Renewable Methanol Market Analysis & Forecast: 2025-2032

Global Renewable Methanol Market Size and Share Analysis - 2025 to 2032

Renewable Methanol Market is estimated to be valued at USD 247.5 Mn in 2025 and is expected to reach USD 421.4 Mn in 2032, exhibiting a compound annual growth rate (CAGR) of 7.9% from 2025 to 2032.

Key Takeaways

• On the basis of Primary Source, Biomass Segment is poised to hold the largest market share of 42.4%. This is because of its extensive availability, affordability, and mature conversion technologies for renewable methanol manufacture.
• North America dominated the market for renewable methanol in 2025 with 29.4% market share. This is due to generous policy support, advanced infrastructure, and growing demand from industrial and transport segments in the region.

Market Overview

The green methanol market is being spurred by the worldwide drive for carbon neutrality, the transition to low-carbon energy, and decarbonization in hard-to-abate sectors like shipping, chemicals, and heavy industry. Renewable methanol, produced from biomass, CO₂, and green hydrogen, is a scalable, technology-ready replacement for fossil-derived methanol, reducing lifecycle greenhouse gas emissions by as much as 95%. New technologies in carbon capture, electrolysis, and syngas processing are lowering cost and making manufacture more sustainable. The production of renewable methanol is also spurred by demand for hydrogen economies and circular carbon systems.

Current Events and Its Impact on Renewable Methanol Market

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Microeconomic and Macroeconomic Factors Impacting Growth - Renewable Methanol Market

Microeconomic Factors Impacting Growth – Renewable Methanol Market

1. Production Costs & Feedstock Availability: Costs of renewable electricity (for green hydrogen) and sustainable carbon sources (e.g., CO₂ capture or biomass) directly affect profit margins and scalability.
2. Technological Advancements: Innovation in electrolysis, carbon capture, and methanol synthesis technologies lowers barriers to entry and boosts efficiency.
3. Company-Level Strategies: Strategic partnerships, investments in R&D, and vertical integration by key players (e.g., European Energy, Methanex, Mitsui & Co.) shape competitive dynamics.

Macroeconomic Factors Impacting Growth

1. Global Decarbonization Policies: Climate targets, such as the EU Green Deal, IMO regulations, and national net-zero commitments, are major drivers of renewable fuel adoption.
2. Government Incentives & Subsidies: Tax credits, green fuel mandates, and subsidies for green hydrogen and carbon capture enhance project feasibility and market penetration.
3. Energy Market Trends: Fluctuations in fossil fuel prices and renewable energy costs influence investment decisions and substitution patterns.
4. International Trade Dynamics: Trade policies, tariffs, and international collaboration on green fuels (e.g., EU–Asia shipping corridors) impact cross-border production and export opportunities.

Renewable Methanol Market: Growth Drivers

• Rise in the demand for renewable methanol as a motor fuel

The increasing use of global renewable methanol across the transportation industry is projected to augment the market growth. Renewable methanol is produced from natural gas, coal and landfill waste, wood waste, and seaweed.

Methanol, which is made from sustainable biomass, is a long-term greenhouse gas reduction transportation fuel preference. It reduces greenhouse emissions by 15-20% as compared to gasoline. It is often used as a motor fuel and also has the highest hydrogen-to-carbon ratio as compared to liquid fuel owing to its high-octane number.

It is a liquid fuel that can be mixed with petrol and ethanol and utilized in today's vehicles with minimum additional expenditures. It is a completely safe fuel. The toxicity is equivalent to, if not superior to, that of petrol. In the event of a spill, it also biodegrades immediately.

• Growth in environmental issues

Increasing environmental issues due to global warming and changing weather conditions are fueling the renewable methanol market growth. Since, renewable methanol reduces carbon dioxide emissions by up to 95%, nitrogen oxide emissions by up to 80%, and sulfur oxide and particulate matter emissions are totally eliminated when compared to traditional fuels.

Market Trends

Increasing adoption of advanced and eco-friendly technology for the production of renewable methanol is expected to foster market growth. In May 2025, the Kasso plant in southern Denmark began commercial operations, producing 42,000 t/year of e‑methanol using Siemens PEM electrolysers powered by the region’s largest solar park, combined with CO₂ from biogas and waste incineration.

Segmental Insights

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  Renewable Methanol Market Insights, By Primary Source

On the basis of primary source in 2025, the biomass segment has accounted the largest market share of 42.4% in terms of value, followed by municipal waste and industrial waste segment respectively. As per European Technology and Innovation Platform BioMCN in the Netherlands produces methanol from biomass by gasifying glycerine, a byproduct of biodiesel manufacturing.

The thermochemical conversion of syngas to methanol is well understood for fossil feedstocks, and the essential stages for biomass are the same. The fundamental difficulty is the economic feasibility of gasifying biomass at high pressures and conditioning raw synthesis gas. Integrating municipal solid waste (MSW) gasification with renewable energy to synthesize methanol shows great potential in alleviating the dependence on fossil energy and reducing the negative environmental impact of increasing MSW production.

Methanol is currently produced from natural gas, but it may also be produced from wood waste or rubbish by a partial oxidation reaction into syngas, followed by catalytic conversion into methanol, a process known as bioethanol.

Regional Insights 

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North America Renewable Methanol Market Analysis and Trends

North America dominated the renewable methanol market in 2025, accounting for 29.40% share, followed by Europe and Asia Pacific, respectively. Europe has the largest global share of this market. In comparison to fossil fuels, the renewable methanol is gaining popularity among consumers because it is renewable plus safe for the environment.

Methanol is less costly to produce than other alternative fuels. Additionally, it is less flammable than petrol. Methanol can be further produced from a variety of domestic carbon-based feedstock, including biomass, natural gas, and coal.

According to the government of India, Ministry of Road Transport and Highways, methanol 15 (m15) in petrol will reduce pollution by 33% and diesel replacement by methanol will reduce by more than 80%. Europe held the dominant position in the Renewable Methanol Market.

Other countries, such as Saudi Arabia and China, offer significant growth opportunities for manufacturers looking to expand their presence in these markets. The growing popularity of such products is also attributed to the increasing adoption of renewable methanol globally.

Renewable Methanol Market Dominating Countries

China Renewable Methanol Market Analysis

China is the globe's largest methanol producer and consumer and commands more than 60% of world demand. Although the majority of methanol is still fossil-based, the nation is rapidly advancing renewable methanol projects through robust state policy backing and investment in green hydrogen and biomass use. China's enormous industrial platform and increasing demand for clean fuel place it at the forefront of future growth in renewable methanol.

Denmark Renewable Methanol Market Analysis

Denmark is leading the world in commercial-scale e-methanol production with facilities such as European Energy's Power-to-X plant. With the support of Maersk, the world's largest shipping group, Denmark is producing green hydrogen from wind power and e-mechanizing it. Denmark is therefore a leader in maritime fuels decarbonization.

Germany Renewable Methanol Market Analysis

Germany is at the forefront of renewable methanol with its circular carbon economy and national hydrogen strategy goals. With state-backed aid well-supported financially, the German industry is constructing e-methanol factories from renewable energy and CO₂ captured, largely in chemicals and transport markets.

United States Renewable Methanol Market Analysis

The U.S. renewable methanol market is rising progressively, led by federal incentives including the Inflation Reduction Act and state low-carbon fuel mandates in states like California. Biomass-based methanol projects are emerging, and organizations are exploring e-methanol to be used for transportation as well as electric power generation.

Market Report Scope

Renewable Methanol Market Report Coverage

Renewable Methanol Market Recent Developments

• In August 2025, Mitsui & Co. launched the world's first commercial-scale e-methanol production in Denmark in collaboration with European Energy.
• In October 2024, Maersk signed a long-term agreement with LONGi Green Energy (China) to supply bio-methanol derived from agricultural waste. The deal aims to fuel Maersk’s growing fleet of methanol-powered vessels starting in 2026.

Analyst View

• The renewable methanol industry is on the verge of major change as worldwide focus on environmentally friendly energy solutions increases. One of the main drivers pushing this industry forward is escalating demand for cleaner fuels to reduce greenhouse gas emissions, combined with favorable government policies toward carbon neutrality. Renewable methanol from biomass, municipal solid waste, or captured carbon dioxide presents a viable alternative to traditional fossil fuel-based methanol. Yet, production expense and technological hurdles in the scaling of renewable methanol synthesis are significant restraints limiting quick uptake.
• There are numerous opportunities for growth in new uses like ocean fuels, where low sulfur emission standards propel the use of low-carbon substitutes. Furthermore, renewable methanol as a feedstock for the manufacturing of chemicals also holds out growth opportunities. Asia-Pacific is becoming the region with the most growth, driven by growing investments in renewable energy infrastructure and aggressive environmental policies from China and Japan. Europe retains its market supremacy with mature renewable energy policies and established supply chains.
• In addition, new technologies for carbon capture and utilization will improve the economic sustainability of renewable methanol production. Partnerships among energy firms and technology companies for streamlining production processes can also drive market penetration further. However, the market needs to overcome supply chain constraints and regulatory risks in some regions to achieve its true potential. In totality, the renewable methanol market is a promising area for investment and innovation as businesses globally pursue sustainable and environmentally friendly energy solutions.

Market Segmentation

• Global Renewable Methanol Market, By Primary Source
• Biomass
• Municipal Waste
• Industrial Waste
• Others
• Global Renewable Methanol Market, By Application
• Formaldehyde
• Methyl Tert-butyl Ether (MTBE)
• Gasoline
• Dimethyl Ether
• Solvents
• Others
• Global Renewable Methanol Market, By Region
• North America
• U.S.
• Canada
• Europe
• U.K.
• Germany
• France
• Italy
• Spain
•  Russia
• Rest of Europe
• Asia Pacific
• China
• India
• Japan
• ASEAN
• Australia
• South Korea
• Rest of Asia Pacific
• Latin America
• Brazil
• Mexico
• Rest of Latin America
• Middle East
• GCC
• Israel
• Rest of Middle East
• Africa
• Central Africa
• South Africa
• Company Profiles
• Methanex Corporation
• Carbon Recycling International
• BioMCN
• Enerkem
• Chemrec Inc.
• Varmlands Methanol

Sources

Primary Research interviews

• Renewable Methanol Manufacturers
• Industry Experts & Consultants
• Key End Users (e.g., Fuel & Chemical Companies)
• Regulatory Authorities
• Others

Databases

• IHS Markit
• Bloomberg New Energy Finance
• Others

Magazines

• Methanol Institute Magazine
• Renewable Energy World
• Chemical Engineering Magazine
• Others

Journals

• Journal of Cleaner Production
• Renewable & Sustainable Energy Reviews
• International Journal of Hydrogen Energy
• Others

Newspapers

• Financial Times
• The Wall Street Journal
• Reuters
• The Economic Times
• Others

Associations

• Methanol Institute
• International Renewable Energy Agency (IRENA)
• American Chemical Society (ACS)
• Others

Public Domain sources

• U.S. Energy Information Administration (EIA)
• International Energy Agency (IEA)
• World Bank Open Data
• Others

Proprietary Elements

• CMI Data Analytics Tool
• Proprietary CMI Existing Repository of information for last 8 years

*Definition: Renewable methanol is a low-carbon chemical derived from sustainable biomass, often known as bio-methanol, or from carbon dioxide and hydrogen generated by renewable power. Renewable methanol is made from renewable materials such as industrial waste and biomass. It is an important component in the creation of biodiesel, which may be utilized with car fuels. Renewable methanol is widely utilized in the energy, transportation, vehicle, and chemical production industries. It helps reduce carbon dioxide emissions by 60%-80%.