As natural gas prices have fallen globally relative to crude oil, we are seeing increased supply and demand for methanol. Many countries around the world have begun to reassess their energy policies and the role which alternative fuels like methanol can play in the transportation fuel mix. As methanol fuel blending research, pilot programs on methanol-fueled vehicles, and other initiatives have taken root around the world, governments have proactively been developing public policies and related legislation to support methanol developments in their markets. Nowhere is this more evident than in the APMECA (Asia Pacific, Middle East, and Central Asian) region. Critical toward these policy developments are the need for greater energy security to hedge against international political and economic risk, the desire to give consumers more affordable, high performance fuel pricing options, and the interest in environmental protection and preservation.
China, the world’s largest producer and consumer of methanol, is a global leader in methanol fuel, with numerous provinces developing methanol fuel standards ranging from M5 (5% methanol, 95% gasoline) to M100. Similar standards initiatives are underway on the national level, where China has adopted M85 and M100 standards and is currently evaluating a potential M15 national fuel standard. In February 2012, China’s Ministry of Industry and Information Technology (MIIT) announced the creation of two-year pilot program in Shanxi and Shaanxi Provinces and in Shanghai, aimed at development of M85-fuelled vehicles. Australia is another leading Asia Pacific market in which industry players have been testing GEM (gasoline-ethanol-methanol) fuel blends in recent years. On-going tests of A15 fuel (12% methanol, 3% ethanol, 85% gasoline) in cars that have not been modified have been successfully running since 2012.
In the Middle East, Israel’s discovery of large offshore natural gas deposits and similar interests as China on energy security, fuel pricing, and environmental protection have positioned the country as another key market for methanol fuel blending. In 2013, Israel completed successful M15 vehicle pilot program tests and the Israeli government has launched similar research on M70 fuel and vehicles. Other governments in the Middle East and GCC (Gulf Cooperation Council) have similarly begun looking at fuel blending programs in their markets in the coming years.
In the Russian Federation and Central Asia, significant research and testing has been done in Uzbekistan on M3 and M5 fuel blends and vehicles. Several countries in the region, which is extremely rich in natural gas deposits, are looking at how best to monetize these assets through development of methanol and related derivative products. Their governments are also assessing the best ways to mitigate high fuel prices coupled with environmental pollution caused by traditional fuel sources. In addition to the Russian Federation which has substantial methanol production, Azerbaijan started Central Asia’s first methanol production in 2013. Azerbaijan, Tajikistan, Turkmenistan, and other Central Asian Republics are more closely examining the potential for methanol in fuel blending.