Renewable Methanol Market to Surpass USD 421.4 Mn by 2032

The Renewable Methanol Market, estimated at USD 247.5 Mn in 2025, is expected to exhibit a CAGR of 7.9% and reach USD 421.4 Mn by 2032.

The market growth is driven by rising demand for innovative and efficient solutions, coupled with evolving consumer preferences and increasing adoption across diverse end-use sectors. Technological advancements, product innovations, and strategic investments are enhancing performance, improving cost efficiency, and expanding application scope. Additionally, supportive regulatory frameworks and sustainability-focused initiatives are further propelling market expansion, creating new opportunities for industry stakeholders.

According to Renewable Methanol Market Report, By Primary Source (Biomass, Municipal Waste, Industrial Waste, and Others), By Application (Formaldehyde, Methyl Tert-butyl Ether (MTBE), Gasoline, Dimethyl Ether, Solvents, and Others), By Region (North America, Latin America, Europe, Asia Pacific, Middle East, Africa) as highlighted in a new report published by Coherent Market Insights.

Renewable methanol is derived from renewable sources such as biomass, municipal waste, and industrial CO2. It is considered as a second-generation biofuel. Renewable methanol can be used as a transportation fuel or as feedstock in chemicals. This fuel emits less amount of carbon emissions and can be used with motor fuels in order to improve their octane number. Power generation, manufacturing industries, and transportation are some of the major end users of renewable methanol.

Drivers

The easy and wide availability of feedstock for the production of renewable methanol is expected to accelerate the market growth. Renewable methanol is mainly manufactured by using municipal solid waste, biomass, industrial waste, and industrial CO2 by gasification and the catalytic conversion process. The raw materials used to produce renewable methanol are easily available worldwide. This is expected to propel the market growth.

Market Opportunities

Growth in the power generation industry especially across the Asia Pacific region is projected to offer potential growth opportunities to the renewable methanol market. According to India Brand Equity Foundation, the India renewable energy sector is the fourth most attractive renewable energy market in the world. As of October 2025, India’s installed renewable energy capacity (including hydro) stood at 165.94 GW, representing 40.6% of the overall installed power capacity. With the increased support of the government and improved economics, the sector has become attractive from an investor’s perspective. Hence, this opportunity is expected to boost the renewable methanol market over the forecast period.

Market Restraints

Lack of infrastructure for the production of renewable methanol is expected to remain a challenge for the market. Moreover, the high installation cost of the manufacturing facility for the production of renewable methanol is further expected to hamper the market growth. For instance, according to Methanol Institute and the report it produced with International Renewable Energy Agency, bio-methanol will cost US$700-$900/mt while e-methanol's cost looks will be US$1,200-$1,600/mt.

Renewable Methanol Market- COVID-19 Impact

According to OCI N.V., a leading producer of renewable methanol, renewable methanol prices are down as a result of COVID-19 and drop in oil prices. According to the company, the global demand for renewable methanol is expected to be affected as a result of economic slowdown. The company has postponed its methanol production to H12021. According to Coherent Market Insights, the renewable methanol market is expected to grow at a low CAGR of around 7.9% for a short term period till 2025.

To know the latest trends and insights prevalent in this market, click the link below:

https://www.coherentmarketinsights.com/market-insight/renewable-methanol-market-3907

Key Takeaways

• On the basis of region, Europe dominated the renewable methanol market in 2025 with a 29.4% of market share in terms of value, followed by North America and Asia Pacific respectively
• On the basis of application, the formaldehyde segment dominated the renewable methanol market in 2025 with 42.4 % of market share in terms of value, followed by Methyl Tert-butyl Ether (MTBE) and gasoline respectively