Methanol Market By Feedstock (Natural Gas, Coal, Biomass, CO2, Municipal Solid Waste (MSW), By Derivatives Formaldehyde, Acetic Acid, MTBE (Methyl Tert-Butyl Ether), DME (Dimethyl Ether), Methanol-to-Olefins (MTO), By End-Use Industry (Automotive, Construction, Electronics, Pharmaceuticals, Marine, Textiles, Energy, Other), Global Market Size, Segmental analysis, Regional Overview, Company share analysis, Leading Company Profiles And Market Forecast, 2025 – 2035

Industry Outlook

The Methanol market accounted for USD 35.8 Billion in 2024 and is expected to reach USD 65.2 Billion by 2035, growing at a CAGR of around 5.6% between 2025 and 2035. The Methanol Market is a collective term for all activities encompassing the production, sale, and consumption of methanol, an intermediate chemical used in the production of various goods and as fuel. Methanol is among the most important chemicals used in the manufacturing of chemicals such as formaldehyde, acetic acid, and olefins, a cleaner fuel for automobiles and boats. The main force behind the market development is the usage of methanol as fuel in power production and biodiesel and the growth of demand for green methanol produced from renewables due to environmental standards.

Report Scope:

Market Dynamics

Growing demand for cleaner fuels in automotive and marine industries

The ever-increasing requirement for clean energy is driving methanol across the automotive and marine segments as both industries stand pressured by growing environmental concerns. Methanol is considered a transport fuel and meets or exceeds environmental standards that are in place, including the ones on green gas and particulate emissions.  In the automobile industry, methanol is employed as a blending stock for motor gasoline and as a possible future gasoline pool for internal combustion engines and fuel cell electric power plants. In the marine industry, methanol is also being used as a fuel to meet the ever-tightening emissions standards set by the International Maritime Organization (IMO) for shipping. This shift is due to new regulations that require reduced sulfur emissions and decreased caps on greenhouse gases from oceangoing ships, making methanol a key solution for sustainable fuel both for marine and transportation industries. Also, it is easier to handle, store, and transport than some of the other available solutions, such as hydrogen. Due to high capital investments in green methanol generation, this fuel is estimated to play an even greater part in the transportation transition process.

Rising demand for methanol-derived chemicals in various applications

The increasing usage of methanol-derived chemicals is one of the driving factors behind the growth of the methanol market because methanol serves as the primary feedstock for manufacturing various chemicals for instance, Formaldehyde, Acetic acid, and Olefins. These methanol derivatives are found in almost all industries ranging from construction, plastics, paints, and even pharmaceutical industries. Both formaldehyde and acetic acid have their uses in generating resins that are used especially in the construction sector as well as in the manufacture of automobiles. Another relatively advanced technology is methanol-to-olefins (MTO) since the production of ethylene and propylene, which are constituents of plastics and packaging materials. This versatility of methanol in these downstream chemical processes has boosted its consumption because industries are always in search of better and cheaper feedstock materials. In addition, the increased use of lightweight materials in automotive and aerospace industries using methanol-based chemicals also catalyzes the market. Since the change in global industries towards sustainable products, the use of methanol in synthesizing bio-based chemicals is set to increase.

Competition from alternative technologies like hydrogen and electric vehicles

It includes the availability and competition from other fuels such as hydrogen and electrical energy in energy-producing vehicles as Nailor explains. With a growing focus on the decarbonization of industries around the world, hydrogen fuel cells and EVs have been experiencing a significant level of demand owing to their virtually non-existent carbon footprint and supported by growing governmental promotion using subsidies and policies. Hydrogen is being made as a low, multi-purpose fossil fuel that directly targets methanol energy in the transport sector and electric power industries. In the same way, an increasing number of Electric Vehicle charge Points and faster tapering costs for Lithium-Ion Batteries have shifted the paradigm of the automobile industry by replacing methanol as an automobile fuel. However, it is more appealing due to the growth in hydrogen production technologies and the drive for renewable energy sources. As these technologies develop and claim the market in the transportation and energy spheres, their further development might slow down the methanol demand in the corresponding fields.

Expansion of renewable methanol production from sustainable sources

The new production of renewable methanol is becoming popular as industries and governments are trying to reduce carbon intensity and shift toward sustainable production. Renewable methanol can be synthesized from bioethanol, Carbon dioxide capture and utilization, and municipal solid waste, whereby the carbon footprint is considerably reduced as compared with methanol derived from fossil feedstock. Switching to green methanol is cheap due to the increasingly stringent environmental conservation laws and policies across the world, especially concerning the use of fuel in sectors such as transport, energy, and chemical-related industries. CCU technologies are being developed to improve renewable methanol production as firms continue to fund its research and development. Demand for cleaner production methods is increasing, hence opening a market for renewable methanol to be adopted by anyone who wants to get a competitive edge. Governments have been giving incentives and subsidies, energy, and finances to renewable methanol projects that have boosted market growth. With continued advancement in the field of renewable resources, the methanol industry could go a long way in the global war on carbon.

Growing interest in methanol-to-power solutions in developing regions

Methanol-to-power solutions have recently delighted an increased interest, specifically in the developing areas because of the advantageous characteristics of the methanol fuel. In areas where access to secure electricity distribution networks is still a rarity, methanol can be used to generate electricity either directly or using fuel cells. This is even more attractive to countries that are interested in diversifying their energy sources and would like to greatly minimize the use of conventional fossil energy. One more advantage of methanol is its capacity to be made from renewable materials, which increases the chances of its use and makes it regarded as an efficient source of energy. Methanol also finds application in distributed power generation; this provides flexibility in the energy supply system. 

Emerging regions are using methanol as a cost-effective path of energy fulfillment to meet international emission standards. Since these regions are investing in the power industry, the methanol-to-power application is proving to be a good avenue of growth for its market. Moreover, there is growing global support as well as a technology-sharing program, which is enabling the growth of methanol power solutions in developing regions at a faster pace. This trend makes methanol an essential energy source for power in rural areas and as an industrial fuel.

Industry Experts Opinion

“The green methanol producers in China are mainly pursuing ISCC EU certification which means it is compliant for use in Europe. With FuelEU kicking in, it will be even more ideal for shipowners to switch to using lower carbon and carbon-neutral methanol as a sustainable marine fuel.”

• Chris Chatterton, methanol industry expert, The Maritime and Port Authority of Singapore (MPA)

Segment Analysis

Based on Feedstock, the Methanol Market segmentation includes Natural gas, coal, biomass, CO2, and municipal solid waste, including a satisfactory level of technological advancement. Natural gas is the most used feedstock because of its availability and cheaper price than other feedstocks, especially in some regions such as the Middle East and North America. Coal is another popular feedstock in China, and almost all plants operate through coal-to-methanol conversion. Biomass and CO2 are being increasingly used in methanol production because of the rising interest rate on sustainable sources of energy. Further, the use of MSW as a feedstock is on the rise, yielding a solution to waste management and carbon.

Based on the end user, methanol has a wide application across a variety of different industries. Methanol is employed in automobile manufacturing for the use of methanol as a cleaner fuel and in the manufacturing of formaldehyde used in the production of parts of vehicles. The construction industry sources methanol-derived chemicals for formaldehyde for things like building materials, and electronics source methanol chemical manufacturing. Specifically, methanol is used as a solvent as one of the drugs in the pharmaceutical industry. The use of methanol as a fuel in the marine industry is on the rise, while methanol derivatives are used in the production of dyes and fabrics in the textile industry. Last, the energy segment adapts methanol in biodiesel use to fuel vehicles and prompts methanol-to-power applications globally due to the need for clean fuel sources.

Regional Analysis

Asia-Pacific holds the largest market share as it has huge industrial growth and a higher trend for methanol consumption from industries like chemical, construction, and energy, among others. China is in a leading position both as a producer and consumer because of the abundance of coals and an increasingly large number of MTO units. The region’s dominance is further influenced by fast-growing industrialization, large capital spending on methanol-based fuel stocks, and rising methanol derivative demand in the automobile and construction sectors. Some of the largest companies around the world convert low-cost coal feedstock located in China, thus making it the world’s largest producer of methanol. Other countries, like India, also intervene in the regional market with rising demand in the sectors, including energy and chemicals.

The Middle East and Africa are the fastest-growing regions of the methanol market because of the availability of natural gas feedstock for methanol production. Globally, nations such as Saudi Arabia and Iran have stepped up their investments in increased production of methanol. This growth is also sustained by the position of the region about export markets in Europe and Asia, as well as higher demand for methanol derivatives in the construction industry, automotive industry, and as a fuel. Export demand was met by petrochemical industries and governmental inclination towards shifting its economy further in the growth pace of methanol in this region.

Competitive Landscape

The Methanol market is highly competitive, having major Global participants such as Methanex Corporation, SABIC, BASF SE, and Mitsubishi Gas Chemical Companies, which have sustained their positions with high production facilities, strategic partnerships, and value-added long-chain supply systems. Such enterprises are motivated by research and development as well as environmental policy, targeting the production of renewable methanol from biomass and utilizing carbon recycling to address the environmental standards and the need for cleaner fuels.

Minor players are also engaged in capacity addition, especially China, mainly motivated by the availability of coal-based methanol feedstock. Some of the business-level strategies include market growth through overseas acquisition to have a wider market, increased production capacity to meet the increasing demands of the market, and vertical integration through association with industries such as automobiles, construction, and chemicals. More so, companies are also shifting towards green methanol production, meaning that there are chances for competitive advantage when taken against the backdrop of rising global emissions standards.

Methanol Market, Company Shares Analysis, 2024

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Recent Developments:

• In January 2024, BASF SE and Envision Energy announced they would jointly develop technology to convert green hydrogen and CO2 into sustainable methanol. Envision Energy will develop its process using BASF SE's catalyst technology and will then license it to its customers so that they can build larger, sustainable methanol or e-methanol plants
• In January 2024, Enerkem announced that it would be retiring its Enerkem Alberta Biofuels (EAB) plant in Edmonton. The facility achieved its main objective of completing the commercial scale-up of Enerkem’s industry-leading technology with more than 15,000 hours of operation producing ethanol and methanol.
• In January 2024, Fairway Methanol is a 50-50 joint venture between Mitsui & Co. and Celanese Corporation that began the production of methanol by using carbon dioxide emitted from plants surrounding the venture’s facility.

Report Coverage:

By Feedstock

• Natural Gas
• Coal
• Biomass
• CO2
• Municipal Solid Waste (MSW)

By Derivatives

• Formaldehyde
• Acetic Acid
• MTBE (Methyl Tert-Butyl Ether)
• DME (Dimethyl Ether)
• Methanol-to-Olefins (MTO)

By End-user

• Automotive
• Construction
• Electronics
• Pharmaceuticals
• Marine
• Textiles
• Energy
• Other

By Region

North America

• U.S.
• Canada

Europe

• U.K.
• France
• Germany
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Australia
• South Korea
• Singapore
• Rest of Asia Pacific

Latin America

• Brazil
• Argentina
• Mexico
• Rest of Latin America

Middle East & Africa

• GCC Countries
• South Africa
• Rest of the Middle East & Africa

List of Companies:

• Methanex Corporation
• BASF SE
• Celanese Corporation
• SABIC
• Mitsubishi Gas Chemical Company Inc.
• Mitsui & Co. Ltd
• OCI N.V.
• LyondellBasell Industries Holdings BV
• Petroliam Nasional Berhad (PETRONAS)
• HELM Proman Methanol AG
• Ningxia Baofeng Energy Group Co. Ltd
• Eni SpA
• Kingboard Holdings Limited
• Enerkem
• Gujarat State Fertilizers & Chemicals Limited (GSFC)
• Zagros Petrochemical Company (ZPC)

Frequently Asked Questions (FAQs)