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Renewable methanol more cost-competitive than advanced biofuels?

Renewable methanol more cost-competitive than advanced biofuels?
Photo courtesy of Geely Auto Group

The price of any sustainable fuel will naturally reflect the required capital expenditure and operating costs. Given the right conditions, the current cost of renewable methanol produced with “reasonable” electricity rates is around EUR150 or USD179 per megawatt-hour (Mwh), says Thomas Cotter, business development manager at specialty chemicals manufacturer Clariant. This places renewable methanol “on the high end when compared to advanced biofuels,” he says.

Speaking at an event hosted by the Methanol Institute on 5 August 2020 on ‘Renewable Methanol: A Net Carbon-Neutral Fuel,’ the Clariant representative highlighted a profitable path to renewable methanol, and how methanol can compete with biomass-derived products as a chemical or fuel. The Methanol Institute was established in 1989 and is recognised as the trade association for the global methanol industry.

Methanol has a 100-year history of safe production and is one of the top five most widely traded chemicals in the world. In the 1990s, the liquid chemical was actively marketed as an alternative fuel for compatible vehicles. In the United States, a peak of almost six million gallon gasoline equivalent of 100% methanol and 85-15 methanol gasoline blends was achieved.

Use of methanol as an alternative fuel declined after the 90s, despite its desirable attributes. Methanol remains liquid at ambient temperatures and pressure making it easy to store, handle and distribute. Much of the infrastructure required to deploy methanol as a fuel is largely available. Its “polygeneration” abilities allow methanol to be produced using any resource that can be converted into synthesis gas, ensuring almost limitless feedstock.

Increasing political and environmental pressure to combat greenhouse gas (GHG) emissions have seen methanol return to the mainstream agenda. Since 2014, methanol production has grown 6% annually, predominantly driven by energy-related applications.

Experience with ethanol suggests that the automotive industry is not interested in substantive changes. Fortuitously, the chemical and physical fuel properties of methanol are similar to ethanol, and methanol has gained increasing acceptance as a transportation fuel. Engines, fuel cells and power blocks can all be adapted for methanol easily and affordably. Methanol is enjoying increasing use in gasoline blends, as a diesel substitute in heavy-duty vehicles, and as a marine bunker fuel.

Chinese automaker Geely Auto Group, which owns automotive brand Volvo, has been utilising methanol in automotive engines since 2005 and has deployed methanol-fuelled taxis throughout the country. In 2012, China initiated a methanol vehicle pilot program, led by the Ministry of Industry and Information Technology. The potential for methanol fuel is well understood in China and throughout Asia.

For years, the marine industry has relied on “antique” heavy fuel oils, with current usage of approximately 300 million tonnes. Biofuel volumes are insufficient to replace this amount of heavy fuel oil, says Damian Speight, head of market innovation at Orsted, the largest energy company in Denmark. The marine industry has made a strong commitment to methanol, which can be stored in the outer walls of ships, minimising the impact on cargo capacity, unlike liquid natural gas.

While there is no denying wind and solar photovoltaic electricity are the fastest-growing sources of clean energy, the problem is their variability. A fluctuating electric yield might not match peak demand. Electricity must be dispatched as soon as it is produced, potentially leading to wasted energy. Power-based fuels, or Power-to-X, solve one of the biggest energy transition hurdles — storage — by using renewable energy to create a tangible fuel. Power-based fuels are forecast to consume approximately 3,000 TWh of renewable energy by 2050, says Cotter.

Today, 95% of methanol production uses fossil-based feedstocks, says Tim Chan, manager of government relations and business development, Asia & Middle East, at the Methanol Institute based in Singapore. Chan told event participants this is an important starting point for the transition to clean and sustainable fuels and encourages carbon and waste circularity, renewable lowers GHG emissions by carbon capture and diversifies waste management.

A wide range of feed-stocks for methanol include municipal solid waste (MSW), agricultural waste, forestry residues, carbon dioxide (CO2) and renewable hydrogen. Gasification or fermentation of biomass produces synthesis gas, which needs to be upgraded to be transformed into methanol substrate, before being processed in a reactor and formed into bio-methanol. Creating clean syngas from a wide range of wastes can be challenging, says Cotter, and adds to the cost of the process. Additionally, certain feedstocks can leave a significant amount of CO2 unused, he says.

The electro-fuel pathway uses renewable electricity to extract hydrogen from water by electrolysis. CO2 captured from the atmosphere or industrial sources is reacted with hydrogen to produce renewable methanol. Electricity pricing is the key driver in the cost of this fuel. Overflow of electricity demand means renewable methanol is produced when demand is at its lowest — keeping pricing in check.

Renewable methanol has been estimated to reduce CO2 by 95% and nitrogen oxide by 80% and produces no sulphur oxides and particulate matter emissions. The fuel offers a clear pathway to drastically cutting emissions from transport, shipping, and industry. Clariant believes power-based methanol production is the most efficient process to capture carbon and can produce negative CO2 emissions. We will see significant growth in renewable methanol as the synthetic fuel markets mature.

Clariant has a long history in Power-to-X, and has been active in developing methanol catalysts and technical support of methanol production processes and syngas generation. Cotter suggests we will see fuel costs approaching EUR100 or USD119 per MWh with the increasing availability of renewable energy, improving cost positions in critical investments, and next-generation catalysts and reactor technology. This pricing allows methanol to compete with advanced biofuels, he says.

This is relevant because the market for advanced biofuels already exists in the European Union, says Cotter. A proportion of renewable transport fuel is mandated in Europe’s Renewable Energy Directive (RED), which encourages an increasing share of advanced biofuels each year in the total energy mix.

With process innovations and efficiency gains, Clariant believes power-based methanol can become an attractive investment, and competitive with advanced biofuels, within five to 10 years. Advanced biofuel costs vary widely depending on technology and feedstock availability, says Cotter.

The Clariant representative highlighted a new generation of methanol catalysts designed for CO2 that offer improved commercial output and reliability. Importantly, Cotter suggests new process technologies achieved at Air Liquide’s pilot unit in Frankfurt, Germany, using Clariant’s Megamax 800 catalyst, also addresses the significant issue of hydrothermal deactivation.

High concentrations of water slow catalyst performance can contribute to hydrothermal ageing. By condensing water regularly the catalyst is exposed to less water, which is likely to enable longer lifetimes and higher productivity.