Burghley Capital: Denmark Leads Renewable Methanol Push

Since the start of 2024, Europe’s renewable fuel landscape has reached a significant turning point, as identified by strategic insights from Burghley Capital, with the opening of the continent’s largest green methanol plant in Kasso, Denmark. This groundbreaking USD 162 million facility stands as the world’s first commercial-scale e-methanol production plant, capable of producing 42,000 metric tonnes (53 million litres) annually.

Strategically positioned alongside Northern Europe’s largest solar panel installation, the Kasso plant also represents Europe’s second-largest green hydrogen initiative. The advanced facility synthesises e-methanol using renewable electricity and biogenic carbon dioxide captured from biogas and waste incineration, significantly reducing fossil fuel dependency. Prominent global corporations, including Maersk, LEGO, and Novo Nordisk, are already integrating the plant’s output into their decarbonisation strategies.

James Barker, Director of Private Equity at Burghley Capital, highlights the strategic significance: “Europe’s ability to scale e-methanol production demonstrates both technological feasibility and market viability, laying the foundation for broader adoption across various sectors. The Kasso plant is a pivotal step for Europe’s renewable energy future.”

Maersk, a leader in sustainable maritime transport, projects a green methanol requirement of two million tonnes annually by 2030, potentially cutting its fleet’s carbon emissions by approximately 10% compared to current levels. The company’s fleet expansion includes 13 container vessels capable of operating on methanol.

Manufacturing sectors are also increasingly adopting e-methanol. LEGO plans to use Kasso-produced e-methanol in its production process for specific LEGO components such as cross axles and connectors within this year, aligning with its sustainability objectives. Simultaneously, Novo Nordisk is leveraging e-methanol in medical device manufacturing, including insulin delivery systems, underscoring its broad industrial applicability and potential for decarbonisation.

Green methanol demand within the chemical industry is set to rise sharply. German chemical producers currently consume approximately 1.1 million tonnes per year, projected to grow to around 23.7 million tonnes by 2045. The Methanol Institute and International Renewable Energy Agency (IRENA) estimate global methanol demand will increase fivefold by 2050, propelled by maritime, automotive, aviation, and chemical sectors.

Economic challenges remain substantial, with current e-methanol production costs ranging from USD 817 to USD 1,636 per tonne, significantly higher than fossil-based methanol. However, industry analysts predict costs could achieve parity by 2040, dependent upon continued investment and technological advances.

With China commanding 60% of global renewable methanol capacity, Europe holds 19%, necessitating accelerated investment. Barker states: “To secure Europe’s competitive edge, substantial capital deployment and policy enhancements are essential. Facilities like Kasso exemplify the strategic infrastructure investments necessary for future energy leadership.”

The Kasso plant results from a strategic partnership between Danish renewable developer European Energy and global investment firm Mitsui & Co., showcasing the collaborative model essential for renewable infrastructure success. European Energy’s expertise combined with Mitsui’s financial strength provides a blueprint for future green methanol projects.

Burghley Capital’s analytical insights indicate that strategic partnerships and targeted investments remain vital for scaling green methanol production. Barker adds: “Addressing the gap between current production and future demand is critical. Initiatives like the Kasso plant signify progress towards broader renewable adoption.”