Microbial food production has the potential to produce protein on a land area that is much smaller than that of plant based production. A critical factor of the environmental impact of microbial food production is the feedstock used for microbial growth. Methanol is a promising feedstock, because it can be produced with renewable electricity and air capture of CO2. However, In practice, the methanol you can buy on the open market is currently produced almost exclusively from coal or fossil gas. Here I will present to you a big picture look at the current state of methanol supply and demand as well as the future outlook to find out whether we can expect methanol production to become renewable.
State of Methanol Demand
The Methanol Institute estimated that demand for methanol increased from 89 million tonnes in 2017 to 107 million tonnes in 2021 and is estimated to reach 120 million tonnes in 2025. The “Innovation Outlook : Renewable Methanol” of the International Renewable Energy Agency (IRENA) (jointly with the Methanol Institute) estimates methanol demand can reach 500 million tonnes in 2050.
This growth in demand is primarily fueled by the chemical industry (e.g. formaldehyde). Since microbial food production from methanol is just leaving the laboratory with very little current demand, it is not yet included as a reason for the projected increase.
Most methanol is made from fossil gas (65%) or coal (35%) with a tiny fraction (<1%) made from renewable sources. There are two types of renewable methanol that are chemically identical but refer to different production methods: bio-methanol and e-methanol. The exact carbon and land-use footprint of both can vary depending on the feedstock they use but most of the time it is better than. For example, biomass is generally considered a renewable feedstock for bio-methanol but if it results in land use changes it can have a sizable environmental impact and carbon emissions (as seen for instance when old forests are destroyed for plantations). Municipal solid waste (MSW) is another bio-methanol feedstock and it can contain plastic, food, paper or anything else humans throw away. It is unlikely to be entirely renewable. For example, when it includes plastic that was made from fossil fuels, the carbon that used to be in underground fossil fuels ends up in the atmosphere. For e-methanol both the carbon feedstock and the electricity mix are important. E-methanol always starts with hydrogen generation from water and electricity. After that hydrogen is combined with CO2 to create methanol. The CO2 source is critical. If the carbon comes from fossil fuels it is not renewable. Only direct air capture of CO2 using renewable power offers a production method that is both low-carbon and renewable. Unfortunately, this way of producing methanol is also the most expensive one right now.
To summarize, methanol demand is expected to rise and currently renewable methanol production is extremely small relative to overall production. Now, let’s find out if it is expected to stay this way.
Renewable Methanol Production and Pricing Outlook
Of the 500 million tonnes of methanol IRENA expects will be produced in 2050, 250 million tonnes are e-methanol, 135 are bio-methanol and the remaining 115 are fossil-methanol. These numbers appear in the “Innovation Outlook: Renewable Methanol”. They seem to be based on assumptions about renewable energy deployment and partially also on qualitative expectations regarding electrolyzer developments and cost. However, overall this long-term outlook should be taken with a grain of salt. Since renewable methanol production is currently very small, growth is hard to project. On the other hand, renewable energy generation is crucial for renewable e-methanol and renewable energy has globally seen consistent growth and is already a large part of the electricity mix. This positive trend means that a positive e-methanol outlook could be justified.
A more near-term estimate from the Methanol Institute based on existing and planned projects that they are tracking, predicts about 8 million tonnes of renewable methanol production in 2027. An impressive growth from less than 0.2 million tonnes in 2021.
Another interesting metric is the current and future price. The innovation outlook has fossil fuel methanol between 100-250 US dollar per tonne. Bio-methanol is at 320 to 770 USD/t, e-methanol with biological carbon source at 800-1600 USD/t and e-methanol with carbon from direct air capture 1200-2400 USD/t. When it comes to the price e-methanol is expected to decrease strongly by 2050. Both hydrogen electrolysis and direct air capture cost depend strongly on the price of renewable electricity, which has gone down dramatically over the last decade and is expected to decrease further. IRENA therefore expects e-methanol to go to 290-630 USD/t (direct air capture only) without a carbon credit by 2050. Bio-methanol is projected to be 227-553 USD/t by 2050.
In summary, the long term outlook is promising. Renewable electricity cost will be critical for e-methanol. It will be important to see if the near-term growth prospect proceeds as expected. It is concerning though that the outlook sees no reduction (an increase even) in non-renewable methanol production until 2050. 115 million tons of non-renewable methanol in 2050 is not net-zero compatible. It would require large negative carbon emissions (carbon capture and storage). Putting the price for those negative emissions on the non-renewable methanol price would likely make it too expensive to compete with renewable methanol. Overall, the falling cost of renewable electricity is putting sustainable methanol production within reach.
 IRENA AND METHANOL INSTITUTE (2021), Innovation Outlook : Renewable Methanol, International Renewable Energy Agency, Abu Dhabi.
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