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Increasing Need for Cleaner Automobile Fuel Driving Methanol Demand

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Aryan Kumar
Increasing Need for Cleaner Automobile Fuel Driving Methanol Demand

A large volume of methanol is used in the production of formaldehyde, solvent, acetic acid, meth tert-butyl ether/Tert-amyl methyl ether (MTBE/TAME), methanol-to-olefins/methanol-to-propylene (MTO/MTP), dimethyl terephthalate (DMT), methyl methacrylate (MMA), and dimethyl ether (DME). These petrochemical products are being increasingly used in the automotive and construction industries. Therefore, the increasing construction activities and the flourishing automobile industry, owing to the soaring disposable income of people and accelerating urbanization rate, will create a huge requirement for methanol in the upcoming years.

Moreover, the mounting demand for methanol-based fuel as alternative automobile fuel, owing to the rising consciousness about increasing air pollution levels, will steer the methanol market growth during 2021–2030. According to P&S Intelligence, the market generated revenue of around $20 billion in 2020. As per the World Health Organization (WHO), air pollution causes around 7 million deaths worldwide every year. This international organization further estimates that 9 out of 10 individuals breathe air that exceeds WHO limits on pollutant content in the air.

In recent years, methanol manufacturers, such as Methanex Corporation, OCI N.V., Celanese Corporation, Mitsubishi Gas Chemical Company Inc., QAFAC, Petroliam Nasional Berhad (PETRONAS), OQ SAOC, LyondellBasell Industries N.V., BASF SE, and SABIC, are emphasizing on facility expansion to promote R&D activities, increase production capacity, and reach out to a greater number of customers. For instance, in June 2020, Assam Petro-Chemicals Limited (APL) announced its plan to expand its methanol production capacity to 500 tons per day.

Geographically, Asia-Pacific (APC) will lead the methanol market in the foreseeable future, owing to the expanding petrochemical industry in the region. Petrochemical companies use methanol in the production of DME, acetic acid, and formaldehyde. In addition, the burgeoning demand for methanol-based fuel in Japan, China, and India will also accelerate the consumption of this chemical in the region. Besides, the booming electronics industry, increasing construction activities, and mushrooming automobile production will also propel the usage of methanol in APAC.

Thus, the increasing demand for petrochemicals from the construction and automotive industries and the rising public demand for methanol-based fuel will facilitate the usage of methanol, globally.

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