In this week’s Market Movers Americas, presented by Hope Raymond: • Agriculture markets watch for...

This report is part of the S&P Global Commodity Insights' Metals Trade Review series, where we dig...

India's crude run rates may witness a lean patch in coming months as more refiners plan maintenance,...

Green methanol key to energy transition net-zero plans

Asian polymer exports to Europe tick up as regionalisation ebbs

Trainings courses at Global Carbon Markets Conference

Trade Review: Alumina markets brace for cost pressures, demand uncertainties in Q4 amid energy concerns

Full circle: Advanced recycling closes the plastics loop

As more industries begin their energy transition journey, companies are increasingly turning to "green" methanol to help reduce harmful emissions entering the atmosphere through their chemical production process.

The majority of world's methanol is currently produced from carbon dioxide coming from gas, and is typically called fossil methanol. Carbon emissions during methanol production using synthesis, or natural gas, can vary depending on the feedstock quality and gas sourcing. Methanol production from coal, which takes place only in China, has an even higher carbon footprint.

While grey methanol is currently prevalent in the bunker fuel industry, it is green methanol that will help it meet net-zero goals.

"Similar to ammonia, the international longer haul fleets will benefit most [from green methanol] but the infrastructure and scalability is holding this fuel back," analysts at S&P Global Commodity Insights said. "This fuel has potential and S&P Global believes it could have a good proportion of the alternative fuel landscape."

The production and use of methanol results in about 165 million mt/year of carbon emissions, or about 0.3% of the world's total, according to a May report by the International Methanol Producers and Consumers Association. Green methanol is a solution to the problem, albeit a more expensive one.

Year-to-date conventional methanol spot prices averaged at $344.241/mt CFR China, $350.21/mt CFR India, $395.208/mt FOB Rotterdam and $374.233/mt FOB USG, according to S&P Global data.

Due to the higher cost of raw materials, sources said green methanol premiums have a wide range over conventional methanol prices, starting from around $400/mt.

Green methanol is defined as "methanol produced via a process that emits zero or a minimal amount of GHGs, usually measured as an equivalent amount of CO2."

Green methanol is produced from sustainable biomass, typically called biomethanol, or from carbon dioxide and hydrogen produced from renewable electricity, typically called e-methanol.

With more projects coming online that are utilizing renewable feedstocks and captured CO2, the term "renewable methanol" has also emerged and is used to refer to methanol that significantly reduces greenhouse gas intensity and contributes to the energy transition of end-user markets.

Methanol has been used for millennia, in applications from embalming to adhesives. In recent years, renewable methanol emerged as a sustainable fuel source.

Maersk, MOL, the joint venture between Proman and Stena Bulk, WFS & Marinvest are just some of the leading companies when it comes to using renewable methanol as a sustainable fuel source, specifically in bunkering. The appetite for greener fuel alternatives is growing worldwide, with companies now looking to mass produce renewable methanol.

Each company produces green methanol through different feedstocks. For example, one of the most common feedstocks for biomethanol production is municipal solid waste, or MSW. Other feedstocks include - but are not limited to - biomass from wood waste or pulp, biogas/biomethane, extraction from pulping process and black liquor.

Biomethanol is most simply described as methanol produced from biomass feedstocks that emit low levels of carbon emissions. Benefits of biomethanol production include fewer greenhouse gas and carbon emissions as well as less usage of fossil fuels. Just as there are different feedstocks involved in making biomethanol, there are also different techniques in its production.

Biomass and MSW are key solid precursors that can be used for biomethanol production using the gasification technique. Potential biomass feedstocks include forestry and agricultural residues, lignin, black liquor, wood and chips/pellets. The carbon footprint of the methanol produced from MSW depends on its composition, or the percentage share of biogenic and non-biogenic parts.

1. Production of synthesis gas, or syngas, via oxidation of a fuel at elevated temperatures (around 600-1,000 C) using air, oxygen, steam, carbon dioxide or a combination of all of these. The syngas produced mainly contains hydrogen (H2), carbon monoxide and carbon dioxide. 2. Syngas is purified and further converted to methanol via a catalytic process. 3. Produced methanol undergoes distillation to remove the water generated during the synthesis process.

Key companies that produce biomethanol via the gasification: Enerkem, HTW/ Thyssenskrup, NextChem, Bioliq/ KIT/ Air Liquide, Proman, among others.

Typical feedstocks for biogas production are manure and water treatment sludge, the organic fraction of waste from households and industry, residues of crop production such as straw, and energy crops such as maize.

1. Production of biogas via anaerobic breakdown of organic matter by microorganisms contains CH4 (50%-75%), CO2 (25%-50%) and other compounds of biogas such as H2O, O2 and traces of sulfur, H2S and NH3. 2. The biogas produced undergoes steam or dry reforming to form syngas. 3. Syngas is converted to methanol, which then undergoes distillation.

Key companies that produce biomethanol from biogas: BASF, OCI/BioMCN, among others.

Production during the pulping process

The methanol produced using this technique is referred to as "raw methanol" and contains several impurities.

1. Methanol is produced during the conversion of wood into wood pulp. This involves the reaction of wood chips with a liquor containing sodium hydroxide (NaOH) and sodium sulfide (Na2S). 2. Raw methanol can be purified into "clean methanol," which is free from nitrogen and most sulfur. The amount of methanol produced varies depending on the type of the wood used and the type of pulping process involved.

Key companies that produce biomethanol from pulp mills: Veolia, Södra, Andritz, among others.

As methanol remains the world's most shipped chemical commodity today, there is growing interest toward switching to its greener counterpart. Here are companies that have entered the biomethanol sphere on commercial and development scale.

Source: S&P Global Commodity Insights research data, Methanol Institute

To continue reading you must login or register with us.

It’s free and easy to do. Please use the button below and we will bring you back here when complete.