Biomethanol: Interest burning bright

Methanol is one of the largest petrochemical markets by volume and has become a feedstock for two of the other key petrochemical building blocks; ethylene and propylene, an end-use that has only been in commercial operation since 2010. 

The methanol industry has transformed itself over the last 20 years, and methanol is becoming an ever more versatile and important molecule.  The use of methanol can be divided into two categories: chemical-related and fuel-related applications.  In 2005, chemical derivatives (acetic acid, formaldehyde, and others) accounted for almost all methanol demand.  Nearly two decades later, chemical derivatives comprise 80 percent of methanol demand as fuel end uses (e.g., MTBE, gasoline blending, biodiesel, and DME), represent the remainder of methanol consumption. More than one-third of the demand in methanol-to-olefins is captive in coal-to-olefins plants, so it is not “seen” in the methanol market.  Overall, the growth in chemical derivatives and new fuel uses are more than matching the effect of reduced MTBE demand.

Methanol’s importance, but also it is simplicity as a one carbon molecule, makes it a prime target for more sustainable production processes.  Currently, it is produced from fossil fuel sources of either natural gas or coal, via syngas.  The conventional methanol production technology employs a two-step process.  The first step is the generation of synthesis gas (carbon monoxide and hydrogen) from natural gas or other hydrocarbon feedstocks such as naphtha, heavy oil, or coal.  In the second step, the synthesis gas produced is converted to methanol.  For gas-based processes, synthesis gas is produced through the reforming of hydrocarbon feedstocks.  For coal-based processes, synthesis gas is produced through the gasification of coal. The below figure illustrates the value chain for methanol.

Methanol Value Chain

Upstream – Feedstock Switching to Bio-Syngas

Biomethanol can be commercially produced via feedstock switching of conventional natural gas-based technologies to biogas, biomass (including MSW) gasification, biomass torrefaction and steam reforming of glycerol. These technologies can be combined with e-methanol in so called power to methanol technologies. Each has a different outlook, different carbon intensity, and different profile:

• Biogas: Though the biogas-based route is the easiest to implement, due to the need to simply switch feedstocks, the volumes required for economies of scale currently come at too high a price. Vertical integration may be required, and a hub and spoke model for biogas supply and upgrading will need to be implemented. Some of this is already occurring in clusters, such as in Germany. Biogas does offer a moderate carbon intensity reduction, and it also provides an opportunity to further lower emissions by capturing a concentrated stream of carbon dioxide during biogas upgrading. Currently, much of the biomethanol that is available and/or expected should be expected with significant green premiums due to production costs. Despite the high costs and prices, additional developments continue, albeit slower than the other routes.

• MSW and Other Biomass Gasification and Torrefaction: The MSW and other biomass gasification route solves a pressing issue: waste disposal.  MSW gasification offers the best economics, helped greatly by “tipping fees”, which are the waste disposal fees paid to the parties that take ownership of the waste. Currently, much of the biomethanol that is available and/or expected should be expected with significant green premiums due to large market demand for the small volume of the produced product. Additional developments are continuing rapidly.

• Steam Reforming of Glycerol: This route offers some of the lowest carbon intensities in analysis, and can be achieved at relatively competitive costs in come locations. However currently this route occurs only for glycerol produced as a byproduct of biodiesel production; to be competitive on a large scale other sources of glycerol must also be considered, which may require the technology to be adapted. Currently, much of the biomethanol that is available and/or expected should be expected with significant green premiums due to production costs.

The ideal method of methanol production would be the direct oxidation of methane to methanol via a one-step reaction as follows:

Although achieved on a laboratory scale, commercially viable catalysts that can selectively activate methane to methanol, with an acceptable methane conversion and reasonably high methanol selectivity, have yet to be established.^([1])  Today's practical methanol production technology still employs the less efficient two-step process consisting of first generating synthesis gas (carbon monoxide and hydrogen) from natural gas (methane) or other hydrocarbon feedstock, followed by conversion of the synthesis gas to methanol.

Natural gas-based synthesis gas can be produced via partial oxidation reaction and/or steam reforming reaction of methane as follows:

The steam reforming reaction is a highly endothermic reaction. It takes place inside the catalyst filled tubes of a reformer furnace. The endothermic heat is supplied externally by firing additional amounts of natural gas. Simultaneous to the steam reforming reaction, the water gas shift reaction also takes place:

The steam reformer requires a high steam to carbon ratio to prevent carbon from being deposited on the catalyst, thereby reducing its activity:

High steam-to-carbon ratios imply high consumption of energy in the process of vaporizing the required steam and also increased hydrogen production due to the water/gas shift reaction.

Alternatively, synthesis gas can be produced via catalytic or non-catalytic partial oxidation of methane. Partial oxidation is an exothermic reaction; thus, it does not require additional heat. However, since the partial oxidation reaction required pure oxygen, there is an implicit energy input in the form of power consumed in the generation of oxygen from atmospheric air in an air separation unit (ASU).

The conversion of synthesis gas to methanol is a strong exothermic process. The methanol synthesis reactions can be represented as follows:

The goal in methanol synthesis is to achieve relatively high carbon efficiency and thereby minimize the amount of synthesis gas to be processed and, thus, the natural gas or other feedstock consumption.

Downstream Implications

Sometimes referred to as the “liquid syngas,” methanol can be transformed into almost any other carbon-containing petrochemical or fuel via (mostly) commercially proven and proliferated technologies. In a few steps, methanol can be converted to the basic chemicals that form the backbone of the chemical industry—ethylene, propylene, butenes, and aromatics—including all major transportation fuels (gasoline jet and diesel. Low carbon intensity production of biomethanol can therefore be used to lower the carbon intensity of all the existing downstream petrochemical value chains as well. This fact, combined with its potential as a biofuel—particularly for marine applications, is driving interest and capacity developments in the space.

Global biomethanol capacity is expanding rapidly, driven by the increasing demand for chemicals from sustainable and renewable sources. Around 16.3 million tons of biomethanol capacity is currently either operational or in the pipeline, with the majority expected before 2030. This surge is fueled by over 70 projects announcements, spanning various stages from pre-feasibility to operational. The majority of projects are predicted in China, with Europe and North America also significantly contributing to new capacity.

The rapid expansion of biomethanol capacity underscores its critical role in the transition to low-carbon fuels, particularly for hard-to-abate sectors, with offtake agreements for marine transport continuing to rise alongside projects. This growth is supported by evolving policy frameworks, corporate investments, and technological advancements. For instance, the European Union's mandates through ReFuelEU Aviation and FuelEU Maritime regulations are driving the adoption of renewable fuels of non-biological origin, further bolstering the demand for biomethanol.

Conclusions

The main barrier to biomethanol production from is its cost, and the limited scale of biomethanol projects thus far. More specifically, biofeedstocks have a lower energy density per ton than fossil fuel feedstocks therefore either pre-treatment is required or a larger amount of feedstock per ton is required.

Production of methanol from biomethanol is only slightly limited by technology. The almost identical, proven and fully commercial technologies used to make methanol from fossil fuel-based syngas or coal (TRL 9) can also be used for biomethanol, with the addition of pretreatment steps. Production of RNG from biomass for subsequent use for methanol production has been proven commercially, despite the current financial drawbacks of this method. In the next few years, the construction of several large scale plants will demonstrate the ability to produce biomethanol at scale. The difficulty would mainly be in finding the required feedstock at a reasonable cost, which is also reliable in the long term.

A hybrid bio- and e-methanol plant in which the syngas obtained from biomass is complemented with green hydrogen is also a possible solution, with several plants expected to come online in the next 5 years. The combination of technologies will require a large amount of investment, but the resulting methanol would have a very low carbon intensity.

A progressive greening of methanol production is probably an appropriate pathway to introduce renewable methanol. Some of the “blue” methanol technologies being implemented today to produce what is called LCM are very important, especially the production of green hydrogen to supplement the production of methanol from natural gas. This should allow the gradual establishment of larger scale bio facilities which have secured the required amount of feedstock to not rely on supplemental natural gas or coal.

Key Reports

NexantECA’s key reports related to this blog include:

• Biorenewable Insights: Biomethanol (2025) - ​This report focuses on developments in the biomethanol industry sector. This includes routes from biogas, glycerin and MSW. Technology descriptions, key company profiles, cost of production model estimates, and capacity analysis is included as well as a discussion of impacts on the conventional industries.

• Biorenewable Insights: Biomass Gasification (Coming Soon in 2025) - This report investigates the various developments in biomass gasification for chemical and energy.  Several commercial technologies are analyzed in depth.  Analyses include technical descriptions, carbon intensity, and cost of production estimates.

^([1]) Juan D. Jiménez; Pablo G. Lustemberg. From Methane to Methanol: Pd-iC-CeO2 Catalysts Engineered for High Selectivity via Mechanochemical Synthesis. Journal of the American Chemical Society. 2024, 146, 38, 25986–25999.

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