Green methanol is a low-carbon form of methanol produced from renewable or sustainable sources, instead of fossil fuels such as coal or natural gas. Methanol is a liquid chemical and fuel used in:
- shipping fuel
- chemicals
- plastics
- paints
- solvents
- formaldehyde
- fuel blending
- hydrogen carrier applications
Conventional methanol is usually fossil-based and carbon-intensive. Green methanol is promoted as a cleaner alternative for hard-to-abate sectors such as shipping and chemicals.
Production Pathways
Green methanol can be produced mainly through two routes.
- Bio-methanol: made from sustainable biomass, agricultural residues, municipal solid waste, biogas, black liquor or other organic waste streams.
- E-methanol: made by combining green hydrogen with captured carbon dioxide. Green hydrogen is produced through electrolysis using renewable electricity.
IRENA notes that methanol is largely produced from fossil fuels today, but it can also be made from sustainable biomass or from carbon dioxide and renewable hydrogen.
Why It Matters
Green methanol is important because it can reduce emissions in sectors where direct electrification is difficult.
Its importance lies in:
- decarbonising shipping
- reducing fossil-methanol dependence
- using captured carbon dioxide productively
- creating demand for green hydrogen
- supporting clean chemical industries
- reducing air pollution from marine fuels
- helping ports transition towards green bunkering
Unlike hydrogen, methanol is liquid at normal temperature and pressure, making it easier to store, transport and use in modified engines.
Use in Shipping
Shipping is one of the biggest emerging uses of green methanol. Large ships cannot be easily electrified because of long-distance fuel requirements. Methanol can be used in dual-fuel marine engines and handled more easily than some other alternative fuels.
Shipping companies have started ordering methanol-capable vessels. Maersk reported that 10 dual-fuel methanol vessels joined its fleet in 2025, with six more dual-fuel vessels expected in 2026.
This shows that green methanol is moving from concept to early commercial deployment, though supply remains limited.
Latest Global Development
In May 2025, the world’s first commercial-scale e-methanol plant opened in Kassø, Denmark. The plant is expected to produce 42,000 metric tonnes of e-methanol annually using renewable energy and captured CO₂. Maersk is one of the key customers for the fuel.
This is significant because green methanol production is still at an early stage globally, and commercial-scale projects are needed to bring down costs.
India Context
India is beginning to build its green methanol ecosystem as part of its larger green hydrogen, green ports and clean shipping strategy.
Important recent developments include:
- India has announced its first green methanol production plant using Prosopis juliflora, an invasive plant, as feedstock. The project is linked with clean marine fuel and ecological restoration of affected landscapes.
- A green methanol bunkering facility of 750 cubic metres capacity has been planned at V.O. Chidambaranar Port, Tuticorin, with a project cost of around ₹35.34 crore, supporting a green shipping corridor between Kandla and Tuticorin.
- ACME Group has tied up with IPICOL to set up a 200 KTPA green methanol facility in Kendrapada district, Odisha, expected to create over 1,100 jobs.
These developments show that India is treating green methanol as a future fuel for ports, shipping and clean industrial production.
Link with Green Hydrogen
Green methanol is closely linked with green hydrogen because e-methanol requires hydrogen produced from renewable electricity.
The process is broadly:
- renewable electricity produces green hydrogen through electrolysis
- carbon dioxide is captured from biogenic, industrial or direct-air sources
- green hydrogen and CO₂ are combined to produce methanol
This makes green methanol a green hydrogen derivative, similar to green ammonia.
Benefits
- It can reduce lifecycle emissions if produced from renewable sources.
- It is easier to store and transport than hydrogen.
- It can be used in shipping, chemicals and some fuel applications.
- It creates demand for green hydrogen and carbon capture.
- It can support circular economy if produced from waste biomass or captured CO₂.
- It can help India reduce dependence on imported fossil methanol and marine fuels.
Concerns
- Green methanol is currently costlier than fossil methanol.
- Supply is still very limited globally.
- E-methanol requires cheap renewable electricity and large green hydrogen capacity.
- Sustainable CO₂ sourcing is a challenge.
- Biomass-based methanol must avoid food-security and land-use conflicts.
- Marine engines, bunkering infrastructure and safety standards need scaling.
- Lifecycle emissions must be carefully measured; otherwise “green” claims can become misleading.
Difference from Conventional Methanol
- Conventional methanol: usually made from coal or natural gas; high carbon footprint.
- Green methanol: made from renewable hydrogen, captured CO₂ or sustainable biomass; lower lifecycle emissions.
The end product may be chemically similar, but the climate impact depends on how it is produced.
Significance for India
Green methanol is relevant for India because it supports:
- clean shipping
- green port development
- National Green Hydrogen Mission
- reduction of fossil-fuel imports
- circular use of biomass and waste
- domestic clean-fuel manufacturing
- decarbonisation of chemicals and maritime sectors
- future export opportunities in green fuels
It is especially important for ports such as Kandla, Tuticorin, Paradip and other maritime hubs where green bunkering infrastructure can become a competitive advantage.
Way Forward
India should focus on pilot projects first and scale gradually after proving cost, feedstock availability and lifecycle-emission benefits.
Priority areas include:
- clear standards for what qualifies as green methanol
- reliable certification and carbon accounting
- green methanol bunkering at major ports
- support for dual-fuel vessels
- use of waste biomass and invasive species where sustainable
- integration with green hydrogen hubs
- long-term offtake agreements for shipping and chemicals
- safety standards for storage, handling and marine use
Conclusion
Green methanol is a low-carbon fuel and chemical feedstock that can support decarbonisation of shipping and industry. It is produced either from sustainable biomass or from green hydrogen and captured carbon dioxide.
For India, green methanol is important because it connects green hydrogen, clean shipping, port-led development and import reduction. Its success will depend on cost reduction, credible green certification, sustainable feedstock, port infrastructure and demand from shipping and chemical industries.
