Material Insights · Understanding the Material World

Methanol: Production route

Same final step, very different carbon by feedstock

What this tab covers How it is made: the main production routes or, for product families, the main product types and technologies, compared on share of supply, inputs per tonne, plant scale, yield, co-products and unit cost.

All large-scale methanol is made by the same synthesis step; the routes differ in how the synthesis gas is made. Gas reforming dominates outside China and is cheapest where gas is stranded or abundant. Coal gasification dominates China, where it secures supply from domestic coal at the cost of much higher emissions and water use. Low-carbon routes swap the carbon source for biomass, waste or captured CO2 with electrolytic hydrogen. These are tiny today but are the basis of shipping-fuel contracts signed since 2021.

Routes compared

RouteShare of supplyInputs per tonneTypical scaleYieldCo-productsUnit cost
Natural gas steam or autothermal reformingmost capacity outside China; North America 12.9 Mt of 13.1 Mt capacity is gas-based (Argus)about 29-32 GJ of natural gas (feed plus fuel) per t (indicative)1.0-1.8 Mt a year per plant (Fairway 1.7 Mt, Natgasoline 1.65 Mt, Argus)energy efficiency about 65-70% LHV (indicative)steam; small purge gasgas cost about $100/t at $3.44/MMBtu Henry Hub (2025, USGS) and about $480/t at Europe's 2026 average of $16.9/MMBtu (World Bank), basis about 28.5 MMBtu/t (indicative)
Coal gasification (China)most of China's output; China is 51% of world capacity ex CTO (Argus, 2024)about 1.4-1.7 t coal per t, plus large water use (indicative)0.6-1.8 Mt a year per unit; many integrated with 0.6 Mt olefin plants (indicative)energy efficiency about 45-55% (indicative)CO2 (high purity, capture-ready), sulphur, slagabout $150-250/t (IRENA 2021, indicative)
Bio-methanol (biomass, waste, biogas)under 1%; Argus expects about 2.6 Mt available by 2030about 1.5-2 t dry biomass per t (indicative)50-500 kt a yearlower than fossil plants (indicative)biochar, slagabout $320-1,000/t (IRENA 2021, indicative)
E-methanol (CO2 + electrolytic hydrogen)tiny; 18.9 Mt of low-carbon methanol capacity expected by 2030 in Argus's base case, 46% of it blue1.375 t CO2 and 0.19 t H2 per t (stoichiometry), about 10 MWh of electricity10-500 kt a yearclose to stoichiometric with recyclewater, oxygen from electrolysisabout $800-1,600/t with biogenic CO2 (IRENA 2021, indicative)

How each route works

Natural gas steam or autothermal reforming

Desulphurised gas reacts with steam (and in autothermal designs, oxygen) over nickel catalyst to give syngas, which is compressed and converted to methanol over copper catalyst. Large modern plants use combined reforming to reach 5,000-6,000 t/day in one train.

Lowest cost where gas is cheap; Europe and India are uncompetitive on imported gas.

Argus (2025); USGS MCS 2026; World Bank Pink Sheet (2026); indicative energy use Coal gasification (China)

Coal is gasified with oxygen and steam in entrained-flow gasifiers; the syngas is shifted to the right H2:CO ratio, cleaned of sulphur and CO2, then converted. Many plants feed integrated olefin units (CTO).

Energy security from domestic coal; about 2.6-3.8 t CO2 per t.

IRENA Innovation Outlook: Renewable Methanol (2021, indicative); Argus (2025) Bio-methanol (biomass, waste, biogas)

Biomass or municipal waste is gasified, or biogas is reformed, and the syngas follows the conventional route. Pulp mills also recover crude methanol. Projects such as EM-Numancia in Spain combine biomass gasification with electrolytic hydrogen.

Can reach RED carbon intensity of 32.9 gCO2e/MJ or lower; feedstock logistics limit scale.

Argus (2025); IRENA (2021, indicative); CRU BCInsight (Oct 2026) E-methanol (CO2 + electrolytic hydrogen)

Captured CO2 reacts with hydrogen from water electrolysis over copper catalyst. European Energy's Kassø plant in Denmark (about 42 kt a year) started in May 2025 and supplies Maersk and LEGO.

Near-zero emissions with clean power; costs three to six times fossil methanol.

Argus (2025); IRENA (2021, indicative); stoichiometry Unit economics are indicative ranges from the sources named; costs move with feedstock and energy prices, plant size and region.