Chemicals in biofuels: The next decade belongs to multi-use molecules

Renewable methanol is one of the few molecules that sits at the intersection of biofuels and chemicals. It can be produced from biomass and waste, certified under advanced biofuel frameworks, and used as a fuel in its own right or converted into the chemical building blocks that underpin modern manufacturing. That flexibility makes it strategically important. It also means that decisions being made today about how to produce it, who to sell it to, and how to structure the supply base will shape industrial decarbonisation pathways for the next two decades.

The problem is that those decisions are currently being made almost entirely by and for the fuel sector. Marine and aviation mandates are pulling investment into renewable methanol production. Chemical companies, which will ultimately become one of the largest demand pools for the molecule, are largely absent from the conversations that are setting the design template for the supply base they will depend on. That absence has consequences that go beyond procurement strategy. It is a capital allocation issue that will determine whether the infrastructure being built now can serve the full range of demand that arrives through the 2030s, or whether it locks in single-use specifications that the next generation of investment must work around.

The fuels sector is shaping the market

The renewable methanol project pipeline is expected to reach 61 million tonnes of announced capacity by 2031, according to data from GENA Solutions as of April 2026. Realistic delivery sits at 5 to 12 million tonnes by 2030. Of the 281 projects tracked, only around 22% have long-term offtake agreements in place, and the vast majority of those agreements are with marine and aviation buyers responding to regulatory deadlines.

That regulatory pull is real and significant. FuelEU Maritime, in force since January 2025, requires a 6% reduction in fuel greenhouse gas intensity by 2030 rising to 80% by 2050, with substantial non-compliance penalties. ReFuelEU Aviation adds a parallel demand signal through SAF mandates and methanol-to-jet pathways. Eight projects reached final investment decision in 2025 and a further twelve entered FEED. First commercial facilities are already operating, including European Energy's e-methanol plant in Denmark and biomethanol plants in China.

But the 22% offtake figure is not simply a market maturity statistic. It reveals the underlying constraint. Projects are not failing because the technology does not exist. The technology is proven. They are failing because demand certainty is missing and financing structures are not yet fit for purpose. Renewable methanol projects are being presented to capital markets as single end-use assets, scoped against one demand category, with the associated concentration of offtake risk. In the current capital environment, that is a difficult investment case to close.

Chemicals will become one of the largest demand pools

IRENA projects total methanol demand to reach 500 million tonnes globally by 2050, up from around 100 million tonnes today. Methanol-to-olefins already accounts for roughly half of current global methanol consumption, making it the single largest end-use of the molecule, ahead of fuels. Ethylene and propylene, the olefins that MTO produces, are projected to more than double in demand by 2050 even in net-zero scenarios. They underpin packaging, automotive components, textiles, medical devices and most of consumer plastics.

The technical case for using renewable methanol as a chemical feedstock is straightforward. The MTO process operates at lower temperatures than conventional steam cracking, is commercially mature, and is already deployed at scale. Replace coal or natural gas derived methanol with biomethanol or e-methanol and the same downstream conversion produces low-carbon ethylene and propylene without rebuilding chemical plant infrastructure. The decarbonisation route exists. The constraint is upstream: getting enough renewable methanol to scale on terms that make commercial sense for chemical offtakers. It is precisely this challenge that a group of GIC member companies identified and acted on, forming a dedicated spin-off to evaluate the technical and economic potential of MTO technology as a sustainable alternative to conventional fossil-based production, starting with a feasibility study that marks the first step toward low-carbon olefins and e-SAF production in Europe.

Chemical sector demand for renewable methanol is not yet captured in the offtake agreements driving today's investment decisions. Chemical procurement timelines are measured in years and chemical companies are accustomed to waiting for supply to mature before committing. But that logic does not hold when the supply base being built now will determine what is available and at what specification in the 2030s. The chemical sector's absence from today's project development conversations is not a neutral position. It is a decision with long-term infrastructure consequences.

The risk of building the wrong infrastructure

Renewable methanol is rare among industrial molecules in that it can serve marine fuelling, aviation fuel synthesis and chemical feedstock markets from the same production facility, using the same certification frameworks. Methanol specifications for marine, aviation and chemical use sit close to each other on standard grade baselines. The differences are at the margins. Designing in flexibility at FEED stage to serve multiple end-use markets is materially cheaper than retrofitting it after construction. The same logic applies to logistics infrastructure: storage, pipeline connections and barge berths specified for a single end-use are significantly harder to repurpose than those designed with multiple offtake markets in mind.

A multi-use renewable methanol asset that can address marine, aviation and chemical demand from a single facility carries a fundamentally different investment case. It distributes offtake risk across three demand categories, improves bankability, and widens the pool of potential financing structures available to project developers. In a capital environment where offtake certainty is the binding constraint to unlocking investment, diversified offtake is not a nice-to-have. It is what makes projects financeable.

The twelve projects currently in FEED represent the last realistic window to make those design choices cost-effectively. The eight that reached FID in 2025 have already set their specifications. If chemical sector demand is not integrated into FEED-stage decisions now, the supply base being constructed will be optimised for fuel markets and will require costly modification, or parallel new build, to serve chemical offtakers when their demand arrives at scale in the 2030s.

"Chemistry is fundamental to every biofuel we produce today and every pathway we will need tomorrow. The biofuel industry cannot decarbonise transport without a chemical industry that is itself transforming. The Global Impact Coalition brings together the companies that need to solve these challenges collectively and demonstrates that pre-competitive collaboration can deliver real industrial outcomes," said Charlie Tan, CEO, Global Impact Coalition

Why GIC is uniquely placed to act

Most organisations engaged in renewable methanol development sit on one side of the chemicals-fuels divide. Fuel producers and maritime operators understand the offtake structures driving today's FIDs. Chemical companies understand the feedstock requirements that will shape demand in the 2030s. Technology providers understand the conversion economics. Feedstock developers understand the biomass and waste supply chains. Very few organisations have working visibility across all four simultaneously.

The Global Impact Coalition (GIC) is one of them. Incubated at the World Economic Forum and founded and guided by the CEOs of some of the most significant companies in the global chemical industry, including Clariant, Covestro, LG Chem, LyondellBasell, Mitsubishi Chemical Group, Moeve, SABIC, Syensqo and SUEZ, GIC operates pre-competitively across chemicals, feedstocks, technology providers and downstream markets simultaneously. That cross-sectoral visibility is not incidental to its work. It is the reason the organisation can identify integration gaps that sector-specific bodies cannot see.

GIC has developed three projects that together span the renewable methanol value chain. The Biomass-to-Methanol project works with lignocellulosic feedstocks, woody residues and agricultural waste, certified under advanced biofuel frameworks and not in competition with food crops. The Waste-to-Methanol project processes municipal and industrial waste streams that would otherwise go to landfill or incineration. Both meet RED III and ISCC+ certification standards and have been developed to the stage where business cases are defined and technology-to-offtake mapping is in place. A third project on MTO conversion, the downstream step that turns renewable methanol into low-carbon olefins for chemical and fuel applications, has completed its pre-competitive technical phase and graduated to consortium members for commercial development.

Together these projects give GIC visibility across the full chain from biomass and waste feedstocks through to chemical end-products. That is the vantage point from which the infrastructure integration argument becomes not just visible but urgent.

The window is now

Renewable methanol is becoming a strategic industrial platform molecule. It connects biofuel production to chemical manufacturing through the same feedstock routes, the same certification frameworks and increasingly the same production facilities. The infrastructure decisions being made in the next three to five years will determine whether that potential is realised or whether the molecule is locked into fuel-only applications for a generation.

The projects that will define the supply base of the 2030s are being scoped and financed now. The design choices that determine whether they can serve chemical as well as fuel markets are still open in many cases, but that window is closing. Chemical companies that engage in project development now, rather than waiting to procure supply later, will have shaped the infrastructure they depend on. Those that wait will find a supply base built around someone else's requirements.

The projects that attract capital in renewable methanol will not be those with the lowest production cost or the most advanced technology. They will be the projects designed around integrated demand systems rather than siloed end uses. Bridging the chemicals and biofuels sectors around a shared molecule is not a coordination exercise. It is an infrastructure strategy and the time to execute it is before the concrete is poured, not after.