Green Methanol Market Size & Trends

The Green Methanol Market size was valued at USD 2.07 billion in 2024 and is expected to reach USD 19.08 billion by 2032, growing at a CAGR of 31.99% over the forecast period of 2025-2032.

Green Methanol market analysis highlights the increasing demand for cleaner, low-emission fuels in the maritime sector. With global shipping now representing almost 3% of all greenhouse gas emissions, the industry is under increased pressure to deliver on its decarbonization ambitions. With the coming of stricter departures from administering experts, for instance, the International Maritime Organization (IMO), shipping organizations are starting to search for sustainable fuel options. The answer is green methanol, which has a much lower carbon footprint and that the current marine engines can run on readily, made by multiple renewable feedstocks, such as biomass, green hydrogen, or captured CO₂. Companies such as Maersk are already acquiring methanol-fueled ships and developing bunkering infrastructure, demonstrating swift industry movement in favor of this cleaner fuel, which drive the green methanol market growth.

The U.S.in 2022, the U.S. transportation sector emitted 28.4% of the nation's greenhouse gas emissions, approximately USD 1.8 billion metric tons CO₂e - 488 million metric tons CO₂e for passenger freight air transport and roughly 180 million metric tons CO₂e for domestic waterborne transport emissions.

Green Methanol Market Dynamics

Drivers:

• Maritime Decarbonization & Regulatory Pressure Drives the Market Growth

Emissions reduction rules set by the International Maritime Organization (IMO) and European Union regional authorities are becoming stricter. Such policies are making alternative fuels, such as green methanol increasingly attractive, having up to 90% lower CO₂ emissions than conventional marine fuels. This makes it a more viable fuel for the shipping sector, since it can be seamlessly used in dual-fuel engines with minimal modifications. Leading shipping companies including Maersk have already invested billions in methanol-ready vessels, with over 25 methanol-driven vessels ordered. Moreover, global availability of bunkering and other fuel supply infrastructure is in the process of scaling up. As a result, this regulatory push is taking green methanol from a niche fuel to a more prominent and mainstream fuel in the maritime market.

In 2025, Orsted received USD 100 million in the U.S. federal funding to build an e-methanol production plant on the Texas coast, intended to support decarbonized marine fuel demand.

Restraints:

• High Production Costs & Infrastructure Limitations May Hamper the Market Growth

The production of green methanol requires expensive processes including electrolysis (for green hydrogen) and carbon capture, making it much more expensive compared to fossil methanol. Green methanol is 2–3 times the cost of grey methanol, as per industry estimates, and hence deserves subsidization an On-site large-scale green methanol adoption is unlikely. Additionally, global infrastructure storage tanks, pipelines, and bunkering terminals are not yet fully optimized to handle and distribute methanol safely at scale. This is further complicated by its corrosiveness and reduced energy density, which adversely impact logistics.

Analysis from the 2023 International Council on Clean Transportation (ICCT) found that while conventional methanol offered over 100 million tons, global renewable methanol capacity lay below 0.2 million tons/year, illustrating a considerable disparity.

Opportunities:                                        

• Government Incentives & Private Investment Create an Opportunity in the Market

Green methanol is getting a lot of support from governments, with both policy as well as financial effort, as well as co-operation between the public and private sectors. With initiatives, such as the U.S. Inflation Reduction Act (IRA) and the EU’s Green Deal, there are billions of dollars that more into renewable fuels infrastructure. Tax credits and carbon pricing schemes are closing the cost delta with fossil fuels. In addition, private sector actors are being very aggressive; they are forming joint ventures, signing fuel-supply fungibility agreements, expanding production, and entering the space. Green methanol is seen as a strategic solution to the energy transition by venture capital and corporate investors alike, which drives the green methanol market trends.

For Instance, European Energy recently received €167 million in public and private funding (including €50 million from the EU Innovation Fund) to launch a large-scale e-methanol facility in Kassø, Denmark, with a capacity of 42,000 tons/year, selling methanol to Maersk.

Green Methanol Market Segmentation Analysis

By Feedstock

Biomass held the largest Green Methanol market share, around 56%, in 2024. The reason for such dominance relies on the high availability of organic waste materials (agricultural residues, forestry by-products, and municipal solid waste), which can be turned into syngas and then directly into methanol using mature thermochemical processes. Compared to green hydrogen and CO₂ capture, biomass-based methanol production is relatively mature, more scalable, and less expensive, and therefore is the technology of choice for many early-stage and commercial facilities. In addition, methanol from biomass provides substantial carbon reduction advantages as it utilizes renewable carbon sources and promotes circular economy initiatives.

Green Hydrogen held a significant Green Methanol market share owing to the expanding functions of green hydrogen as a fundamental component to facilitate carbon-neutral production of fuels. Green hydrogen is an input for e-methanol synthesis (by capturing CO₂) that is produced through electrolysis with renewable electricity (wind or solar). While still relatively costly versus biomass-based techniques, methanol based on green hydrogen is starting to take off in recognition of its ultra-low emissions profile and coherence with global net-zero objectives. There is considerable growth in funding for large-scale electrolyzer projects and carbon capture facilities from both governments and private investors that will allow increased e-methanol production to occur.  

By Derivative

The biodiesel segment held the largest market share, around 22%, in 2024. The dominant position is due to green methanol being a vital feedstock for the transesterification process involving biodiesel. With the biodiesel sector striving to improve the sustainability and carbon neutrality of their fuels, green methanol is becoming an attractive choice among biodiesel producers as global demand for cleaner fuels rises. When disclosed, its renewable sourcing, usually via biomass or renewable hydrogen and CO₂, minimizes lifecycle greenhouse gas when measured against fossil-derived methanol. Supportive government policies, along with blending mandates available, for instance, in the European Union, the U.S., and parts of Asia, created additional incentives for integrating green methanol into biodiesel production.

Solvents have a significant share in the Green Methanol market due to the use of methanol as a common and versatile solvent in a variety of industrial applications. Green methanol is being increasingly adopted as a sustainable substitute for petroleum-based methanol in paints, coatings, adhesives, pharmaceuticals, and the chemical processing industries, and is produced mainly from renewable feedstocks, such as biomass or synthesized with green hydrogen and captured CO₂. Manufacturers are responding to increased regulatory pressures to reduce both volatile organic compounds (VOCs) and carbon emissions by moving to environmentally sustainable solvent alternatives, with green methanol satisfying performance and sustainability metrics.

By Application

Chemical Feedstock held the largest market share, around 64%, in 2024. It is due to that it is an important chemical feedstock as it is the intermediate for chemicals such as formaldehyde, acetic acid, olefins, and various downstream derivatives like plastics, adhesives, foams, and resins. High demand for green methanol as a replacement for fossil-based methanol is expected as industries further shift to low-carbon and sustainable raw materials. As it is compatible with current chemical processes, it integrates smoothly and would not require major infrastructure modifications, making it appealing for manufacturers aiming to decarbonize their processes. Additionally, global government policies toward lowering industrial emissions, along with green chemistry promotion, are encouraging companies in Europe, North America, and Asia to use renewable methanol for feedstock applications.

Fuel held a significant market share in the green methanol market owing to the increasing low-carbon and sustainable energy in transportation and power generation plants. Green methanol, derived from renewable resources including biomass or from green hydrogen with captured CO₂, represents an increasingly popular clean-burning fuel as its use can dramatically lower CO₂ and particulate emissions when compared to fossil-derived fuels. In the marine space, it is especially gaining popularity because alternative marine fuels can provide an answer to new emission regulations from organizations such as the International Maritime Organization (IMO).

Green Methanol Market Regional Outlook

North America Green Methanol market held the largest market share, around 41.43%, in 2024 due to an established infrastructure for clean energy, high investments in renewable fuels, and strong regulations encouraging their use. The abundance of feedstock availability in the region, biomass and renewable electricity and captured CO₂, enhanced by federal incentives, including tax credits under the U.S. Inflation Reduction Act (IRA), offers an excellent opportunity to decarbonize many existing industrial processes. As part of their decarbonization strategies, North American chemical producers and fuel suppliers are increasingly pivoting to low-carbon methanol. Meanwhile, shipowners switching to green fuels are creating demand at ports such as Houston and Vancouver. There is strong land for R&D here, and developed carbon capture and electrolyzer technologies as well.

In 2024, Ørsted landed USD 100 million from the U.S. federal government for a commercial-scale e-methanol facility in Texas with a target output of 300,000 tons/year for shipping fuel, reducing marine emissions by upwards of 90 percent.

The U.S. Green Methanol market size was USD 650 million in 2024 and is expected to reach USD 5989 million by 2032 and grow at a CAGR of 32.01% over the forecast period of 2025-2032. Rapidly expanding clean fuel legislation (IRA and DOE grants), spurring private sector investment, and demand from marine transport, chemicals, and energy storage industries continue to push the nation's pathway to clean fuel reform. Additionally, an advanced port and logistics network in the U.S. will be a key enabler for the development of green methanol bunkering hubs. In addition, initiatives for local green hydrogen (H₂) generation and CO₂ capture are emerging quickly to feed methanol production.

Asia Pacific Green Methanol market held a significant market share and is the fastest-growing segment during the forecast period owing to industrial growth, clean fuel directives, and transportation and energy demand in a developing region. China leads regional momentum with high-volume methanol vehicle fleets and sophisticated green fuel planning. Countries, such as Japan and India are also looking into waste-to-methanol and carbon dioxide conversion machinery. This change is being supported by regional governments through biofuel blending mandates, hydrogen policies, and carbon reduction goals. Municipal waste and biomass feedstock are abundant feedstocks to produce scalable green methanol.

Enerkem (Canada) has new partners in Japan and Singapore to support a new 125,000 t/year plant transformation of municipal waste and green hydrogen into bio-methanol, planned to go online in 2025.

Europe held a significant market share in the forecast period due to its early uptake of clean technology, stringent emissions limits, and the EU's green course to achieve climate neutrality by 2050. There are power-to-X methanol projects underway in Denmark, Germany, and the Netherlands utilizing renewable hydrogen and captured CO₂. Consistent investments in bunkering infrastructure at big ports, corresponding to Rotterdam and Antwerp, underscore the region's commitment to green marine fuels. In the EU, green methanol is also being supported for use in industrial applications such as sustainable chemicals and plastics manufacturing.

In May 2025, European Energy and Mitsui opened the world´s first commercial e-methanol plant in Kassø, Denmark. The €150 million facility produces 42,000 t/year of the fuel, serving Maersk's Methanol-fuelled fleet and local chemical producers.

Key Players in the Green Methanol Market

The major Green Methanol companies are Methanex Corporation, OCI N.V., Carbon Recycling International, Enerkem Inc., BioMCN, BASF SE, Nordic Green, Haldor Topsoe, Proman, and Vertimass.

Recent Developments in the Green Methanol Market

• In May 2025, Methanex Corporation acquired OCI Global's international methanol business for USD 2.05 billion, with two mega-scale facilities in Beaumont, Texas, material de-bottlenecking to global methanol capacity and streamlining green methanol integration.

• In January 2024, Envision Energy & ASF SE established a strategic tech partnership for the development of advanced process design for the conversion of green hydrogen and captured₂ carbon to e‑methanol as an important milestone to commercialization at scale.