Scaling Up Hydrogen: The Case For Low- Carbon Methanol

Low-carbon methanol could become the most important source of demand for clean hydrogen in the near term. Not only is it a large chemical market that needs decarbonizing, but low-carbon methanol is also the most readily available option for the shipping sector to reduce its emissions. Regulations in the European Union and the net-zero goal of the International Maritime Organization are pushing the shipping sector to procure green fuels. BNEF estimates the planned capacity of low-carbon methanol projects globally could consume 1.65 million metric tons of clean hydrogen annually. This BNEF and Climate Technology Coalition whitepaper provides an overview of hydrogen’s role in methanol production, and outlines potential commercial and policy considerations that, if implemented, could bring forward the timeline for cost competitive
clean methanol.

The Bloomberg New Economy Climate Technology Coalition

This paper was commissioned as part of BloombergNEF’s work as Research Partner for the Bloomberg New Economy Climate Technology Coalition. The Coalition was formed in 2022 by a global group of stakeholders that are well placed to provide insights on approaches to industrial decarbonization. It has set an agenda to identify and support the rapid scale-up of the next generation of climate-critical green technologies that will be instrumental in achieving the world’s goals to avoid climate catastrophe. The planet simply cannot wait for polluting industries to slowly shift strategy and technologies.

This initiative seeks to inspire and lead by example. It will take getting into specifics to make any tangible progress and, to that end, the Coalition – composed of technology specialists, researchers, financiers, industrialists and public sector experts – is initially focused on tackling roadblocks to scaling up the clean hydrogen ecosystem, and further on decarbonizing ‘hard-to-abate’ sectors (where cleaner alternatives are currently lacking or prohibitively expensive) through initiatives on low-carbon ammonia, methanol and steel.

Coalition members have given insight into their own projects and efforts in these areas, some of which can be found in this BNEF-produced report. The Coalition finds it encouraging that BNEF’s thorough analysis shows potential for decreasing green hydrogen costs, identifying pockets of demand, and increasing clean hydrogen and methanol production capacity.

Steering Committee:

Mike Bloomberg, Founder of Bloomberg LP & Bloomberg Philanthropies
Mark Carney, UN Special Envoy for Climate Action and Finance and Chair of Brookfield Asset
Management; Head of Transition Investing; Chairman of the Board, Bloomberg
Natarajan Chandrasekaran, Chairman, Tata Sons
Bruce Flatt, CEO, Brookfield Asset Management
Dr. Andrew Forrest AO, Chairman, Fortescue
Neil Shen, Founding & Managing Partner, HongShan
Lord Adair Turner, Chairman, Energy Transitions Commission
Lei Zhang, Founder and CEO, Envision Group

The Climate Tech Coalitions’ research partner, BloombergNEF (BNEF), is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.