Methanol and Bio-economy: Now and the Future

August 24, 2017 |

By Lorenz Bauer, Ph.D., Lee Enterprises Consulting

Special to The Digest

Methanol Sources and Uses

Methanol and bioeconomies are two of the buzz words of the last decade. They had their origin in the “peak oil” scare and the predicted sky rocketing oil prices. They were further boosted by environmental concerns about pollution and climate change.   Both economies are continuing to grow; however, methanol has taken off much faster due to the strategic interests of international players like China, India, Israel, and other countries desiring to decrease oil imports. Near term economic drivers continue to dominate over longer term environmental and societal goals. This note discusses the potential synergy between bio and methanol economies in terms of technical, economic and regulatory factors. Recent advances in methanol production process and catalyst development are highlighted along with the status of biomethanol commercialization efforts. The continued growth of the methanol economies provides significant opportunities for investment in novel production methods.

The increased use of methanol as fuel and chemical feedstock is related to increased natural gas production and the desire to improve gas storage and transportability.   There are several existing technologies for converting methane from natural gas to methanol on a large scale.  Currently, 10s of billions of dollars are being spent to build methanol production facilities in US alone.   In addition, there are significant expenditures on infrastructure and downstream processes for converting methanol to chemicals and fuels.

Biomethanol is interchangeable with standard methanol and can benefit from this infrastructure. Biomethanol clearly meets the standards for an advanced biofuel and in many cases a cellulosic biofuel. However, it’s costs relative to standard methanol has limited production. The interest in reducing global continues to motivate further research into biomass conversion. The scale of these biomass conversion process provides the opportunity to apply novel approaches in lower risk applications that benefit both technologies.

Economics and Project Funding

Production of competitively priced gasoline and dimethyl ether, a diesel substitute is possible. Methanol derived from natural gas currently costs about $0.75 per gallon. Conversion of methanol to gasoline at most doubles this price. Biomethanol is more expensive. A recent techno economic study suggest a cost differential of between $1.00 to $2.50 per gallon for the biomethanol and natural gas methanol. However, some of the cost differential for the end user can be mitigated by reduced transportation costs.

Funding for mega methanol projects has been available from a variety of sources. Major chemical companies like Methanex and Celanese.  The Chinese government has been very active in the area funding several large projects.   The US Department of Energy guaranteed to $2 billion in loans for Lake Charles Methanol LLC’s proposed petroleum coke-to-methanol facility.   Development of smaller scale plants that can be located close to natural gas fields is being actively pursued by many gas producers. Conversion of CO2 to methanol provides a possible route for using wastes that is attractive to both government and industry.

Obtaining funding for biomethanol plants is more difficult.   Methanol production from natural gas suppresses the bio economy by providing a practical lower cost alternative to petroleum derived fuel.   Government incentives are focused on ethanol and biodiesel and do not support biomethanol. Extending support to give credits for renewable energy production would help jump start production.   Long term off-take agreements are difficult to come by in commodity market that anticipates a large quantity new production in the near future.

Methanol and Bio Economy Synergy

Given that methanol was originally called wood alcohol, there is clearly a potential synergy between the two economies. While it was originally produced from biomass, large scale production of methanol from natural gas is currently much more economical.   Natural gas conversion has also displaced gasification of coal and heavy hydrocarbons as the most important growth technology.

Methanol can be produced from lignocellulose renewable sources and municipal wastes. Methanol can also be produced from carbon dioxide. It is both produced in and consumed in biodiesel production.   The thermochemical conversion paths to biomethanol are basically the same as for fossil feedstocks, such as coal or natural gas.   To produce methanol, biomass is gasified, and the resulting synthesis gas, a mixture of CO, H2, and CO, is treated to meet the specifications for downstream process.

Distributed methanol production can make sense for waste to energy and agricultural applications. The development of a robust methanol economy would provide outlets for materials that could be used locally and provide materials to make shortfalls. Technology being developed for smaller scale methanol production from natural gas can be adapted to biogas.

Integration of production methanol from fossil and biomass feedstocks is possible. Biomass and fossil carbon sources like coal and pet coke can be gasified along with biomass. However, natural gas is the cleanest and currently the most economical source when available.   The availability of additional feedstock improves the performance and economics of the biomethanol production since the products can share some unit operations and distribution channels.  Estimates of savings from coproduction is about 10-20% of the cost of the biomethanol, which is significant but not game changing. It could be more important for distributed plants where a natural gas supply is available.

Advances in combustion technologies are applicable to both fossil carbon and biomass derived methanol. Bio methanol can be blended gasoline at 10-20 wt%. For example, car manufacturers in China and India are already produceing autos with engines compatible with methanol. In China, M10 and M85 are already used in thousands of vehicles.

Methanol fuel cells have advantages over hydrogen fuel cells in feed handling and can operate at lower temperatures than solid oxide fuel cells. Continued development is expected in this area. These fuel cells are likely to be suited to smaller scale applications. The increased efficiency of the power production may offset some of the higher methanol production costs.

There is support among the regulatory community in the EU, Canada, and U.S. for biomethanol production greenhouse gas reduction.   The Environmental Protection Agency approval for the fuel’s inclusion under the Renewable Fuel Standard. The EU recognized biomethanol as an advanced biofuel and supporting its use.   Methanol is becoming a fuel of choice in the maritime industry faced with strict low sulfur emissions. The addition of biomethanol would aid the industry in meeting carbon reduction standards.

Advanced Synthesis Methods

The interest in methanol production is driving research into novel process technology. The scale of production in the natural gas industry makes introductions of these advances risky.  These technologies may be better deployed in smaller scale more appropriate for biomass conversion. Conversion of methane to methanol is exothermic and requires high pressures and low temperatures. Methane is not very reactive, and temperatures above 400oC are required to initiate the reaction.   Methanol is an intermediate product and it is difficult to prevent over oxidation.   The efficiency is only about 50-65% depending on the waste heat recovery, and a significant amount of carbon is lost as CO2.

Conversion of methane to methanol at slightly lower temperatures is possible using strong oxidants such as N2O, hydrogen peroxide, and ozone. However, these oxidants can not be produced at low enough cost to justify their use. Methods for generating lower cost oxidants is a major area of research.

Syngas pretreatment is major cost of biomethanol production. Natural gas is also treated prior to methanol synthesis.   New methods for purification would be applicable to both technologies and support product integration.  Recent advances in membrane technologies combining nanomaterials and polymers have significant potential.    Development of more robust catalyst systems and reactor designs that combine purification and conversion are also being explored.

There is a significant effort to develop improved conversion processes that could also be used in both biomass and fossil feedstock conversion.   Direct oxidation and liquid oxidation of methane and conversion via mono halogenated methane has been demonstrated by several groups. Particularly interesting is the idea of chemical oxidation via “looping” oxygen carrying catalysts. In this approach, selectivity is improved by using regenerable oxygen carrier to control over conversion to CO2.   Several groups have recently announced new chemical looping reactions using metal modified commercial zeolite that uses water as an oxygen source.

Smaller distributed production facilities could provide the opportunities for commercial evaluation of these innovative technologies.

Improvements in gasification technology are also applications across both technologies. The conventional gasification such as fixed bed (updraft and downdraft), fluidized bed, and entrained flow reactors have demonstrated commercial biomass to power applications that can be adapted to produce biomethanol. However, high investment costs, low gas quality and poor efficiencies has limited their application to liquid fuel production. A wider variety of new gasification technologies are being developed including plasma gasification and supercritical water. Improved process integration and intensification is also being explored. While these approaches are technically feasible they are not yet economically attractive for biomass to methanol conversion.

Methanol production at low temperature has been demonstrated via several different electrochemical methods. Recently GTI has patented an electrochemical cell that uses water and CO2 as feeds to produce methane and methanol.   This approach could be coupled with solar energy. It may be possible in the future to use biosyngas as feed, to achieve materials that has an extremely low carbon footprint.   While a long way from commercialization, this approach would be promising at small scales.

Production methane via a biosynthetic route is also being investigated by several groups.   There are examples of the synthesis of methanol by methanotrophic microbes. However, there are only a limited number of organisms known. Inhibition on cell growth by H2S and NH3 and gas liquid mass transfer limitations would need to be addressed before the microbe mediated synthesis would be a viable route.

Commercial Renewable Methanol Projects

Industrial scale production of renewable methanol is already underway at several sites around the world. These projects have only recently been fully operational and have not led to many follow-up projects. However, if they perform well, they should give rise to new projects. However these projects depend on continued price supports in place for the renewable methanol. Recent changes in EU regulations and Canadian government purchasing plans have complicated the economics of the plants that depend on these subsidies for their profitability. In the U.S. the focus has been on ethanol and vegetable oil derived fuels and the political will for ending subsidies is not strong.

In the Netherlands, BioMCN is converting biogas into advanced second generation bio-methanol.  The process uses glycerin as a feedstock and is linked to FAME biodiesel production. However, they are continuing to develop innovative processes to produce biomethanol using various feedstock, including crude glycerin, green gas, biomass, and CO2.

In Canada, bio-methanol is being produced from municipal solid waste feedstocks by Enerkem. Last year the plant became the first ISCC certified plant (International Sustainability and Carbon Certification). Recent 2017 press releases report that investors have confirmed that the plant is meeting productivity targets. This may spark interest in similar technologies in areas where landfills availability is a concern including the EU and California.

In Iceland, Carbon Recycling International is capturing and reacting CO2 from geothermal power generation with renewable hydrogen produced via electrolysis into renewable methanol. This relies on a natural source rich in CO2   However, the plant demonstrates the viability of producing methanol from concentrated CO2 that may be collected by newly developed carbon capture technology.

Future Commercial Development

In California, Oberon Fuels, a California company is manufacturing DME from biomass derived methanol. Presumably this is aimed at helping diesel blenders meet the renewable fuel standards.   They appear to be positioning their technology for waste to energy conversion. In early 2017 they demonstrated the use of their product in garbage trucks in New York City.

Maverick Synfuels is offering a modular system for syngas-to-methanol to olefin that is appropriate for distributed biomass processing.   They have demonstrated the technology at the 100 gallon per day scale.   They have completed front end engineering and design for a commercial project and are seeking off-take arrangements and funding. The technology seems very appropriated for use in natural gas fields and can be adapted to operate on biogas. However, as of yet there have been no commercial units built.

VärmlandsMethanol was planning to build a biomass-to-methanol plant in Hagfors, Sweden. They will gasify biomass (forest residue), and then convert and purify the syngas into fuel grade methanol. This plant would be a model for the pulp and paper industry if it is completed. There have be no reports of the project moving forward this year.

Chemrec has be working since the late 1990s on developing a process to gasify black liquor, a coproduct of pulp and paper production.   Several demonstration and pilot plants were built, but they have not led to further development.


The future for methanol production is bright. The methanol economy is becoming a reality in many parts of the world, driven by economics and strategic concerns.   The growth of the demand is fueling investment in both new plants and research.   Novel technologies maybe applicable to many feedstocks including renewables. Monitoring these novel technologies can provide significant opportunities for the future investment particularly in smaller scale distributed plants.

Biomethanol has the potential to be a drop-in addition to the major sources of methanol in the same way that ethanol has become a significant fuel and chemical feedstock. Bio methanol has some advantages in that the scale of infrastructure and processing capabilities being developed for other methanol sources be can be immediately adapted to use the renewable materials. This avoids the issues that have faced biofuels integration into refineries and fuel blending facilities.     Another significant benefit has been in motivating a new generation of researchers and entrepreneurs. Bioethanol research is more attractive to younger and socially motivated researchers willing to take risks on novel technologies. Yet, in the short run, biomethanol suffers from the same problems as many renewables in that it is more expensive than other sources of methanol and fuels. Finding funding for further development is difficult. A firm commitment to addressing the societal costs of using fossil carbon sources is needed to drive further development on biomass derived fuels and chemicals.

About the Author

Lorenz Bauer, Ph.D., is a chemist with over 30 years of experience in catalysis, oil refining, chemical production and biomass conversion.   He is an independent consultant affiliated with Lee Enterprises Consulting. The opinions expressed herein are those of the author, and do not necessarily express the views of Lee Enterprises Consulting. His specialty is developing emerging technologies. He is an inventor of 25 patents and author of over 20 publications. He is Six-sigma black belt trained in project management and analytics. His projects have ranged from food additives, off gas treatment, upgrading unconventional feeds and waste recycling.   Most recently he worked on fast pyrolysis of biomass and upgrading products to fuels and chemicals.

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Category: Thought Leadership

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