What is methanol fuel - and what is it used for?

Decarbonising certain stubborn industries requires exploring all of our options and one of the most controversial options is methanol - but what is it and what can it do?

Methanol (CH₃OH) is a liquid chemical that can be used as a fuel or fuel additive. It is produced from various feedstocks, including natural gas, coal, biomass, and captured carbon dioxide (CO₂) combined with green hydrogen.

Methanol has been used for decades in industrial applications, but its role as a clean fuel has been gaining attention due to its potential to help decarbonise multiple sectors.

However, there are significant problems with methanol, in both production and combustion. Truly, it has the potential to create as many problems as it solves. So, what is methanol fuel, exactly?

How is methanol fuel produced?

Methanol can be produced using different methods, each with varying environmental impacts. Fossil-based methanol is produced from natural gas or coal, contributing to CO₂ emissions.

Bio-methanol is derived from biomass sources such as agricultural waste or forestry residues, reducing net CO₂ emissions.

E-methanol, or Green Methanol, is created from captured CO₂ and green hydrogen (produced via electrolysis using renewable electricity), making it nearly carbon-neutral.

Applications of methanol fuel

Methanol’s versatility makes it a promising option for decarbonisation in several industries. The shipping industry accounts for a significant share of global greenhouse gas emissions.

Methanol can be used as a cleaner-burning alternative to traditional heavy fuel oil, significantly reducing sulfur oxide (SOₓ), nitrogen oxide (NOₓ), and particulate matter emissions.

Major shipping companies are investing in methanol-powered vessels, including dual-fuel engines that can transition from fossil fuels to green methanol as production scales up.

In road transport, methanol can be blended with gasoline (e.g., M15 or M85 blends) or used directly in modified internal combustion engines.

Some countries, such as China, already use methanol in transportation to reduce oil dependency and emissions. Compared to conventional gasoline, methanol combustion results in lower CO₂ emissions and pollutants.

While direct methanol use in aviation is still under research, it can serve as a feedstock for Sustainable Aviation Fuel (SAF), enabling airlines to lower their carbon footprint. Methanol can also be used in gas turbines and fuel cells to generate electricity with lower emissions than fossil fuels.

Its liquid state at ambient temperatures makes it easier to transport and store compared to hydrogen or liquefied natural gas (LNG).

In industrial applications, methanol is used as a feedstock for producing chemicals like formaldehyde, acetic acid, and plastics, offering industries a way to shift toward greener alternatives by sourcing methanol from renewable sources.

Can methanol fuel help to decarbonise?

Methanol’s ability to act as a bridge fuel in the transition to a low-carbon economy makes it particularly valuable. It has a lower carbon intensity, with green methanol, when produced from renewable energy and captured CO₂, having a near-zero or even negative carbon footprint.

It is also compatible with existing fuel distribution networks, storage facilities, and engines, requiring relatively minor modifications.

Methanol contributes to energy security by diversifying energy sources and reducing reliance on fossil fuels, enhancing energy independence and resilience. Additionally, it reduces sulfur and nitrogen emissions in transport and industry, improving air quality.

What are the challenges of methanol fuel?

Despite its benefits, methanol fuel faces some challenges. Green methanol production is still limited and requires significant investment in renewable energy and carbon capture.

Its energy density is lower compared to diesel and gasoline, necessitating larger fuel storage or more frequent refueling. Cost competitiveness is another issue, as fossil-based methanol is currently cheaper than green methanol.

However, policy incentives like carbon pricing and subsidies could help bridge the gap.

Whilst methanol is less carbon-intensive than conventional fossil fuels,its environmental impact depends on how it is produced and used. When burned, methanol produces lower levels of particulate matter (PM), nitrogen oxides (NOₓ), and sulfur oxides (SOₓ) than gasoline or diesel, making it beneficial for urban air quality.

If made from captured CO₂ (e-methanol) or biomass (bio-methanol), methanol can have low or even negative carbon emissions over its lifecycle. Additionally, methanol is biodegradable and dissolves in water, making spills less environmentally damaging than petroleum-based fuels.

But methanol combustion still releases CO₂, meaning that unless it is produced using captured carbon or sustainable biomass, it remains carbon-positive. So, it's a major challenge is that most methanol today is derived from natural gas or coal, making it dependent on fossil fuels.

Additionally, methanol has a lower energy density than gasoline or diesel, meaning that larger fuel storage or more frequent refueling is required. Another concern is its toxicity, as methanol is hazardous if ingested, inhaled in high concentrations, or absorbed through the skin.

Methanol fuel presents a viable pathway for reducing carbon emissions across various sectors, especially in shipping, transport, and industrial applications. With continued technological advancements, investment, and policy support, methanol could play a critical role in the global energy transition toward a more sustainable future.