More plastic recycling, use of e-fuels could cap methanol demand

The International Energy Agency (IEA) has said continued commitments to the increased use of e-fuels along with developments in plastic recycling could put a cap on demand for methanol despite forecasts that it was set to grow. The IEA said demand for methanol, used in chemicals and fuel production, could peak by 2045, with growing plastic recycling, falling demand for liquid fuels and rising demand for EVs and hydrogen fuel as the main reasons.

LONDON (ICIS)–The development of plastics recycling and the potential drop in liquid fuels demand on the back of the development of clean energy sources such as hydrogen could cap methanol demand in the next decades, the International Energy Agency (IEA) said on Thursday.

This would only be achieved if commitment to those reforms remains strong, it added.

Demand for methanol, a key intermediate in chemicals and fuels production, had been expected to continue to grow continuously well into the future.

However, under the IEA’s sustainable development scenario – a roadmap developed by the agency for the world to reach net-zero emissions by 2070 – consumption could peak in the mid-2040s.

The key drivers for methanol demand to peak would be the growth of the plastics recycling sector and reduced usage of liquid fuels in the transport sector as the electric vehicle (EV) sector and clean hydrogen power continue to grow, according to the IEA.

“Additional plastic recycling reduces the need for methanol production,” the Paris-headquartered agency said in its energy technology perspectives report, released on Thursday.

Fuel applications account for around a third of methanol production, and under the agency’s sustainable development scenario, liquid fuel use would be largely extinct under that timeline.