                                  

The Green Methanol Market Trends present significant growth opportunities due to several factors:

• Regulatory Assistance and Environmental Policies: Governments around the world are implementing stricter climate change-related regulations in the form of targets or mandates requiring carbon emission reductions in various industries. In response, industries are adopting low- or no-carbon fuel sources such as green methanol as a response to these regulations, and organizations such as the International Maritime Organization (IMO) are targeting decarbonization of the shipping industry, creating demand for sustainable fuels. Furthermore, subsidies and incentives provided for the deployment of renewable energy technologies are expanding green methanol production and assimilation into the fuel mix as a viable alternative to traditional fuels while progressing transitional efforts towards a low-carbon economy.

• Technological Developments: Innovations in the green methanol production process, such as carbon capture and utilization (CCU) and innovative renewable energy-based electrolysis, have resulted in lower costs and better efficiencies, making green methanol more competitive with fossil fuels in several applications. Innovations in both carbon recycling and hydrogen production technologies also facilitate scaling green methanol production methods that may enable larger portions of the shipping and chemicals sectors to utilize decarbonized fuel sources and may contribute to market transformation and growth overall.

• A surge in interest from the shipping industry: The shipping industry is one of the largest users of green methanol, and it is undergoing a rapid transition toward low-carbon fuels to achieve the industry’s emissions targets on an international level. International Maritime Organization (IMO) carbon-reduction regulations have also prompted large shipping companies to invest heavily in methanol-powered ships. Green methanol has positioned itself as the ideal choice because of its compatibility with current marine engine designs and its significantly lower carbon footprint compared to some common marine fuel sources. As more shipping companies switch to green methanol, the green methanol market is projected to have significant uptake in the next several years.

• A multi-sectoral emphasis on sustainability and circular economy: Transitioning to sustainability and circular economy models is the primary driving force behind the green methanol market. Green methanol can be produced from waste materials, like agricultural waste, municipal waste, and captured CO2, all of which contribute to waste reduction and environmental sustainability. This gives it enormous appeal to industries and organizations that are trying to achieve stated sustainability and carbon reduction goals. As a variety of industries, including chemicals, automotive, and power generation, assess their commitment to greener production methods, it is expected that the green methanol market will develop and the green methanol market will expand sufficiently.

Significant Threats

The Green Methanol Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Cost of Production: High cost of production is perhaps the biggest threat to the green methanol market. Green methanol production utilizes renewable feedstocks, involves advanced technologies like carbon capture, and utilizes green hydrogen, all of which are more expensive than traditional fossil fuels. The differences in production costs make it difficult for green methanol to compete, making it an option in industries where pricing is a priority, including two major industries, shipping and manufacturing. This can prove challenging and slow adoption in the short term and help limit adoption in the long term, especially without increased scale or development of more affordable technologies, which will support lowering costs.

• Supply Chain & Infrastructure Developments: Currently, the supply chain and infrastructure that the green methanol market will need to address are challenging. There is currently very little investment in refueling infrastructure for green methanol, especially as it relates to the maritime and transportation sectors. There is potential for growth of the green methanol market to actively unlock industry-wide participation and innovation; however, currently, the sourcing of renewable feedstocks, transport to production facilities, and the final mile move to end users will result in inefficiencies. The absence of robust supply chains is hampering the position of those in the market during its growth phase, both for production and availability in critical markets. Long-term development and interventions to the supply chain challenges will be very important for the broader sector’s long-term growth.

Opportunities

• Emerging Opportunities for Sustainable Fuel in Shipping: One of the greatest opportunities for the green methanol market is the upward demand for sustainable fuels in shipping. The carbon emissions regulations put on marine cargo shipping will need to comply with International Maritime Organization (IMO) regulations, which is why green methanol is a genuine alternative to conventional fuels in shipping. Some countries have even established green methanol production as a policy objective, with major shipping companies committing to decarbonization goals using green methanol. There will be increasing regulatory pressure applied globally, increasing commercial adoption of green methanol, and demand signals from producers, and green methanol will become a new, key fuel for the shipping industry.

• Government Support for Clean Energy Implementation: The current regulatory landscape for clean energy solutions is expansive, with government support of all types, including more funding-related supportive mechanisms. Many EU nations recently passed or will be passing laws or providing benefits that create powerful incentives for producers to compete in the renewable energy market sector. Supportive government policy, for example, subsidies, tax credits, or other funding mechanisms, all solve the following equation of long-term price competition for green methanol production. Aggressive carbon reduction targets or other energy requirements will elicit clean energy opportunities as countries continue to explore alternative fuels for consumption. Ultimately, the combination of improved policy structures can lower production costs, grow the demand for green methanol, and provide a framework to scale the infrastructure for green methanol, all providing a solid line of business for a vastly growing market.

Category Wise Insights

By Production Method

• Biomass-based Methanol: Biomass-based methanol is produced using organic materials (agricultural waste, wood chips, etc.) by conversion to methanol through gasification. This method utilizes waste to produce methanol, contributing to the circular economy, reducing dependence on fossil fuels, and decreasing greenhouse gas emissions. This allows and supports sustainability for chemicals, energy, and other industries. With the growing amount of waste biomass, biomass-based biomass is projected to fuel growth in production techniques in regions where agricultural or forestry residues are abundant or available.

• Electrolysis-based Methanol (Green Methanol): Electrolysis-based production of methanol uses renewable electricity to create hydrogen (H2), which is then combined with captured CO₂ (using carbon capture technology) to produce methanol. Electrolysis-based methanol production is fundamentally sustainable, as it employs green hydrogen and carbon captured from industry and helps make massive reductions in carbon emissions. There is an opportunity for larger-scale manufacturing to meet demand from shipping and power generation while meeting the growing demand for green fuels.

By Application

• Transportation: One of the areas where Green methanol is now being used is in transportation as a green alternative fuel for vehicles and through maritime shipping. Green methanol is used in internal combustion engines or fuel cells – in cars, and as a significantly more environmentally friendly transport option than ‘dirtier’ fuels in maritime shipping. And since new international emissions regulations have now been imposed, we have already seen a shift to green methanol in heavy-duty transport like shipping and freight. When there are decarbonized transportation solutions that will help in all of the sectors, Green methanol will surely play an important part and be a cheaper investment than electric transportation options increasingly available, the demand must be met.

• Industrial: Green methanol is also used as a feedstock in a number of industrial processes such as chemical, plastics, and fertiliser. The use of green methanol as a renewable raw material is one more means of decreasing reliance on fossil fuels and supporting the worldwide economy’s transition to sustainability. Green methanol can also displace conventional methanol in energy-intensive industries to deliver a better carbon footprint. The chemical and petrochemical industries must take the lead in driving growth in these applications to meet procurement decarbonisation targets.

• Power Generation: Green methanol is being considered and used as a new fuel possibility for power generation, particularly in combined heat and power (CHP) systems. It can be used in methanol-based fuel cells or combustion engines to generate electricity; thus, it is cleaner than fossil fuel generation. As a renewable fuel, green methanol is appealing to areas that aim to decarbonize their energy grid. As we introduce renewable energy sources into our power generation systems, the increased utilization of green methanol will help offset carbon emissions as well.

By End-User Industry

• Shipping and maritime: The shipping industry is an important end-user of green methanol because of its emissions reduction capabilities to meet international regulations set down by the International Maritime Organization (IMO). Green methanol is usable as a marine fuel for methanol-fueled vessels, all valid and relevant for decarbonization targets. As marine companies start to transition into cleaner fuels, the adoption of green methanol will accelerate, especially in regions that are more environmentally conscious.

• Automotive: From within the automotive sector of the industry, green methanol can be utilized as an alternative fuel in combustion engines or as a fuel in fuel cells. By using green methanol, we can sustainably reduce carbon emissions. As the automotive sector implements stringent environmental regulations and increased terrestrial performance for internal combustion engines, demand for green methanol will grow, and the opportunities associated with green methanol when combined with hybrid and electric vehicle technologies will likely represent viable options for low-emission transportation.

• Chemical and petrochemical industries: As feedstock, green methanol is used extensively in chemical and petrochemical industries to produce essential products, including, but not limited to, formaldehyde, acetic acid, and plastics. The use of green methanol as a renewable raw material is a key strategy in reducing the carbon intensity in industrial production processes. With the planning of companies within the chemical industry.

Impact of Recent Tariff Policies

Recent tariff policies have had a huge impact on the green methanol space and have even influenced global trade as well as pricing models. In particular, recently implemented reciprocal tariff policies in the U.S. have impacted all traded goods, accounting for a 10% tariff on all imported goods, as well as additional surtaxes on some countries with a high degree of trade deficits. Due to these tariffs and higher costs for importing green methanol and green methanol-capable parts (if not all) downstream, the global supply chains have been affected.

From international producers looking into the North American market, one could see how much the costs of accessing it have increased, many looking into alternative shipping routes or regional hubs, even. The maritime sector is a notable consumer of green methanol, however, some procurement projects have been postponed or stopped due to a preference for short-term operational needs over long-term sustainability efforts. Tariff policies have increased the costs of the production of green methanol, which is ultimately less competitive than conventional fuel.

Stakeholders and others are reassessing strategy and placing all investments into the fuel and production capabilities before breaching into long-term greenhouse gas policies. Accordingly, stakeholders see more benefit in re-evaluating their green methanol production and investments in the context of strengthening these capabilities domestically and developing stable future policies around incentives and cost structures that support the development of green methanol.

Report Scope

Regional Analysis

The Green Methanol Market is segmented into various regions, including North America, Europe, Asia-Pacific, and LAMEA. Here is a brief overview of each region:

• North America: North America is becoming an important emerging green methanol consumer and producer, with the general leadership of the United States and Canada. Significant investments are being made in these regions specifically for renewable energy and clean fuel technologies, with verifiable regulatory frameworks actively reducing carbon emissions and targeting sectors such as transportation and power generation. The U.S. is proactive in supporting green methanol specifically and continuing the tendency to create government incentives and form obligations to increase government support for its adoption. Canada is developing green methanol production from renewable resources, including biomass and significant industrial CO₂ emissions. The market is anticipated to see some solid prospects with expected and ongoing rapid growth of the demand in both the shipping industry and chemicals sectors, along with promising federal and state initiatives.

• Europe: Europe is investing massively in sustainable fuel technologies and increasing production capacity while needing to achieve the climate ambitions of the European Green Deal. Green methanol is gaining traction in Europe, with countries like Sweden, Denmark, and the Netherlands having successfully deployed green methanol fuels in maritime and industrial applications. In addition to the clear merits of green fuels and product development efforts by established companies, emissions limits have established some significant areas of focus in developing clean fuels, with government subsidies, which have encouraged the development of the market. With multiple pilot projects and commercial deployments going live, Europe has substantial ability to develop and can continue growth in green methanol as an energy and fuel option in transportation, power generation, and beyond into chemicals.

• Asia-Pacific: The Asia-Pacific region, including China, Japan, and India, is in a rapid transition to green methanol as part of its strategy to decarbonize society. China, as a major industrial center for products and manufacturing, has been interested in green hydrogen production and CO₂ capture, which aligns with green methanol production as well. Japan is actively investing in methanol as a fuel to meet international marine emission standards. India is rapidly industrializing and increasing its reliance on renewable fuels in the energy mix, and specifically green methanol. The rising demand from this region, particularly in manufacturing, transportation, and power generation, offers numerous opportunities for green methanol.

• LAMEA: The Latin America, Middle East, and Africa (LAMEA) area is developing as a significant market opportunity for green methanol. Latin America has favorable renewable energy resources, with biomass leading the way to produce green methanol. Brazil is leading the way with its utilization of bio-based methanol from agribusiness waste. The Middle East is exploring the potential for green methanol produced from CO₂ in countries such as the UAE for power generation, transportation, etc. Africa also seems to be following a trend toward renewable energy, with the potential for green methanol to be adopted in a number of industries such as shipping, chemicals, etc. The increasing industrial base and the potential for renewable energy in LAMEA suggest long-term potential for future market growth.

Key Developments

In recent years, the Green Methanol Market has experienced several crucial changes as the players in the market strive to grow their geographical footprint and improve their product line and profits by using synergies.

• In May 2025, Methanex announced the acquisition of OCI Global’s international methanol business for $2.05 billion, which includes OCI’s interest in two world-scale methanol facilities in Beaumont, Texas. This acquisition enhances Methanex’s global production capacity and market reach.

• In April 2025, OCI announced the expansion of its Beaumont facility, doubling its production capacity to 400,000 tons per year. This expansion will utilize renewable natural gas and electrolysis-derived green hydrogen, aligning with the growing demand for sustainable marine fuels.

• In March 2025, CRI completed a feasibility study for its methanol-to-jet pathway at Iceland’s largest planned e-fuel facility. The facility aims to produce up to 70,000 tons of sustainable aviation fuel annually, utilizing green hydrogen and captured CO₂.

• In January 2025, GIDARA Energy secured an environmental permit for its Advanced Methanol Amsterdam (AMA) facility. The plant will produce bio-methanol from non-recyclable waste, contributing to significant carbon savings and supporting the renewable fuel transition.

• In February 2025, Liquid Wind announced the development of an eFuel facility in Örnsköldsvik, Sweden, expected to produce around 100,000 tonnes of eMethanol per year. This project will utilize green hydrogen and biogenic CO₂ to support sustainable fuel solutions.

These important changes facilitated the companies ability to widen their portfolios, to bolster their competitiveness, and to exploit the possibilities for growth available in the Green Methanol Market. This phenomenon is likely to persist since most companies are struggling to outperform their rivals in the market.

Leading Players

The Green Methanol Market is competitive, with a large number of product providers globally. Some of the key players in the market include:

• Methanex Corporation
• OCI N.V.
• BASF SE
• Södra
• Enerkem Inc.
• Carbon Recycling International (CRI)
• GIDARA Energy
• SunGas Renewables Inc.
• Proman
• Thyssenkrupp Industrial Solutions
• European Energy
• Eni S.p.A.
• Liquid Wind AB
• HIF Global
• Cepsa
• Mitsubishi Gas Chemical Company Inc. (MCG)
• Mitsui & Co. Ltd.
• Alberta-Pacific Forest Industries Inc.
• Veolia
• Andritz AG
• Others

These companies implement a series of techniques to penetrate the market, such as innovations, mergers and acquisitions, and collaboration.

The green methanol market operates as a product-driven market. This means companies are collecting and processing the successful production, development, and commercialisation of sustainable methanol from renewable feedstock, including biomass, renewable hydrogen, and captured CO₂.. Companies are using biomass-to-methanol production, electrolysis, and carbon capture and utilisation to produce sustainable methanol. Each of these methods has its advantages and disadvantages. Each phase of production will contribute to the company’s presence in the movement from fossil fuel energy towards alternative energy, relying on renewable sources.

The competitive landscape within the market consists primarily of a few leading companies (Methanex Corporation, OCI N.V., and Carbon Recycling International) that control the volume of production and the supply chain. Yet, they are also leading in the investment for new methods of green methanol innovation. The companies operating in the space (Enerkem Inc., GIDARA Energy, and Liquid Wind AB) are focusing on research and development and technological innovation variables to support efficient production while maintaining cost and reducing producers’ impact on the environment.

The market is highly dynamic, with these companies hoping to stay ahead by developing variable and unique production processes and products, having partners in government agencies, and being committed to agnostic sustainability. Companies will be competing indirectly as well because competition extends to multiple industries such as shipping, automotive, and chemical production, as green methanol is an emerging fuel and raw material to participate and contribute to a cleaner energy solution.

The Green Methanol Market is segmented as follows:

By Production Method

• Biomass-based Methanol
• Electrolysis-based Methanol (Green Methanol)

By Application

• Transportation
• Industrial
• Power Generation

By End-User Industry

• Shipping and Maritime
• Automotive
• Chemical and Petrochemical Industries

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