Green methanol

What is green methanol?

To date, the vast majority of methanol has been produced from natural gas, directly linking its production to greenhouse gas emissions. Green methanol aims to transform this compound into a promising alternative to fossil fuels, helping reduce the carbon footprint of high-emitting industries such as shipping.

Grey, blue and green methanol

Like other compounds or materials, methanol is nowadays classified according to the degree of sustainability of its production process, making it a more or less environmentally friendly raw material, and therefore more or less useful for contributing to decarbonisation. Thus, we must clearly distinguish green methanol from blue or grey methanol.

• Grey methanol. It is obtained by synthesis reaction from methane present in natural gas (or in some cases, as in China, still from coal). It is therefore not a renewable or clean energy.

• Blue methanol. It is also obtained by synthesis derived from natural gas, but includes as part of the process the capture and storage of the carbon generated during its production, converting it into a less polluting product.

• Green methanol. It is produced using only renewable energy sources in the process and ensuring that no harmful gases are emitted into the atmosphere. Green methanol is thus synonymous with clean, renewable methanol. 

  • Biomethanol: produced from the gasification₍₁₎ of sustainable biomass sources such as livestock, agricultural and forestry residues and municipal waste.

  • e-methanol: produced from hydrogen produced from renewable electricity (what we call green hydrogen) and captured carbon dioxide.

(1) Combustion at a temperature between 700 and 1,500 ºC.

From green hydrogen to e-methanol

Green hydrogen is present on the roadmap of any of the economic and political actors responsible for tackling the current energy crisis and facilitating compliance with the zero emissions targets set for 2050. At Iberdrola, we have been anticipating and committing to the development of this energy as a key element of decarbonisation for years. 

Now, the interest in green methanol production opens up a new growth opportunity for the green hydrogen sector for e-methanol generation. 

Green hydrogen is generated through a chemical process known as electrolysis, which uses electric current to separate hydrogen from the oxygen in water. When this electricity is obtained from renewable sources, such as a wind or photovoltaic farm, we will produce energy without emitting carbon dioxide into the atmosphere. If the hydrogen from these renewable sources is synthesised together with the captured carbon dioxide - in a biomass power plant after the pyrolysis process₍₂₎ - renewable methanol or e-methanol can be distilled.

(2) Biomass decomposition in an oxygen-free environment with a temperature of approximately 500°C.

  SEE INFOGRAPHIC: How green methanol is produced from green hydrogen [PDF]

Uses of green methanol

The expansion of green methanol as an alternative fuel to fossil fuels is particularly attractive to the maritime industry because, being liquid at room temperature, it is much less costly to store and transport than gaseous fuels, and has the lowest carbon footprint of all liquid fuels. It can also be used in both internal propulsion engines and to power fuel cells, providing flexibility depending on individual needs. 

Green methanol can also be blended with conventional petrol and diesel, making it easier to transition vehicles that already run on these fuels while minimising changes to existing infrastructure. This allows industries and countries to reduce their carbon footprints without disrupting operations through lengthy construction work. The shift is already under way, with major multinational companies making commitments to produce green hydrogen for e-methanol production to decarbonise their activities.

Differences between fossil fuels and green methanol

Green methanol is emerging as an alternative for decarbonising fuels. Although captured carbon dioxide is used in its production, it releases the CO₂ captured during production, helping reduce its environmental footprint compared with fossil fuels.

However, e-methanol can cost up to three times as much to produce as fossil fuels. Factors behind this price difference include the cost of renewable electricity and the current efficiency of water electrolysers. Nevertheless, as production plants are developed and technology advances, green methanol will be able to make use of its renewable feedstocks, unlike fossil fuels, which rely on finite resources.

Recommendations for promoting green methanol

The International Renewable Energy Agency (IRENA) has outlined a series of recommendations to promote green methanol production and help achieve net-zero greenhouse gas emissions:

• Ensure systematic investment across the entire value chain, including technological development, infrastructure and deployment.
• Translate political commitments to reducing carbon emissions into regulatory measures.
• Ensure a level playing field for renewable methanol through public policies, including electrification and sector coupling measures that integrate renewable energy supply with fuel demand across the economy.
• Promote international cooperation on trade strategies to create jobs and foster new competitive e-methanol industries in both producing and consuming regions.

Complementarity between green methanol and green ammonia

Both green methanol and green ammonia are emerging as alternatives to the fossil fuels we use today. However, they differ in ways that make green methanol a pragmatic starting point for the transition to green fuels. For example, as a marine fuel, it is highly compatible with existing vessel storage, transport and propulsion systems. This means fewer infrastructure modifications are required than for ammonia or green hydrogen. Adaptation costs are lower, the technology is more mature and large-scale applications can be developed more quickly. 

Green methanol can serve as a transitional fuel before green ammonia becomes widely adopted. It can help drive the initial changes in policy and markets needed to move towards zero-emission energy sources. In the future, ammonia could also play a key role as a fuel for power generation in heavy industry and other sectors that are difficult to electrify.