Methanol-to-Jet: Taking Off

Methanol as an alternative fuel continues to make headlines, and leading companies are evaluating the possibilities—not just in aviation, but marine and other sectors as well. A July 25 webinar hosted by the Commercial Aviation Alternative Fuels Initiative covered the fundamentals of the renewable methanol market today, and how things look moving forward. Speaking on that topic was Gregory Dolan, CEO of the Methanol Institute, which was established in 1989 as the American Methanol Institute and is recognized as the trade association for the global methanol industry with offices around the world.

At present, a task force team within ASTM D02.J has initiated the process of acquiring industry qualification for a methanol-to-jet (MTJ) SAF production process, adding to eight SAF pathways that have been qualified, according to CAAFI. Dolan says most methanol today is produced by steam-reforming natural gas via mature technologies, and that most plants produce around 5,000 metric tons per day. “The next large plant will be in Louisiana ... it’s just finishing construction and will be a 1.8 million-metric-ton-per-year facility, about a $1.2 to $1.3 billion investment. They have about 1,500 employees onsite finishing up the buildout of that plant.”

China produces much of its methanol through coal coal or petcoke gasification, Dolan says, but there is growing interest in renewable methanol. “For all three, you’re producing synthesis gas to build a methanol molecule—CH3OH, the simplest alcohol.”

Methanol is a building block for chemicals, Dolan explains, used in hundreds of everyday products. It is also a direct fuel used in cars, busses and trucks, as well as a biodiesel derivative, which is about 10% methanol by volume. “What we're seeing is a lot of growth in methanol-to-olefins, which is strictly a China market today,” Dolan says. “Global demand is around 80 million metric tons [per year] ...”
Dolan referenced a joint report the Methanol Institute released with the International Renewable Energy Association in 2021, which he says offered a first impressive look at renewable methanol production, which is referred to as green methanol, opposed to brown (coal-based), gray (conventional natural gas) or blue, which is made using blue hydrogen and capturing the CO2. Renewable or green methanol can be produced in two ways: biomethanol, which is produced from biomass—gasification of forestry residue or ag waste, as well as biogas from landfills, sewage or municipal solid waste—or from CO2 and hydrogen produced from renewable electricity. “Whether you’re producing any color, it’s all globally traded to the same specification—the IMPCA specification reference, which has a minimum purity of 99.85%," Dolan says.

Tracking the Buildout
The Methanol institute is tracking renewable methanol projects (biomethanol and e-methanol)—a map of which is available on its website. “Right now, we’re tracking about 90,” Dolan says. If all reached production state, that would equate to more than eight million metric tons (2.7 billion gallons) per year by 2027, he says, cautioning that these are only publicly announced projects and does not necessarily mean they have offtake agreements, financing or permitting. “But I would say it’s indicative that we’ll see a wave of renewable methanol project over the next couple of years.”

Dolan says projects are getting larger in size—to date, e-methanol and biomethanol plants have been in the range from 4,000 to 10,000 tons per year. “We’re now seeing plants with capacities of 50,000 to 250,000,” he says, adding that project development is expanding from traditional fuel producers to major utilities such as Orsted, Iberdrola and Engie, as well interest from oil and gas majors like BP, ExxonMobile, Chevron and others.

The aforementioned IRENA report—which forecasts global methanol demand to increase fivefold between now and 2050, up to approximately 500 million metric tons annually—also contains comprehensive pricing, Dolan says. “Methanol typically trades in a band from $300 to $400 per metric ton—today, we’re seeing biomethanol cost-competitive with conventional methanol from natural gas. Generally, biomethanol has traded for $600, $700 to $800 per metric ton.”

Dolan adds that right now conventional, natural gas-based methanol has seen a slight price slide, recently trading for $229 per metric ton, or 69 cents per gallon.

A potential industry game-changer is the U.S. Inflation Reduction tax credits—45Q (CO2 capture and storage), 45B (renewable electricity) and 45V tax (hydrogen production), which will provoke “significant investments for low-carbon methanol production and use," Dolan says. “The IRA will move a lot of announced projects in Europe and China to the U.S.”

Methanol for SAF is likely to echo the boom that the marine fuel sector has recently experienced. “I think methanol as a marine fuel is instructive as to what we’re going to see from methanol to jet,” Dolan says. “2022 is the year methanol went global in the marine industry.” He gives Maersk as an example, which announced the world’s first carbon neutral container vessel to launch this year, operating on dual-fuel methanol. “Another thing Maersk has done is entered into agreements with more than 10 suppliers of biomethanol, sourcing at least 730,000 tons by the end of 2025,” he says.

Methanol in the marine industry isn’t limited to container ships, however. “We’re also seeing it in chemical tankers, dry bulkers, super yachts, cruise ships, tugboats ... a whole range of vessels and a whole range of engines," Dolan says.

Dan Kadlecek, principal aviation fuel scientist at ExxonMobil, also presented during the webinar.

To view the webinar in full, visit www.caafi.org.