Green Methanol and Shift to Net Zero

China, the United States and India are amongst the largest greenhouse gas emitters and their efforts to mitigate climate change come under great scrutiny. India, for instance, plans to become carbon neutral by 2070 and projects carbon emission reduction by one billion tonnes by 2030. China has somewhat similar goals. However, newer technologies are required to wean away these countries from their dependence on coal and tackle the pollution pervading towns and cities.

While solar and other renewable technologies are expanding, the pace is not fast enough to tackle the crisis. These technologies have two problems: intermittency and many places not being connected to the grid. Hydrogen is seen as a possible substitute energy source. However, hydrogen tends to leak and can be a fire hazard. Many scientists believe the solution lies may like in “green methanol.” Green or renewable methanol is an ultra-low carbon chemical produced from sustainable biomass or carbon dioxide and hydrogen produced from renewable electricity.

Methanol is a highly versatile product that finds itself in many ubiquitous household products, essential components for cars, and the production of other valuable chemicals.

Green methanol can be used as an energy carrier for storing electricity generated from renewable sources or as a transportation fuel. Besides LNG and ammonia, green methanol is also considered a substitute fuel for maritime fuel applications. Additionally, it can be added to conventional liquid fuels or used to fuel 100% methanol-based drive systems.

Currently, methanol is the largest produced organic chemical, with an annual production of about 100 million tons. It is believed that with green methanol the market could triple.

The shift to net-zero requires the development of many such fossil fuel substitutes.

Published by Utkarsh Majmudar

Utkarsh Majmudar is a Fellow, IIM Ahmedabad and a professional with experience encompassing academics and administration at top business schools in India (IIM Lucknow, IIM Udaipur, and IIM Bangalore) and working with large corporations. His interest areas include corporate finance and CSR.

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