The European Green Deal was introduced in 2019, committing the European Union to attain carbon neutrality by 2050. Increasing methanol production will be accompanied by a shift to renewable methanol, namely bio-methanol and e-methanol, due to strict carbon-emission regulations and growing emphasis on e-fuels within the EU. 

Analysis

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<p>As the green hydrogen investment grows, e-methanol production is gaining traction. E-methanol as an e-fuel provides an opportunity to decarbonize multiple industries that can drastically reduce the world&rsquo;s CO2 emissions. E-methanol is produced by combining green hydrogen and captured carbon dioxide from industrial sources. E-methanol still releases some greenhouse gases as it burns, but it emits much less carbon dioxide, nitrogen oxides, sulfur oxide, and particulate matter than conventional fuels.&nbsp;<br /><br />Several drivers for e-methanol include but are not limited to the decarbonization of transportation and heavy industries, fuel diversification, government policies and incentives, corporate sustainability goals, and renewable energy deployment.</p>
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<p><img alt="Chart" height="407" width="560" src="https://cdn.aglty.io/stratas-advisors/reports/analysis/E-Methanol Analysis Europe1.png" /><span style="font-size: 14px;">&nbsp;</span></p>
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<h3>Related Services</h3>
<ul>
<li><a href="~/link.aspx?_id=D75B38B174874E6DB639BC284C235BA7&amp;_z=z">Global Hydrogen Outlook</a></li>
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<h4></h4>

E-Methanol Analysis (Europe)

<h3>Introduction</h3>
<p>As the green hydrogen investment grows, e-methanol production is gaining traction. E-methanol as an e-fuel provides an opportunity to decarbonize multiple industries that can drastically reduce the world&rsquo;s CO2 emissions. E-methanol is produced by combining green hydrogen and captured carbon dioxide from industrial sources. E-methanol still releases some greenhouse gases as it burns, but it emits much less carbon dioxide, nitrogen oxides, sulfur oxide, and particulate matter than conventional fuels.&nbsp;</p>
<p>Several drivers for e-methanol include but are not limited to the decarbonization of transportation and heavy industries, fuel diversification, government policies and incentives, corporate sustainability goals, and renewable energy deployment.</p>
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<h3>Policies in Key European Countries&nbsp;</h3>
<p><span style="font-size: 14px;"><strong>Europe</strong></span></p>
<ul>
<li>The European Green Deal was introduced in 2019, committing the European Union to attaining carbon neutrality by 2050.</li>
<li>The Fit-for-55 package aimed for a GHG (greenhouse gas) reduction of 55% by 2030 and set a target of 100% CO2 emission reduction by 2035.&nbsp;</li>
<li>The package also aims to reduce the GHG intensity of ships by 75% by 2050 by promoting the use of greener fuels in ships.&nbsp;</li>
<li>The Renewable Energy Directive (RED; 2009/28/EC) set the target for each member state, whereby 10% of all energy used in transport is to be from renewable sources by 2020.&nbsp;</li>
<li>The RED also introduced a target of 2.6% electro-fuels in the transport sector by 2030.&nbsp;</li>
</ul>
<p><strong>Denmark</strong></p>
<ul>
<li>Under the new Danish national Power-to-X (PtX) strategy, the government plans to invest 0.2 billion USD towards hydrogen and other PtX products, including e-methanol.&nbsp;</li>
<li>Denmark aims to build upwards of 4-6 GW of electrolysis capacity by 2030 and export hydrogen and PtX products and technology.&nbsp;</li>
<li>Denmark has allowed geographically differentiated tariffs that can benefit PtX plants near renewable power sources and encourage the integrated development of renewable power and PtX plants.&nbsp;</li>
</ul>
<p><strong>Germany</strong></p>
<ul>
<li>Under The National Hydrogen Strategy, Germany will explore regulatory sandboxes for ramping up PtX technologies to an industrial scale, accelerating the process of innovation transfer and exploring the designation of additional areas that can be used for offshore production of hydrogen/PtX.&nbsp;</li>
<li>Specific funds include the German Development Ministry&rsquo;s PtX Development Fund of 250 million euros, that aim to promote hydrogen investments in emerging and developing countries, and the German Economy Ministry&rsquo;s PtX Growth Fund of 300 million euros to support German companies in accelerating the global market ramp-up and infrastructure for green hydrogen.&nbsp;</li>
</ul>
<p><strong>Belgium&nbsp;</strong></p>
<ul>
<li>Under the Vision and Strategy Hydrogen 2022, the federal government plans for H2 derivatives such as e-ammonia, e-methane, e-methanol, or e-kerosene from 40% to 70% of the demand by 2050.</li>
</ul>
<h3>&nbsp;</h3>
<h3>E-Methanol Demand Outlook through 2050</h3>
<p>Increasing methanol production will be accompanied by a shift to renewable methanol, namely bio-methanol, and e-methanol, due to strict carbon-emission regulations and growing emphasis on e-fuels within the EU.&nbsp;The demand for e-methanol is expected to increase significantly through 2050, particularly in the maritime and chemicals sectors.</p>
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<p style="text-align: justify;"><strong style="font-size: 14px;">Sector level</strong></p>
<p style="text-align: justify;"><span style="font-size: 14px; text-align: left;">The International Maritime Organization (IMO) has set a target of reducing international shipping carbon emissions by at least 40% by 2030 from 2008 levels and aims for 70% by 2050 from 2008. Additionally, the Renewable Energy Directive (RED; 2009/28/EC) has introduced a target of 2.6% electro-fuels in the transport sector by 2030 that applies to all EU member states, including those with a large shipping industry like Germany, Belgium, the Netherlands, France, and Spain. The RED is expected to drive the demand for e-methanol as an alternative fuel for the shipping industry and promote the growth of the e-methanol market. Besides the regulatory pressure to reduce its carbon footprint, there is pressure on the European marine sector to reduce its dependence on imported fossil fuels. In addition to displacing fossil-fuel-based methanol in industry and mobility sectors, e-methanol offers a sustainable fuel option for ship propulsion systems. Consequently, the demand for e-methanol in the maritime sector is forecasted to reach 5,886 MTPA in 2050.</span></p>
<p style="text-align: justify;"><span style="font-size: 14px; text-align: left;">The demand for e-methanol in the chemicals sector is forecasted to reach 3,703 MTPA in 2050. An important policy driver is the European Union's Renewable Energy Directive (RED; 2009/28/EC), which introduced a target of 20% renewable energy in the EU's final energy consumption by 2020, and a target of at least 32% by 2030. RED is expected to increase the demand for e-methanol in the chemical industry because e-methanol be used as a feedstock for producing various chemicals, including formaldehyde and acetic acid. In addition, the European Chemicals Agency (ECHA) has identified e-methanol as a key feedstock for producing chemicals.&nbsp;</span></p>
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<p style="text-align: justify;"><span style="font-size: 14px; text-align: left;"><em>Source: Stratas Advisors</em></span></p>
<p style="text-align: justify;"><span style="font-size: 14px; text-align: left;"><strong>Country-level perspective&nbsp;</strong></span></p>
<p style="text-align: justify;"><span style="font-size: 14px; text-align: left;">The forecasts for E-Methanol demand at the country-level considers the demand from the various sectors, including transportation, chemicals, and energy, within the context of government policies and regulations, including incentives for low-carbon fuels, carbon pricing, and emissions standards, and the competitive advantages of E-Methanol</span></p>
<ul>
<li style="text-align: justify;"><span style="font-size: 14px; text-align: left;">E-Methanol demand in Germany, Belgium, and France are projected as 1795, 1081, and 528 MTPA respectively by 2050, driven mainly by the decarbonization of heavy industry, underpinned by the Green Deal and the Renewable Energy Directive.&nbsp;</span></li>
<li style="text-align: justify;"><span style="font-size: 14px; text-align: left;">The demand of Spain and the Netherlands are projected as 1456 and 1310 MTPA, respectively, by 2050 stemming mainly from maritime decarbonization.&nbsp;<strong><br /></strong></span></li>
</ul>
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<p><em>Source: Stratas Advisors</em></p>
<h3>E-Methanol Projects in Europe</h3>
<p>The current e-methanol capacity in Europe is 6.10 MTPA, which is associated with five operating e-methanol plants within Europe. Germany has two plants with a combined capacity of 1.86 MTPA while Iceland, Denmark, and Belgium each have one plant. Details regarding the projects can be found here: <a href="https://cdn.aglty.io/stratas-advisors/reports/analysis/E-Methanol Analysis Europe.pdf"><strong>E-Methanol Projects</strong></a>.</p>
<p>In total, there are 33 e-methanol projects in Europe at various completion stages that will come online between 2022 and 2032. Based on the announced pipeline projects, the total capacity will reach 2056 MTPA by 2032 (CAGR of 91%).&nbsp;</p>
<ul>
<li>Denmark has nine projects in the pipeline with a combined capacity of 423 MTPA, which represents 21% of the capacity growth.&nbsp;</li>
<li>Belgium has five upcoming projects with a combined capacity of 375 MT, which represents 18% of the capacity growth.&nbsp;</li>
<li>Germany has six projects in the pipeline with a combined capacity of 330 MTPA, which represents 16% of the capacity growth.&nbsp;</li>
<li>The Netherlands has three upcoming projects with a combined capacity of 279 MTPA, which represents 14% of the capacity growth.&nbsp;</li>
<li>France has only 1 project in the pipeline with announced capacity of 200 MTPA, which represents 10% of the capacity growth.&nbsp;</li>
</ul>
<p>The chart below highlights the E-methanol projects in pipeline by country.</p>
<p><img alt="" height="400" width="562" src="https://cdn.aglty.io/stratas-advisors/reports/analysis/E-Methanol Analysis Europe1.png" /></p>
<p><em>Source: Stratas Advisors</em></p>
<h3>E-Methanol Supply Outlook through 2050&nbsp;</h3>
<p>Considering the expected availability of green hydrogen, and government policies and incentives supporting renewable energy, including e-methanol production, Europe e-methanol supply is forecasted to reach 7,659 MPTA in 2050.&nbsp;</p>
<ul>
<li>Germany&rsquo;s supply share will be 22%.&nbsp;</li>
<li>Belgium&rsquo;s supply share will be 15%.&nbsp;</li>
<li>France&rsquo;s supply share will be 15%.&nbsp;</li>
<li>Netherlands&rsquo;s supply share will be 14%.&nbsp;</li>
<li>Denmark&rsquo;s supply share will be 9%.&nbsp;</li>
</ul>
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<p><em>Source: Stratas Advisors</em></p>
<div>By 2050, Europe is projected to face a shortfall of 1,983 MTPA of e-methanol, leading to reliance on imports to meet demand.</div>
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Europe

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