The green methanol economy is emerging in Denmark

Off-take agreements signal an industry ripe for growth

What does LEGO, the world’s largest toy company have in common with Maersk, the global container shipping company?

Other than both businesses being from Denmark, the answer is that both companies are looking to ‘green methanol’ to decarbonise their operations.

Methanol (CH3OH) is one of four basic chemicals - the others being ethylene, propylene and ammonia - used to manufacture all other chemical products. Around two-thirds of methanol produced is used in the manufacture of acetic acid, formaldehyde, and plastics (polyethylene and polypropylene in particular). The remaining one-third is mainly used as fuel, typically as an additive to unleaded gasoline to reduce emissions resulting from combustion.

Global methanol production has almost doubled over the past decade to a little less than 100 Mt, with most of the recent capacity growth occurring in China. Unfortunately, the majority of the worlds methanol production is based on fossil fuels. Methanol is made from syngas, a mixture of hydrogen, carbon monoxide and carbon dioxide (CO2) that is typically sourced from natural gas (accounting for ~two-thirds of the feedstock) or coal. Around three tonnes of CO2 are emitted for every tonne of methanol produced. Overall, the global methanol industry emits some 0.3 Gt CO2 per year, around one-tenth of total chemical sector emissions.

Green methanol is the ultra-low carbon version of this chemical. There are two types, bio-methanol and e-methanol. Bio-methanol involves replacing coal and natural gas as feedstocks with biomass or biogas. Feedstocks include municipal solid waste (MSW), wood and pulp waste, agricultural residues, etc. E-methanol meanwhile is produced by reacting green hydrogen (manufactured using renewable generation) with CO2 captured from direct air capture (DAC) or biogenic sources.

Green methanol is fast becoming a leading contender to decarbonise a range of industries. A green shipping fuel. A central building block for a decarbonised chemicals industry. A hydrogen carrier to enable long-term energy storage.

Lets look at the most promising opportunities.