As the global drive toward net-zero intensifies, industries are seeking practical, scalable solutions to reduce greenhouse gas emissions. Renewable methanol is emerging as a key enabler in this transition, offering a low-carbon alternative derived from diverse and sustainable feedstocks such as biomass, municipal waste, and captured carbon dioxide.
Renewable methanol integrates seamlessly into existing infrastructure, offering a flexible solution for sectors where electrification remains challenging. From maritime shipping and aviation to heavy industry and chemical production, it is already playing a pivotal role in decarbonising operations.
Production pathways and technological innovation
Renewable methanol can be produced via two main pathways: bio-methanol and e-methanol. Bio-methanol is created through the gasification of renewable feedstocks such as agricultural residues, forestry by-products, and municipal solid waste. These materials are converted into synthesis gas, which is then transformed into methanol.
E-methanol is produced by combining captured carbon dioxide with green hydrogen generated via electrolysis powered by renewable energy, offering a scalable solution to decarbonising transport and industry.
A key challenge for e-methanol production remains the cost and scalability of green hydrogen. Currently priced between US$4 and US$9/kg, green hydrogen is expected to fall to US$2.5 – US$6 by 2030 as electrolysis technologies advance and renewable energy expands. Reducing these costs will be critical to scaling e-methanol commercially.
Recent advances, including Johnson Matthey’s eMERALD™ and biomass-to-methanol process technologies, are enabling large-scale production. The eMERALD™ process efficiently combines captured carbon dioxide with green hydrogen, optimising conversion rates for continuous operation. Biomass-to-methanol technology delivers integrated processes capable of converting varied waste feedstocks into syngas and then methanol with high carbon efficiency. These developments reduce the carbon footprint of methanol production and enable deployment in regions with diverse feedstocks and abundant renewable energy.
Market growth, policy drivers, and commercial opportunities
The global market for renewable methanol is expanding rapidly, supported by strong regulatory frameworks and corporate sustainability commitments. In the European Union, the Renewable Energy Directive III (RED III) sets binding targets for renewable fuels of non-biological origin, encouraging investment in low-carbon methanol. In the maritime and aviation sectors, the International Maritime Organization (IMO) has committed to reducing shipping’s annual greenhouse gas emissions by at least 20% by 2030 and achieving net zero by 2050, while the ReFuelEU mandate includes a 10% power-to-liquid sustainable aviation fuel (SAF) target by 2040, rising to 35% by 2050.
Momentum is driving development of methanol-to-jet (MtJ) pathways for SAF, while policies, carbon pricing mechanisms, subsidies, and tax incentives are accelerating adoption across transport and industry. In shipping, commercially available methanol-fuelled engines offer practical decarbonisation with minimal infrastructure changes. Road transport is also benefiting from methanol-to-gasoline technologies, supported by mandates such as the 1% e-fuels quota under RED III by 2030.
Beyond transportation, renewable methanol serves as an effective hydrogen carrier and contributes to decarbonisation in the chemical sector, energy storage, and grid balancing.
Ambitious large-scale projects around the world are translating policy and innovation into reality, demonstrating renewable methanol’s potential at scale. In South America, HIF Global is developing the world’s largest e-methanol facility in Paysandú, Uruguay. The plant, which will use Johnson Matthey’s eMERALD technology alongside electrolytic hydrogen and captured CO2 from an ethanol plant, aims to produce approximately 700 000 tpy of e-methanol, supporting decarbonisation across marine and automotive sectors.
In Europe, the La Robla Nueva Energia project in Spain, also using eMERALD technology, will produce up to 140 000 tpy of e-methanol by combining CO2 from a biomass plant with green hydrogen. The project will support across transport and industry while contributing to Spain’s ‘Just Transition Zones’ strategy to repurpose former coal-mining regions as green energy hubs.
Conclusion
With growing regulatory support, advancing technology, and increasing investment in large-scale projects, renewable methanol is poised to become an essential part of the global energy transition. Continued development of green hydrogen production and waste-to-methanol pathways will further enhance its role as a scalable, low-carbon, and versatile energy carrier. As industries seek practical, low-carbon solutions, renewable methanol is set to play a central role in achieving global climate goals and fostering a circular, sustainable economy.
For more information click here Johnson Matthey.