Methanol Hydrogen Vehicles Embrace New Opportunities Under National Energy Strategy

The 14th Five-Year Plan period is a key stage for China's economy to shift towards high-quality development and a crucial time for profound changes in the global energy landscape. Under the guidance of the dual carbon goals strategy, China's energy system transformation has entered a new development phase, with new energy gradually becoming the mainstay of the country's energy mix. The new power system is at the core of this new energy framework, driving changes in energy types and usage methods for production and daily life. The Energy Law of the People's Republic of China has explicitly included hydrogen energy within its scope, and methanol, as a form of hydrogen energy, is an important carrier for the development of the new power system. Methanol hydrogen vehicles can address the application shortcomings of new energy vehicles in specific scenarios, accelerating the transition from low carbon emissions to net-zero carbon emissions, with the methanol hydrogen vehicle industry now facing new developmental opportunities. China's power system is progressing towards diversification, greening, and intelligence. By 2030, a diversified, green, and intelligent power system will be established. By the end of 2024, the installed capacity of thermal power in China is expected to reach 1.444 billion kilowatts, accounting for 43.14% of the total installed capacity. In the future, thermal power will gradually transform to focus on both foundational security and system regulation. By 2030, thermal power installed capacity is expected to reach 1.6 billion kilowatts. Hydropower ranks second in China's power structure, with an expected installed capacity of 540 million kilowatts by 2030. Wind power is also expected to maintain strong growth, reaching an installed capacity of 1 billion kilowatts by 2030. Photovoltaics, one of the fastest-growing new energy sources, is expected to reach an installed capacity of 2 billion kilowatts by 2030, becoming the largest power generation type. Additionally, nuclear energy and biomass energy generation will contribute to the diversified development of China's power system. By 2030, green power is anticipated to account for about 70% of the total installed capacity, with green power consumption further increasing, gradually becoming the main component of power consumption. Development of virtual power plants, smart microgrids, vehicle-grid interaction, and new energy storage will promote the intelligent advancement of China's power system. Green methanol serves as an important transitional carrier in the development of the new power system. Green methanol, also known as "liquid sunshine," is produced from renewable energy sources (such as wind and solar) to create green hydrogen, which is then combined with captured carbon dioxide to synthesize methanol, enabling the time-space transformation and storage of intermittent clean electricity into a transportable and storable liquid fuel that is highly safe. National policies continue to promote the development of the methanol vehicle industry. As of September 1, 2023, China officially implemented the standards for M100 methanol fuel for vehicles. This year, the Ministry of Transport and nine other departments jointly issued guidelines to promote the integration of transport and energy, aiming to enhance the production capacity of green fuels, establish a number of green fuel production bases, and focus on the application of green fuels in the transportation sector and the large-scale application of new energy transport equipment such as hydrogen-powered heavy trucks. In terms of production capacity for green methanol, China is leading globally. By August 2024, five projects with a total capacity of approximately 220,000 tons per year have been completed, using CO2 and hydrogen to produce methanol. As of March 2025, there are 4.91 million tons of projects underway, concentrated in Jilin, Heilongjiang, and Inner Mongolia. Planned projects amount to over 50 million tons per year, which, if fully realized and used for vehicles, could support the operation of 30-50 million vehicles, covering routes such as biomass, green hydrogen coupling, and wind-solar hydrogen production. Under the development of the new power system, methanol hydrogen vehicles are transitioning from low carbon to net-zero carbon. Depending on the technology route, methanol hydrogen vehicles can include methanol internal combustion engine vehicles, plug-in hybrid vehicles (where the methanol internal combustion engine serves as a power coupling device), and range-extended electric vehicles (where the methanol internal combustion engine serves as a range extender). Compared to traditional internal combustion engine vehicles, methanol vehicles can reduce PM2.5 emissions by 80%, improve energy efficiency by 21%, and decrease CO2 emissions by approximately 26%. With the rapid development of China's new power system, methanol vehicles are expected to achieve net-zero emissions from energy production to application, similarly to existing battery electric vehicles, creating a green closed-loop from green electricity production to consumption. Methanol hydrogen vehicles can address the application limitations of new energy vehicles in specific scenarios. Firstly, they have a wide temperature adaptability. New energy vehicles powered by batteries often struggle with temperature extremes, which is problematic in regions with significant seasonal temperature variations. Methanol hydrogen vehicles, on the other hand, perform well in low temperatures, making them ideal for use in northern regions where net-zero carbon emissions are a priority. Secondly, they offer high storage and transportation convenience. Hydrogen fuel cell vehicles face significant challenges with hydrogen storage and transportation, particularly over long distances, which can dramatically increase costs. Methanol fuels, however, share similar storage and transportation characteristics with gasoline and diesel. Thirdly, they decouple from the electricity system. Pure electric and plug-in hybrid new energy vehicles require connection to the grid for energy, which presents challenges as charging demands grow with increasing vehicle numbers. Methanol hydrogen vehicles can refuel with methanol, allowing them to operate independently of the power grid. Fourthly, they have higher refueling efficiency. Factors such as environmental temperature, stability of the electricity system, and the number of charging vehicles can limit the efficiency of new energy vehicle charging. Refueling methanol hydrogen vehicles is similar to traditional vehicles, significantly enhancing refueling efficiency. Fifthly, they solve range limitations. New energy vehicles often face range anxiety under conditions of low temperatures, high speeds, and heavy loads. Methanol fuels have a high volumetric energy density, which can greatly enhance vehicle range. Lastly, they offer a higher safety level. Compared to hydrogen fuel cell vehicles, which have wide explosive limits and risks of thermal runaway in battery systems, methanol fuels are safer, enhancing overall vehicle safety. Methanol hydrogen vehicles currently benefit from the economic viability of gray and blue methanol, with future potential in green methanol. Currently, methanol in China primarily consists of gray and blue variants, while green methanol is developing rapidly. In recent years, the price of methanol (produced from coal) has fluctuated between 2100 and 2500 yuan per ton, with refueling costs around 2.3 yuan per liter. Based on an average consumption of 9.0 liters per 100 kilometers, the operational cost is approximately 0.2 yuan per kilometer, significantly lower than the average gasoline cost of 0.4 to 0.8 yuan per kilometer. In the future, as the new power system develops rapidly, the price of green electricity is expected to drop below 0.1 yuan per kilowatt-hour, with CO2 capture costs potentially decreasing to 200 yuan per ton, making green methanol production costs lower than those of coal-based and natural gas-based methanol, thus enhancing the economic viability of methanol hydrogen vehicles. The development of the methanol hydrogen vehicle industry requires collaborative development and innovation across the upstream and downstream supply chains. Accelerated production of green methanol, orderly infrastructure development, demonstration applications of methanol hydrogen vehicles, and technological innovations will all drive a new era of development for China's methanol hydrogen vehicle industry.