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 emission 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-user of renewable methanol.
Global renewable methanol market is estimated to account for around US$ 161.2 million in terms of value in the year 2019 and it predicted to grow at a CAGR of 6.5% during the forecast period (2020-2027).
The easy and wide availability of feedstock for the production of renewable methanol is expected to accelerate market growth. Renewable methanol is mainly manufactured by using municipal solid waste, biomass, industrial waste, and industrial CO2 by gasification and catalytic conversion process. The raw material used to produce renewable methanol is easily available around the globe. This is expected to propel the market growth.
Growth in the power generation industry especially across the Asia Pacific region is projected to offer a potential opportunity to the market of renewable methanol. According to the India Brand Equity Foundation, India is ranked fourth in wind power, fifth in solar power, and fifth in renewable power installed capacity as of 2018. India ranked sixth in the list of countries to make most investments in clean energy with US$ 90 billion. The total installed capacity of power stations in India stood at 368.68 Gigawatt (GW) as of January 2020. Electricity production reached 1,050.78 BU in 2020.
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.
On the basis of region, Europe region dominated the global renewable methanol market in 2019 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 global renewable methanol market in 2019 with 29.8 % of market share in terms of value, followed by methyl tert-butyl ether (MTBE) and gasoline respectively.
Shifting preferences of the manufacturer to increase the production capacity of renewable methanol is expected to be a major trend in the market. This is attributed to the growing need for expanding their presence in the market and meet the growing demand for renewable methanol around the globe. For instance, in November 2018, BASF announced that it has started the production of methanol-based on renewable raw materials. Named EU-REDcert-methanol, the product is made from second-generation raw feedstock and uses waste as well as residual materials.
Renewable fuel standard
Renewable methanol offers emission benefits as much as 95% greenhouse gas emission as compared to other conventional fuels. The major focus of these policies and regulations is to reduce greenhouse gas emissions.
In addition to this, Sweden has exempted the taxes on renewable methanol, which has also encouraged the consumption of renewable methanol
Global Renewable Methanol Market - Impact of Coronavirus (Covid-19) Pandemic
According to OCI N.V. (leading producer of renewable methanol), renewable methanol prices are down as a result of COVID-19 and drop in oil prices. According to company, 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 global renewable methanol market is expected to grow at a low CAGR of around 3% for a short term period till 2021.
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