Global Methanol Market 2026-2035

Methanol Market Size, Share & Trends Analysis Report by Feedstock (Natural Gas, Coal, Biomass & Renewables), by Derivative Chemicals (Acetic Acid, Methyl Methacrylate (MMA), Silicone, Olefins, Formaldehyde), by Fuel (Gasoline Blending/Substitute, Diesel Blending/Substitute, Bio-Diesel Production, Methyl Tertiary Butyl Ether (MTBE), Dimethyl Ether (DME)) and by End-User Industry (Automotive, Construction, Marine, Electronics & Appliances, Chemicals, and Others), Forecast Period (2026-2035)

Industry Overview

Methanol market was valued at $42.2 billion in 2025 and is projected to reach $68.4 billion by 2035, growing at a CAGR of 4.2% during the forecast period (2026-2035). Global methanol market is gaining strong momentum owing to the growing demand from the chemical industry, rising adoption of methanol as an alternative fuel, increasing focus on renewable and low-carbon methanol, abundant feedstock availability and flexible production routes and government policies and environmental regulations.

Global Methanol Market Overview and Key Industry Developments

• Globally, over 90 methanol plants have a combined production capacity of about 110 million metric tons. This extensive production network highlights methanol's critical role as a key feedstock for fuels, chemicals, and clean energy applications globally.
• The usage of methanol is expanding in both the conventional chemical industry and more recent uses, such as a fuel for steam generators, boilers, cooking stoves, and transportation across land and sea. Currently, almost 40% of methanol is used for fuel purposes.
• Methanex is the global leader in methanol production and supply, serving major international markets. The company has an annual operating capacity of 10.4 million tonnes of methanol, supported by nine operating plants across six production sites globally.

Market Dynamics

Regulatory Support and Technological Advancements Driving Methanol Market Growth

Government initiatives and stricter environmental regulations are playing a key role in accelerating the adoption of methanol as a cleaner and more sustainable alternative to conventional fuels and feedstocks. The shift toward low-carbon economies and emission control measures is promoting methanol's use across energy, transportation, and industrial sectors. These include the EU's FuelEU Maritime and emissions trading scheme (EU ETS) and similar planned regulations from IMO, which are all expected to encourage shipowners to adopt low-carbon or zero-carbon fuels in the long term. This regulatory pressure supports methanol uptake in shipping and marine transport sectors.

Furthermore, technological advancements in low-carbon and renewable methanol production are emerging as major drivers of the global methanol market. Innovations such as carbon capture utilization, electrified reforming, and green hydrogen integration are enhancing production efficiency while reducing emissions. For instance, in October 2025, European Energy has partnered with German firm SYPOX to deploy its electrified steam methane reforming (e-SMR) technology for bio-methanol production. The process uses renewable electricity to convert biogas into green methanol, cutting both costs and carbon intensity. First commercial 10-MW unit planned for 2026 following more than 80,000 hours of prototype testing.

Setbacks and Delays in Global Green and E-Methanol Development

Despite growing global interest in sustainable fuels and the increasing adoption of methanol as a low-carbon alternative in shipping and industrial applications, the commercialization of green methanol and e-methanol projects faces significant pressure. The market remains constrained by high capital costs, limited policy clarity and the difficulty of securing long-term offtake agreements at viable prices. These challenges have led to delays, scale-backs, and even cancellations of key renewable methanol projects, hindering the overall expansion of low-carbon methanol supply and slowing the pace of transition away from conventional, fossil-based methanol production. In 2025, Orsted, cancelled its flagship e-methanol project in Ornskoldsvik, Sweden, which was set to produce 55,000 tons of e-methanol annually. The decision stemmed from high project costs and the inability to secure long-term offtake contracts at viable prices. Similarly, companies such as Shell and Fortescue have paused or scaled back renewable fuel initiatives, underscoring the economic and commercial challenges restraining growth in the global green methanol market.

Market Segmentation

• Based on the feedstock, the market is segmented into natural gas, coal, biomass, and renewables.
• Based on the derivative chemicals, the market is segmented into acetic acid, Methyl Methacrylate (MMA), silicone, olefins, formaldehyde.
• Based on the fuel, the market is segmented into gasoline blending/substitute, diesel blending/substitute, bio-diesel production, Methyl Tertiary Butyl Ether (MTBE), Dimethyl Ether (DME).
• Based on the end-user industry, the market is segmented into automotive, construction, marine, electronics & appliances, chemicals, and others.

Formaldehyde: A Major Derivative Fueling Methanol Market Expansion and Holding a Large Market Share in the Derivative Chemicals Segment

Formaldehyde is produced by the catalytic oxidation of methanol, making methanol its primary raw material. A significant portion of global methanol output is used for formaldehyde production. Formaldehyde an essential reactive intermediate (or ingredient) in the production of many common products and is widely utilized across sectors (building materials, flooring, medical devices, automobiles, agriculture applications).

End-Use Sectors Driving Formaldehyde Demand

• Automotive: In the automotive sector, formaldehyde-based technologies are utilized to create interior molded and under-the-hood components that improve fuel efficiency by reducing vehicle weight. It is also utilized in the manufacture of long-lasting exterior primers, clear coat paints, tire cord adhesives, brake pads, and fuel system components.
• Building & Construction: Formaldehyde-derived resins (industrial adhesives) are utilized as a binder system to bind wood chips and other materials together to create plywood, particleboard and fiberboard, asphalt shingles, furniture and paneling, kitchen cabinets, molding and trim work, paints and varnishes, and a variety of other housing industry applications.
• Medicine & Medical: Formaldehyde is widely employed as a preservative in medical laboratories, as a sterilizer, and in vaccines. Formaldehyde chemistry is also employed early in the upstream supply chain to produce molecules required in the manufacture of vital medical devices (such as pacemakers, artificial heart valves, and prostheses).

Additionally, global methanol market is undergoing growing investments in derivative production facilities, particularly for formaldehyde and its related compounds, as demand from construction and manufacturing sectors rises. For instance, in October 2025, Al-Ahram Chemicals and MDC have signed a contract to build an industrial complex in the Sokhna Industrial Zone for producing formaldehyde, form urea, and related derivatives like glue and melamine. The $10 million project, covering 14,000 sq. m, will generate around 150 jobs. Commercial operations are set to begin in early 2027, with an annual capacity of 25,000 tonnes each of formaldehyde and form urea.

Regional Outlook

The global methanol market is further divided by region, including North America (the US and Canada), Europe (the UK, Germany, France, Italy, Spain, Russia, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, Australia and New Zealand, ASEAN Countries, and the Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Asia-Pacific Is Leading the Global Methanol Market

The Asia-Pacific methanol market is primarily driven by government policies and clean energy initiatives, expansion of chemical and automotive sectors, rapid industrialization and urbanization, and technological advancements and capacity expansion. Market leader such as Methanex Corp derives around 35% of its global sales from China, reflecting the region's crucial role in global methanol demand and its growing impact on the overall market landscape.

Methanol Production and Utilization Trends Across Key Asia-Pacific Economies

• China is the largest methanol producer and consumer globally, producing around 70% of its methanol from coal, and is the global leader in methanol as a transportation fuel. There are more than 30,000 M100 sedans and 4,000 heavy duty trucks running on methanol in China helping to reduce air pollution.
• India has significant potential to create methanol from native high ash coal and biomass, which might serve as a reliable and cost-effective fuel in the transition to a hydrogen economy.
• Indonesia also has significant potential to produce methanol from coal and biomass domestically and is one of the main markets for biodiesel.
• Japan's methanol production is focused on innovative, sustainable methods rather than large-scale conventional production. Companies are developing and piloting technologies to produce methanol from sources such as sewage gas, captured CO2, and industrial by-product gases to reduce reliance on fossil fuels

Furthermore, in Asia Pacific nation such as Japan is making significant progress toward sustainable methanol production as part of its broader decarbonization goals. The country is focusing on innovative pathways such as converting waste gases and biomass into renewable methanol, reducing reliance on fossil fuels. For instance, in June 2024, Mitsubishi Gas Chemical Company, Inc. announced that it has begun producing bio-methanol at a just-completed facility within the company's Niigata Plant, becoming first producer of bio-methanol from digester gas in Japan. It is anticipated that bio-methanol will be important as a sustainable chemical feedstock and as a carbon-neutral fuel. Additionally, by utilizing local biomass, this project will help Niigata Prefecture decarbonize, which aligns with the prefecture's objective of becoming carbon-neutral by 2050 and its vision of creating carbon-neutral enterprises.

Middle East Methanol Market Expands on Abundant Gas Resources and Rising Clean Energy Investments

The Middle East methanol market is expected to grow rapidly, abundant and low-cost feedstock, strategic shift toward low-carbon fuels, and government initiatives and rising investment from national energy companies. The Middle East has large natural gas reserves, which are the main feedstock for conventional methanol production. For instance, in 2024, Saudi government announced that Jafurah, the largest unconventional natural gas field in Saudi Arabia, contains 229 Tcf in natural gas reserves, which includes 15 Tcf of additional proved reserves, while other nation such as Iran holds the second largest natural gas reserves globally.

Furthermore, Middle East is increasing the investment in large-scale methanol projects to boost its global market presence. Multiple facilities and new projects are under development across the region. For instance, in February 2025, TA'ZIZ awarded SAMSUNG E&A a $1.7 billion (AED 6.2 billion) engineering, procurement and construction (EPC) contract to construct the UAE's first methanol plant in Al Ruwais Industrial City, Abu Dhabi. The facility, scheduled for completion in 2028, will produce 1.8 million tons of methanol annually and will be powered by clean energy from the grid, making it one of the world's most energy-efficient methanol facilities.

Market Players Outlook

The major companies operating in the global methanol market include Methanex Corporation, SABIC, Zagros Petrochemical Co., Mitsubishi Gas Chemical Company, Inc., and Proman AG among others. Market players are leveraging partnerships, collaborations, mergers, and acquisition strategies for business expansion and innovative product development to maintain their market positioning. For instance, in June 2025, Methanex Corporation completed the acquisition of OCI Global's international methanol business, enhancing its global production and trading network.

Recent Developments

• In September 2025, Methanex Corporation announced new strategic partnerships in two of the global keys fueling hubs-the ARA (Amsterdam-Rotterdam-Antwerp) region and South Korea. In the ARA region, Methanex is partnering with TankMatch to provide safe, barge-to-ship methanol bunkering. In South Korea, Methanex is working with Alpha Maritime and Hyodong Shipping to enable last-mile bunkering operations.
• In July 2025, Johnson Matthey announced that the three methanol production trains of Inner Mongolia Baofeng Coal-based New Materials Co Ltd, a wholly owned subsidiary of Ningxia Baofeng Energy Group, in November 2024, February 2025, and March 2025, respectively. Located in the Wushenqi Sulige Economic Development Zone of Ordos City, Inner Mongolia Autonomous Region, this plant employs Johnson Matthey's advanced methanol synthesis technology and catalysts, making it one of the largest single methanol plants globally.

The Report Covers:

• Market value data analysis of 2025 and forecast to 2035.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global methanol market. Based on the availability of data, information related to new products and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying 'who-stands-where' in the market.