Methanol is an alternative fuel for internal combustion and other engines, either in combination with gasoline or directly ("neat"). It is used in racing cars in many countries. In the U.S., methanol fuel has received less attention than ethanol fuel as an alternative to petroleum-based fuels. In general, ethanol is less toxic and has higher energy density, although methanol is less expensive to produce sustainably and is a less expensive way to reduce the carbon footprint. However, for optimizing engine performance, fuel availability, toxicity and political advantage, a blend of ethanol, methanol and petroleum is likely to be preferable to using any of these individual substances alone. Methanol may be made from hydrocarbon or renewable resources, in particular natural gas and biomass respectively. It can also be synthesized from CO2 (carbon dioxide) and hydrogen.
Historically, methanol was first produced by destructive distillation (pyrolysis) of wood, resulting in its common English name of wood alcohol.
At present, methanol is usually produced using methane (the chief constituent of natural gas) as a raw material. In China, methanol is made for fuel from coal.
"Biomethanol" may be produced by gasification of organic materials to synthesis gas followed by conventional methanol synthesis. This route can offer methanol production from biomass at efficiencies up to 75%. Widespread production by this route has a proposed potential to offer methanol fuel at a low cost and with benefits to the environment (see Hagen, SABD & Olah references below). These production methods, however, are not suitable for small-scale production.
Recently, methanol fuel has been produced using renewable energy and carbon dioxide as a feedstock. Carbon Recycling International, an Icelandic-American company, completed the first commercial scale renewable methanol plant in 2011.