KUWAIT CITY, Aug 19: The Secretary General of the Arab Energy Organization (AEO), formerly OAPEC, Jamal Al-Loughani, has underlined the role of low-carbon methanol as a sustainable solution to reduce emissions and advance climate neutrality, particularly in hard-to-abate sectors such as transport and heavy industry.

Al-Loughani spoke to the Kuwait News Agency (KUNA) on Tuesday following the release of a new AEO study, “Low-Carbon Methanol and its Role in the Energy Transition.” He said the report comes at a crucial time as global energy systems undergo rapid transformations toward clean and sustainable sources.

The study details production methods that rely on green hydrogen, generated through renewable-powered electrolysis, and captured carbon dioxide from industrial or biological sources. It estimates that global investment in low-carbon methanol projects has surpassed USD 10 billion as of mid-2025 and is expected to double by 2030, with the market projected to exceed 20 million tons annually by 2035. Growth is projected to be driven by rising demand in transport, fuel, chemical, and petrochemical sectors.

Al-Loughani noted that the maritime industry has already begun adopting methanol as an alternative fuel, with more than 200 methanol-powered vessels on order worldwide since 2023. Although production costs remain higher than fossil methanol — between USD 400–900 per ton compared with USD 150–250 — he said the gap is narrowing due to government incentives, technological advances, and stronger carbon pricing mechanisms.

He emphasized that Arab states are well-positioned to develop this industry, given their abundant natural resources, renewable energy potential, robust infrastructure, and strategic location within global supply chains. Some member states, he added, have already adopted policies and initiatives to support the development of low-carbon fuels, boosting their regional and international standing.

The study concludes that low-carbon methanol represents a strategic option that combines environmental efficiency, technical flexibility, and economic viability, making it a cornerstone in the transition toward a sustainable, low-emission energy economy.