This briefing note is based on the STOA project on Methanol: a future transport fuel based on hydrogen and carbon dioxide? The project discusses the technological, environmental and economic barriers for producing methanol from carbon dioxide, as well as the possible uses of methanol in car transport in Europe. Costs and benefits are evaluated from a life-cycle perspective in order to compare different feedstocks for methanol production and to account for the potential benefits of CO2-derived methanol in the transition to a more diversified fuel mix in the transport sector. Benefits in terms of reduced dependence on conventional fossil fuels and lower risks to security of supply can be envisioned in the medium and long term.
It is nonetheless evident that considerable and sustained research efforts are necessary to turn CO2 into an efficient and competitive prime material, which would be attractive not only for the transport sector, but also other industries. The competitiveness of CO2-derived methanol will largely depend on how effective future policies will be in addressing several critical issues and drivers, namely:
- The level of priority that transport policy assigns to environmental considerations – first of all CO2 abatement – and to security of supply concerns.
- The uncertainty of future technology developments in the transport sector and the need to avoid stranded investments in the medium and long-term.
- The need for bringing down the costs of captured CO2 and stimulating its potential uses, among them methanol production.
- The perspectives of sizeable improvements in the competitiveness of methanol fuel cells within a free market framework.
- The opportunity of promoting a diversified range of solutions for different types of transport fleets taking into account the high likelihood of competition for fuels between all transport sectors.
Four policy options are outlined hereafter, reflecting as many different approaches to balancing free market rules with the ambition to support and promote the development of a CO2-derived methanol sector. Read the complete executive summary here.
The table below summarizes the main pros and cons of the four policy options:
