Industry Insight: Institutional Rigid Demand for Green Methanol

2026/04/20 15:57

The development logic of the green methanol industry today is fundamentally different from traditional energy transition pathways. Its core driving force does not lie in simple economic comparisons, but in the global shipping emission reduction compliance system jointly established by the IMO 2050 Net Zero Strategy, EU CBAM, FuelEU Maritime and other regulations.

Through carbon pricing, mandatory emission reduction targets and heavy penalties, this system has systematically raised the compliance costs of traditional high-carbon fuels, thereby creating clear price space and market demand for low-carbon fuels including green methanol.

Meanwhile, China has aligned closely with international rules such as EU CBAM and RED III, and accelerated the development of green fuels and hydrogen-based energy systems.

The 15th Five-Year Plan clearly regards hydrogen energy as a key future industry, lists green power-based hydrogen, ammonia and methanol production as major technological research projects, and promotes large-scale non-electric utilization of renewable energy.

The Ministry of Industry and Information Technology has specified that clean and low-carbon hydrogen will be applied on a large scale in the synthetic methanol industry by 2027 to increase the proportion of green hydrogen consumption.

Domestic policies have shifted from pilot projects to systematic advancement, and green methanol has entered a phase of accelerated capacity expansion.

The feature of institutional demand means demand growth will closely follow policy milestones and show phased leaps.

According to Clarkson Research, by the end of 2025, 439 vessels worldwide had been confirmed to adopt methanol fuel, generating potential annual green methanol demand exceeding 11 million tons.

In addition, based on MAN Energy Solutions’ forecast of the global shipping fuel transition pathway, annual green methanol demand from the shipping sector is expected to reach around 128 million tons by 2040, and further rise to approximately 255 million tons by 2050.

Nevertheless, current global effective green methanol capacity is far from meeting such demand, resulting in a massive supply-demand gap.

According to the green methanol project database jointly developed by the Global Methane Institute and Finland’s GENA, global green methanol capacity stood at about 1.2 million tons per annum by the end of December 2025. Compared with current demand of over 11 million tons, there is a severe short-term supply shortage.

This indicates the industry has moved beyond the technical discussion stage into a period of large-scale supply capacity development. Effective supply capability will become the core benchmark for corporate value evaluation.

Sinochem Chemical