OCI Global eyes increase in green methanol production capacity in U.S.

Business Developments & Projects

September 14, 2023, by Aida Čučuk

Dutch producer and distributor of hydrogen-based products OCI Global has revealed plans to double its green methanol production capacity to approximately 400,000 metric tons per year in response to the growing demand for green methanol from numerous high-emissions industries, including shipping.

According to OCI, green methanol can effectively decarbonize traditionally hard-to-abate sectors by significantly reducing the carbon footprint and emissions across a range of key value chains to power cleaner industries.

The company said the scale-up plans include entering into supply agreements for renewable natural gas (RNG) exceeding 15,000 mmbtu per day as well as securing the waste and development rights from the City of Beaumont, Texas, U.S. To note, OCI said this is its first upstream RNG production facility and production is slated to start in Q1 2025.

OCI currently has the capacity to produce up to 200 thousand metric tons of green methanol, and off-takers include the road fuels market, where it is used as a fuel-blend to reduce emissions from petrol, as a building block in a range of industrial applications and most recently, as a fuel for shipping.

Ahmed El-Hoshy, CEO of OCI Global, stated that this latest announcement represents a milestone in the company’s decarbonization journey as a business and its commitment to driving the energy transition, adding: “We are seeing encouraging signs with regulatory support for both ammonia and methanol in shipping, such as the EU’s FuelEU maritime regulation and the latest IMO strategy bolstering the value of low carbon and green methanol and ammonia relative to fossil fuels.”

“It is clear that both fuels will need to play an integral role in reaching the IMO’s revised targets, and OCI Global stands ready to supply them. However, these targets must be supported by practical mechanisms to continue to maintain momentum towards meeting global greenhouse gas emissions reduction targets.”

Bashir Lebada, CEO of OCI Methanol/HyFuels said: “We continue to see more and more realization that methanol is the transportation sector’s most viable solution and the easiest way to transport and use renewable hydrogen today. It is a solution that is available now and our focus is on continuing to scale technologies, whether through our projects or our supply partners, to ensure that our capacities continue to grow alongside demand.”

“We are seeing increasing pull from road fuel markets due to the delay in EV adoption and charging station build-out, and while marine demand has been growing at a very fast pace, we have yet to see the impact of retrofits which should end up being a larger segment than new-builds. E-methanol will also be a new product for us, and with the RFNBO mandates in the coming years, will quickly become the blendstock of choice with gasoline to ensure compliance. We are also very excited to announce the expansion of our 13-year partnership with the City of Beaumont; this landfill will bolster our product portfolio with additional green fuels right in our backyard and add to our existing supply portfolio of RNG.”

Roy West, Mayor of Beaumont, commented as well: “This joint project will create societal and environmental benefits, including the reduction of greenhouse gas emissions and reduction in other air emissions resulting from landfill operations. This agreement is considered a win-win agreement for the city and OCI as it allows the city to generate an additional revenue stream from its landfill operations while OCI will be able to use the renewable natural gas for its business.”

To remind, this summer, the first ever green methanol container vessel, owned by A.P. Moller-Maersk, was fueled with OCI HyFuels green methanol on its maiden voyage from Korea to Copenhagen. Additionally, OCI Global announced a new agreement with Xpress Feeders to supply green methanol for new-build feeder ships.