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How Methanol is Produced

How is Methanol Produced?

While today we produce methanol from natural gas, methanol can also be made from renewable sources, such as renewable natural gas, biomass and green hydrogen combined with recycled carbon dioxide. Methanex is studying the feasibility of converting our existing assets to produce lower-carbon intensity methanol. We are committed to pursuing opportunities to make incremental, staged investments that could facilitate the transition of our existing assets, where feasible, to produce lower-carbon methanol.

For additional information, please visit the Advancing Low-Carbon Solutions section of the website.

Methanol Types and Production Methods

Select a type of methanol to learn more
Brown Methanol

Produced from coal, a non-renewable feedstock which is ~5 times higher in carbon intensity than methanol produced using natural gas. Methanex does not produce methanol from coal.

Natural Gas
Grey Methanol

Produced from Natural Gas, a non-renewable/fossil fuel feedstock.

The majority of the methanol that we produce at Methanex is grey methanol.

Blue Methanol

Produced from a process that uses Carbon Capture and Storage (CCUS). The resulting product of this process is considered blue methanol and would have significantly lower emissions than conventional methanol.

In 2023, Methanex has confirmed the technical feasibility of CCUS at our Medicine Hat and Geismar sites—the most promising locations for implementing this technology. Despite technical feasibility, project economics require a price premium for blue methanol and we continue to gauge customer interest.

Renewable Electricity

Produced using green hydrogen (ie hydrogen produced with renewable electricity), which when combined with CO2 captured from renewable sources (eg via bioenergy with CCS or Direct Air Capture) creates green methanol.

In 2023, we conducted a technical and economic feasibility study of incorporating electrolyzers (to produce hydrogen from renewable power) at our existing plants.

In 2024, we plan to further explore the feasibility of e-methanol specifically at our Geismar, U.S. and Damietta, Egypt sites. In the U.S., the 45V tax credits under the U.S. Inflation Reduction Act provide economic support for renewable hydrogen production. In Egypt, the location is advantaged because of its proximity to Europe, potential access to European incentives, and access to competitive renewable power and sources of CO₂.

Renewable Natural Gas

Produced from renewable natural gas (sourced from landfills, sewage plants or animal manure farms) -> We have received International Sustainability & Carbon Certification (ISCC) for bio-methanol production from renewable natural gas at our Geismar site in the U.S.

Produced from biomass feedstock -> Potential sustainable biomass feedstocks include but are not limited to (I) forestry and agricultural waste by products (ii) municipal solid waste and (iii) black liquor from the pulp and paper industry.

High Carbon Intensity
Low Carbon Intensity
Marine Fuel