[SMM Analysis] From transportation to ESS, how can green methanol crack the development code in the era of dual carbon goals?

I. Strong Policy Support Ushers in an Opportunity Period for Green Methanol Development

Against the backdrop of global efforts to actively address climate change and promote energy transition, policy support for green methanol continues to intensify. China has classified hydrogen energy and related industries as strategic emerging industries, providing macro-policy guidance for the development of the green methanol industry.

The "Construction Plan for a Low-Carbon Island in Hainan" explicitly proposes promoting research on low-carbon energy consumption technologies, such as efficient solar cells, electrochemical energy storage, and green hydrogen-to-methanol production, offering a development direction for the application of green methanol in the energy sector. Proposals from Jilin Province, including the construction of green methanol product export channels and regional planning for green methanol and other green hydrogen chemical product transportation networks, have also received positive responses from relevant departments such as the National Energy Administration. It is expected that methanol transportation pipelines will be comprehensively planned in relevant national plans in the future.

II. Facilitating Domestic Hydrogen Consumption and Alleviating New Energy Consumption Pressure

China boasts a vast hydrogen production capacity. In 2024, the hydrogen production capacity exceeded 50 million mt, with a total production and consumption scale exceeding 36.5 million mt, ranking first in the world. Among them, the development of hydrogen production from renewable energy electrolysis has accelerated, but it still faces consumption challenges. The production of green methanol provides an important consumption pathway for hydrogen.

By preparing green methanol through hydrogenation of carbon dioxide, hydrogen, which is difficult to store and transport, can be converted into a liquid energy source with higher energy density and easier storage and transportation. According to statistics, China emits approximately 8 billion tons of high-concentration CO₂ annually. If one-tenth of this is utilized to synthesize green and low-carbon methanol, approximately 600 million tons of green and low-carbon methanol can be produced. This not only enables the resourceful utilization of carbon dioxide but also effectively consumes a large amount of hydrogen.

Meanwhile, China's wind and PV power generation have developed rapidly. As of May 2025, the cumulative installed capacity has exceeded 1.65 billion kW, surpassing thermal power installed capacity. Converting wind and PV power into green methanol on-site can save substantial investments in power grid construction and upgrades, alleviate new energy consumption issues, and reduce curtailment of wind and PV power generation.

III. Diversified Applications and Wide Application Fields

1. Prominent Advantages in the Transportation Sector

In the transportation sector, green methanol demonstrates unique advantages. Ships powered by methanol are emerging, such as the "Yuanyang 9801" methanol dual-fuel new energy ship invested in and constructed by Changyun Logistics Company, a subsidiary of China Aviation Oil. Equipped with an internationally advanced methanol and diesel dual-fuel power system, compared to traditional fuel ships, it can achieve a reduction of over 60% in sulfur oxide emissions, a 25% decrease in nitrogen oxide emissions, a 10%-15% drop in carbon emission intensity per voyage, and a 3%-8% improvement in energy utilization efficiency. In terms of vehicles, methanol-hydrogen electric heavy-duty trucks have significant advantages. By using green methanol, they can achieve zero carbon emissions throughout their life cycle. Compared to diesel trucks, nitrogen oxide emissions are reduced by 82%, carbon monoxide emissions by 88%, and PM particulate matter emissions by 98%. Their driving range is three times that of pure electric heavy-duty trucks, with a maximum driving range of up to 1,500 kilometers. Moreover, methanol refueling is convenient and flexible, with a refueling time comparable to that of gasoline vehicles.

2. Huge Potential in the Industrial Sector

In the industrial sector, green methanol can be used as a chemical raw material for the production of various chemical products. For example, the traditional ammonia synthesis and methanol industries are actively transitioning towards green practices, utilizing renewable energy-based hydrogen production to partially replace coal-based and natural gas-based hydrogen production, or employing industrially captured CO₂ with renewable energy-based or by-product hydrogen for methanol production.

3. Emerging in the Energy Sector

In the energy sector, green methanol can serve as an energy storage carrier. Excess electrical energy is used to produce hydrogen through water electrolysis, which is then converted into methanol for storage. When needed, methanol can be reformed to produce hydrogen for power generation, enabling the storage and flexible allocation of electrical energy. Green methanol also has application potential in the fuel cell sector. With continuous technological advancements, methanol fuel cells are expected to find wider applications in distributed power generation, mobile power supplies, and other fields.

IV. Challenges and Countermeasures

1. Cost Challenges

High costs are one of the major obstacles to the large-scale application of green methanol. On the one hand, the cost of renewable energy-based hydrogen production remains high, necessitating further improvements in water electrolysis efficiency and reductions in equipment investment and operating costs. On the other hand, the costs associated with green methanol production, storage, transportation, and refueling also need to be reduced. This can be achieved through technological innovations, such as developing new catalysts and optimizing processes to enhance production efficiency, as well as through large-scale production and the construction of large storage and transportation facilities to reduce unit costs.

2. Low Market Awareness and Acceptance

As an emerging energy product, green methanol has low market awareness and acceptance. Both consumers and industrial users have doubts about its performance, safety, and economic viability. It is necessary to strengthen market promotion and public education, demonstrating the advantages of green methanol through demonstration projects to enhance market awareness and acceptance.

V. Conclusion

As a highly promising green energy source, green methanol exhibits unique value in terms of policy support, hydrogen consumption, and diversified applications, with significant potential in both domestic and overseas markets in the future. Despite facing numerous challenges at present, with continuous technological advancements, sustained policy support, and gradual market maturation, green methanol is expected to play a crucial role in the global energy transition and become an important force in achieving the "dual carbon" goals.

The above data sources include: China Hydrogen Energy Development Report (2025), National Electric Power Industry Statistical Data from January to May 2025, the National Energy Administration, China Aviation Oil, etc.