Published May 2014
Methanol is also known as methyl alcohol or wood alcohol. It was once produced chiefly as a by-product of the destructive distillation of wood. Today, methanol is produced in a catalytic industrial process directly from carbon dioxide, carbon monoxide and hydrogen.
Methanol is the simplest alcohol. At room temperature, it is a polar liquid, and is used as antifreeze, a solvent, fuel, and as a denaturant for ethanol. It is also used to produce biodiesel.
The following pie chart shows world consumption of methanol:
Worldwide, formaldehyde production is the largest consumer of methanol, accounting for 31% of world methanol demand in 2013. Demand is driven by the construction industry since formaldehyde is used primarily to produce adhesives for the manufacture of various construction board products. Historically, the major end product has been plywood, but in developed countries, demand is also driven by the expanding use of engineering board products such as OSB (oriented strandboard). These wood composite products require more formaldehyde-based resin per square foot of board than plywood. Demand for formaldehyde is highly dependent on general economic conditions, and, as an example, a slowdown in construction can considerably reduce formaldehyde demand. Overall, global methanol demand for formaldehyde production will grow at an average rate of just over 5% per year from 2013 to 2018; it will remain the single-largest end use in 2018. Although it will remain the largest end use, its share of total world methanol demand will decline to 28% in 2018 as a result of higher growth rates displayed by other end-use segments for methanol.
Consumption of methanol in direct fuel applications is expected to show highly promising growth trends in the next few years. These fuel uses of methanol include MTBE/TAME, biodiesel, gasoline blending and dimethyl ether (DME). Gasoline blending applications for methanol, mostly developed in China for the fuels segment, will increase at an average annual rate of about 12.5% in the next five years, growing from a market share of 11% in 2013 to about 14% in 2018. All the other fuel end uses will also increase in the next five years. This growth will be dependent largely upon the development of new applications as well as general economic growth, since most of these applications (such as fuel cells) go into durable goods uses (such as cars), which are directly linked to general economic conditions. Additionally, growth will depend on the price trends for conventional energy uses; with the considerable increase in (conventional) energy prices (since the trough in early 2009), interest in developing methanol as an alternative fuel has once again increased.
MTBE/TAME accounted for 11% of world methanol demand in 2013. In the United States, domestic consumption of MTBE increased substantially when the Clean Air Act Amendments (CAAA) of 1990 mandated that oxygenated compounds be added to gasoline as one aspect of a program to alleviate air pollution. The major effect of the CAAA was realized in 1995, when RFG (reformulated gasoline) was required in about one-third of U.S. motor fuels. In the United States, MTBE was the primary oxygenated compound for use in RFG. In recent years, MTBE itself has come under attack, primarily because it was found in groundwater as a result of leaking underground gasoline tanks. California—formerly the leading consumer of MTBE—banned the use of MTBE at the end of 2003 and several states followed suit. Methanol consumption for MTBE has been on the decline in the United States since 1999, and since 2006, U.S. production of MTBE has only been for the export markets or for the export-directed gasoline pool. In other regions of the world, especially where lead compounds are currently used to maintain octane levels, some growth for MTBE is still possible. MTBE/TAME is expected to grow at an average annual rate of 3% during 2013–2018, but its global market share will decrease to about 9% of methanol consumption by 2018.
Acetic acid/anhydride accounted for 10% of the world methanol market in 2013 and is expected to maintain the same market share in 2018. A major portion of acetic acid is consumed for the production of vinyl acetate monomer (VAM) and, thus, demand for acetic acid to some extent tracks the demand for VAM. Acetic acid is also used as a solvent for terephthalic acid production. From 2013 to 2018, total global acetic acid demand will grow at 5.7% per year, slower than the growth rate of 6.5% observed in the last five years. In the United States, methanol consumption for acetic acid production will grow only at an average annual rate of 1–1.5% in the next five years; the growth rate in China will be 9.5% during the same period. Globally, methanol consumption for acetic acid production should grow faster (5.7% per year growth) than total acetic acid production (5.4% per year growth) since methanol-based production should grow faster than other (major) production routes.
Methanol-to-olefins and methanol-to-propylene (MTO/MTP) applications are gaining momentum and are expected to grow at an average annual rate of 46.5% during 2013–2018. This usage is driven solely by China and currently accounts for 2% of the total, eventually accounting for 10% of world methanol consumption in 2018.