The Next Frontier to Produce Bio-Methanol

Methanol is one of the most important ‘primary’ chemicals – a precursor to several chemicals, plastics and materials used in a wide range of applications. It is also a key fuel and input to fuel additives today, and expected to be a critical marine fuel in the future. Given that majority of production of methanol is based on fossil fuels, decarbonizing the production of methanol is a key lever in the journey to decarbonize the chemical and transportation industries. This article explores the de-fossilization of methanol production, examining the key production routes and potential solutions for decarbonization.

Where is Methanol Used?

Methanol is a key product in the chemical industry, used in hundreds of everyday products, as it is used as feedstock to produce other chemicals and as a fuel. It can be produced in several ways, from steam reforming of methane, reaction of hydrogen and CO2 to gasification of biomass. Let’s see each of them: 

• Steam Reforming of Methane: this is the most common method for producing methanol today. Methane, usually sourced from natural gas, reacts with steam under pressure and produces hydrogen (H2) and carbon dioxide (CO2). If, during this process, natural gas is substituted by biomethane, a renewable resource, the environmental impact of this production can be highly improved. Additionally to switching to biomethane, Carbon Capture, Utilization and Storage (CCUS) technologies can be incorporated to further decrease carbon emissions. This is bio-methanol.  
• Reaction of Hydrogen and Carbon Dioxide: this is an emerging alternative for producing methanol, where the chemical is synthesized from hydrogen and carbon dioxide. In this process, hydrogen is the compound that is modified. By using renewable energy, you can create “green” hydrogen via electrolysis. Another option is to generate “blue” hydrogen from natural gas with carbon capture technologies, where the CO2 used can be captured or recycled as biogenic CO. This is called e-methanol. 
• Gasification of Biomass: in this process, biomass, such as municipal solid waste or other biomass feedstock options, can be gasified to produce methanol. It leverages the carbon in organic waste materials to convert into valuable chemicals. The process involved heating the biomass at high temperatures with oxygen or steam to produce a gas that is later converted into methanol. This approach diversifies feedstock sources and promotes circular economy principles. This is bio-methanol. 

How is Methanol Produced?

Methanol serves as the cornerstone for the chemical industry, the energy sector and the maritime industry. Its role extends from chemical feedstock to marine fuel. 

• Chemical feedstock: methanol can be converted into a variety of products. Approximately 25% of methanol is used to produce formaldehyde, which is vital for creating resins, fertilizers, papers, and plywood. Another 25%, is transformed into olefins, key materials for a countless of products like plastics, detergents, adhesives, rubber, and food packaging. Beyond these, other uses of methanol are acetic acid (8%), chloromethanes (2%), methylamines (2%), and MMA (2%).  
• Fuels and fuel additives: Methanol is crucial in fuel and biofuel industries, with 11% going into Methyl Tert-Butyl Ether (MTBE) for fuel additives, and 14% enhancing gasoline through blending and combustion. Additionally, in the use of biodiesel and Dimethyl Ether (DME) production, each accounting for roughly 3%. Specifically in the maritime sector, this product is becoming increasingly important as it can be used as marine fuel.

Solutions to Decarbonize Methanol Production

To decarbonize or “defossilize” methanol production, there are several possible solutions that tackle different the different scopes of emissions.

• Transitioning to Renewable Natural Gas (RNG) or biomethane (scope 1 and 3): This not only tackles direct emissions from production processes (Scope 1) but also mitigates indirect emissions through the supply chain (Scope 3). For companies within the EU, particularly those governed by the EU Emissions Trading System (EU ETS), switching to biomethane could also lessen the requirement for EU Allowances (EUAs), which in the long term will offer more benefits.  
• Switching to Renewable Electricity (scope 2): To address Scope 2 emissions the industry is moving towards renewable electricity solutions. Mechanisms like direct procurement of EACs or long-term VPPAs reduce the carbon intensity of methanol production operations. If you wish to learn more about renewable electricity solutions, click here.  
• Biogenic CO2 (Scope 3): Biogenic CO2 is carbon dioxide that is already present within the natural carbon cycle, as the CO2 was captured in biological feedstock via photosynthesis and eventually released back into the atmosphere via natural degradation. Biogenic CO2 can be captured directly from the atmosphere (direct air capture – DAC) or within biomethane upgrading plants, where biogenic CO2 is extracted from biogas and can be captured and liquefied for downstream applications. Capturing biogenic CO2 and using it to produce Renewable Fuels of Non-Biological Origin (RFNBOs) downstream, such as e-methanol, enhances circularity and leads to neutral emissions once RFNBOs are burned. In general, the European Commission foresees clear deadlines for the utilization of fossil CO2 towards RFNBOs production, and after 2042 only biogenic CO2 will be accepted as an input. 
• Energy Efficiency (scope 1): Promoting energy efficiency is a key strategy for decarbonizing methanol production. This can be achieved through process optimization, waste heat recovery, and the use of advanced catalysts. White Certificates, also known as Energy Savings Certificates (ESC) or Energy Efficiency Credits (EEC), certify that a certain reduction of energy consumption has been achieved. They are tradable and combined with an obligation to achieve a certain target of energy savings, encouraging companies to exceed their energy-saving targets. Discover our Energy Efficiency solutions here.   
• For European companies, Complying with EU ETS: Through Vertis Environmental Finance, we assist companies to purchase EUAs and comply with the EU and UK ETS. Find our more here.  

Case Study: SKW Piesteritz

Starting in 2022, SKW Piesteritz, the largest producer of ammonia and urea in Germany, has partnered with STRIVE by STX to transition towards sustainable ammonia production. This shift reflects both environmental stewardship and a strategic business move, motivated by regulatory mandates and evolving market preferences.

Conclusions

The current process for methanol production is dominated by natural gas and coal, but the shift towards renewable natural gas, carbon capture and storage and renewable electricity is gaining momentum. These sustainable options showcase the industry’s commitment and willingness to evolve into a more sustainable future. As we start to see the green transformation begin, it is crucial for stakeholders to collaborate and push the boundaries to ensure a sustainable and profitable future for methanol production. 

How can STRIVE by STX help?

STRIVE by STX is currently working with pioneering bio- and green- methanol producers, helping them identify potential solutions for using greener chemical feedstock (e.g., bio-methane) and renewable power.  

Let STRIVE by STX also be your partner in defossilizing your operations. To find out more click here.